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Stocks skittish after hitting new highs
By: cnn.comPosted On: 09/17/2009 4:30 P
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Stocks slipped Thursday afternoon, with the major indexes ducking down after touching fresh one-year highs in the late morning, following encouraging reports on housing, jobs and manufacturing.
Stocks slipped Thursday afternoon, with the major indexes ducking down after touching fresh one-year highs in the late morning, following encouraging reports on housing, jobs and manufacturing.
The Dow Jones industrial average (INDU) lost 40 points, or 0.4%, with around 2-1/2 hours left in the session. The blue-chip average ended the previous session at its highest point since Oct. 6, 2008.
The S&P 500 (SPX) index fell about 7 points, or 0.7%, after ending the previous session at its highest point since Oct. 3 of last year. The Nasdaq composite (COMP) lost 14 points or 0.7% after closing at its highest point since Sept. 26, 2008.
The three major indexes have ended higher in 8 of the last 9 sessions.
U.S. stocks surged to almost one-year highs Wednesday on continued optimism about the economy. Thursday brought new reports supporting hopes that a recovery is underway, but the response from investors was more muted as worries persist that the stock rally has outpaced the recovery.
By afternoon, investors were ditching some of the biggest gainers from the last few weeks, including financials, commodities and big industrial names. Big Dow losers included Alcoa (AA, Fortune 500), General Electric (GE, Fortune 500), McDonald's (MCD, Fortune 500) and 3M (MMM, Fortune 500).
Stocks have surged over the last six months as investors have welcomed a rash of improving economic news and an unprecedented amount of fiscal and monetary stimulus. Since bottoming at a 12-year low in March, the Dow industrials have gained just shy of 50% and the S&P 500 has gained 58%, as of Wednesday's close. Since bottoming at a six-year low, the Nasdaq has gained 68%.
Trading could be volatile and volume could be higher than usual ahead of the quarterly options expiration Friday. On Friday, stock index futures and options, and individual stock futures and options all expire at the same time.
Economy: The number of Americans filing new claims for unemployment fell last week to 545,000 from a revised 557,000 in the previous week, the Labor Department reported Thursday morning. Economists surveyed by Briefing.com forecast that claims would rise modestly.
Continuing claims, a measure of Americans who have been filing claims for unemployment for a week or more, rose to 6.23 million versus forecasts for a rise to 6.1 million.
A rise in apartment construction helped push August housing starts to the highest point in roughly nine months, the Commerce Department reported Thursday morning.
Starts rose 1.5% to an annual unit rate of 598,000 from a revised 589,000 in July, the government said. That was in line with economists' forecasts.
Building permits, a measure of builder confidence, rose 2.7% to 579,000 from a revised 564,000 in July.
The Philadelphia Fed index rose to a 27-month high in September, adding to other evidence that the manufacturing sector is recovering. The index, a regional read on manufacturing, rose to 14.1 in September from 4.2 previously. Economists thought it would rise to 8.0, on average.
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