No Quick Rebound as Stocks Drop Again
Thursday, May 18, 2006; 5:36 PM
The stock market tried to rebound today, but instead it bounced lower after traders gave up hope for a quick recovery from yesterday's big loss.
The Dow Jones industrial average and the Standard & Poor's 500 stock index lurked near the break-even mark for much of the day and then sank in the final 90 minutes of trading.
By the closing bell, the Dow, which had its worst loss of the year yesterday, was down another 77 points to 11,128.29 and the S&P was off nearly 9 points to 1,261.81.
The Nasdaq Stock Market composite index fell more than 15 points to 2,180.32.
On a percentage basis, the indexes moved in virtual lockstep -- slipping about 0.7 percent, but the Nasdaq's losses were the most painful.
Today was the eighth day in a row that the Nasdaq index has fallen -- its worst losing streak since 1994, according to Bloomberg data.
The losses once again were blamed on concerns about how much higher interest rates will be pushed by the Federal Reserve.
But today's economic data should have relieved those fears.
The index of leading economic indicators -- which is supposed to predict the course of the economy during the next few months -- fell in April. And new claims for unemployment benefits jumped dramatically this week, up 42,000 to 367,000, the highest since last October.
Both indicate a slowing economy, which ought to reduce the need for the Fed to raise rates.
A week or two ago, rising jobless claims and falling leading indicators would likely have pushed stocks higher. But the mood of Wall Street has changed and the data did nothing to help the market today.