Stocks Steady as Investors Brush Off Disappointing Economic Data, Auto Sales
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Tuesday, November 4, 2008
Stocks were flat yesterday in a subdued day of trading that broke with the recent weeks of volatility, as investors shrugged off gloomy economic data and turmoil in the auto sector.
Stocks fluctuated between positive and negative territory most of the day, trading in a narrow range that contrasted with the wild swings of October, when the Dow Jones industrial average moved hundreds of points an hour. Traders had expected the poor economic news yesterday, and were restrained as they waited for the results of the presidential election today and critical economic data later this week, including unemployment figures on Friday.
All the major indicators moved less than 1 percent. The Dow was down 0.06 percent, or 5.18 points, to close at 9319.83, and traded within an 155-point range, the smallest in two months. The Standard & Poor's 500-stock index fell 0.25 percent, or 2.45, to 966.30, while the Nasdaq closed up 0.31 percent, or 5.38 , at 1726.33.
The auto sector had another dismal month in October, as the financial crisis curbed consumer spending and the industry sought federal assistance. Shares of Ford fell 2.7 percent, to $2.13 a share, after it reported a 29 percent drop in sales, while Toyota stock was flat after the company reported a 23 percent plunge in sales.
General Motors was down 2.4 percent, to $5.65, after reporting that it delivered 45 percent fewer cars in October than in October 2007. Truck sales were down 51 percent, to 97,119.
Investors also digested more poor economic data. Construction spending fell 0.3 percent in September, led by a 1.3 percent drop in home construction, according to the Commerce Department. The downturn in manufacturing activity accelerated in October, falling to 38.9 -- the lowest level since September 1982, according to the Institute for Supply Management.
Manufacturing activity has plunged into "the recession zone," Nigel Gault, chief U.S. economist for IHS Global Insight, said in a research note.
The telecom sector got a boost, with AT&T and Verizon Communications posting the biggest gains in the Dow. They are viewed by investors as the most stable telecom firms, and a Wachovia research report yesterday called them a "safe haven," helping send Verizon up 3.64 percent, to $30.75. AT&T climbed 3.9 percent, to $27.81.
Crude oil fell 5.75 percent, or $3.90, to settle at $63.91 a barrel.
