U.S. Stocks Slide After Four-Week Rally
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Monday, August 10, 2009; 5:15 PM
U.S. stock markets dipped Monday amid light trading as investors locked in profits following a four-week rally.
The blue-chip Dow Jones industrial average declined 0.3 percent, or 32.12 points, to 933.95, while the broader Standard & Poor's 500-stock index fell 0.3 percent, or 3.38 points, to 1007.10. The tech-heavy Nasdaq dropped 0.4 percent, or 8.01 points, to 1992.24.
Justin Golden, a strategist at Macro Risk Advisors, said the day's declines were minimal, especially considering the low trading volume and lack of major news.
"It seemed kind of like a vacation today," he said.
Last week, the Dow and the S&P reached record highs for the year following news that the unemployment rate fell slightly in July, surprising many analysts. Investors reaped the benefits Monday, with commodity-producing companies falling the most, down 1.9 percent. Healthcare was the one of the few sectors to escape the day's broad declines, rising 0.3 percent.
This week investors are looking forward to the meeting of the Federal Reserve's policy-making committee Tuesday and Wednesday. The central bank is expected to leave its target for short-term interest rates unchanged at nearly zero.
Investors are also slated to get a better picture of consumer health this week as the Commerce Department reports monthly retail sales on Thursday and several retailers -- notably Wal-Mart and Macy's -- report quarterly earnings.
Golden said he was wary of the recent rally, especially considering Monday's rise in the Chicago Board Options Exchange Volatility Index, which shows the market's expectation for fluctuations over 30 days.
"People are not 100 percent confident with the market at these levels," Golden said. "They're concerned about some movement in the short term."
In London, the FTSE 100 slipped 0.2 percent, or 9.36 points, to 4722.20. Asian markets rallied, with Japan's Nikkei 225 rising 1.1 percent, or 112.17 points, to 10524.26. Hong Kong's Hang Seng index jumped 2.7 percent, or 554.15 points, to 20929.52.
Meanwhile, Oil prices fell below $71 a barrel. benchmark crude for September delivery fell 33 cents to settle at $70.60 a barrel on the New York Mercantile Exchange.
Staff writer Neil Irwin contributed to this report.
