Stocks Fall Again on Missed Forecasts
U.S. stocks fell last week, giving the Standard & Poor's 500-stock index its first two-week decline since July, after gauges of manufacturing and jobless claims missed forecasts, spurring concern that the economy is struggling to recover.
General Electric and J.P. Morgan Chase declined on speculation that the market's seven-month rally outpaced prospects for an earnings rebound. U.S. Steel and Chevron led industrial and energy companies lower after the International Monetary Fund predicted growth next year will be restrained amid U.S. unemployment that has climbed to 9.8 percent, the highest in 26 years, and the waning effects of President Obama's $787 billion stimulus program.
The S&P 500 declined 1.8 percent to 1025.21 this week. The Dow Jones Industrial Average fell 177.52 points, or 1.8 percent, to 9487.67. The Nasdaq Composite Index retreated 2.1 percent to 2048.11.
"It's going to be a slow economic recovery," said John Carey, a Boston-based money manager at Pioneer Investments.
"People are now focusing more on fundamentals and getting concerned that share prices may have gotten ahead of themselves in the near-term."
The U.S. equity benchmark has risen 52 percent from a 12-year low in March, sending its price-to-earnings ratio last month to the highest levels since 2004. The measure is valued at about 19 times its companies' reported operating profit.
The yield on the benchmark 10-year Treasury note dropped 10 basis points to 3.22 percent and touched the lowest level since May.
The Treasury will auction $30 billion of three-month bills and $30 billion of six-month bills on Monday. They yielded 0.05 percent and 0.14 percent, respectively, in when-issued trading. The Treasury will sell one-month bills the next day.
-- Bloomberg News