Stocks still mired in a losing streak

Sunday, August 29, 2010

U.S. stocks fell for a third straight week, sending the Standard & Poor's 500-stock index to its longest losing weekly streak since February, as a record decline in home sales raised concerns that the economy may fall back into recession.

Shares of Cisco Systems, Caterpillar and Boeing retreated at least 2.2 percent. Hewlett-Packard's slid 4.6 percent as the computer maker intensified its bidding war with Dell for data storage from 3Par.

The S&P 500 ended the week down 0.7 percent at 1064.59 after slumping 1.5 percent Tuesday and rising 1.7 percent Friday. The Dow Jones industrial average dropped 62.97 points, or 0.6 percent, to 10,150.65.

The S&P 500 pared some of its losses Friday, as investors were encouraged by better-than-forecast growth in the U.S. economy and as Federal Reserve Chairman Ben S. Bernanke said the central bank is ready to provide more stimulus if needed.

"Investing in stocks is like being on a tightrope right now," said Michael Mullaney, who manages $9 billion at Fiduciary Trust. "Bernanke's comments were positive. If he'd said anything less than that, it would be surprising."

The S&P 500 has tumbled 13 percent from its high for the year in April amid concern the economic recovery is in jeopardy. The benchmark index fell to a seven-week low Tuesday as the National Association of Realtors said purchases of previously owned homes plummeted a record 27 percent.

The Treasury will sell $30 billion in three-month and $30 billion in six-month bills Monday. They yielded 0.155 percent and 0.193 percent, respectively, in when-issued trading. The United States will also sell four-week bills the following day. The amount will be announced Monday.

-- Bloomberg News


© 2010 The Washington Post Company