Stocks resumed their slide today after new reports showed that the economy's surging growth has not slowed in recent months. The data renewed concerns that the Federal Reserve will raise interest rates next week.
The Dow Jones industrial average fell 63.95 points to close at 10,273.00, after falling nearly 153 points earlier in the session. The blue-chip index ended a fairly volatile week just 6.33 points below last Friday's close.
Broader stock indicators were mostly lower. The Standard & Poor's 500-stock index edged up 0.10, to 1282.81, and the Nasdaq composite index fell 9.31, to 2736.85.
Stocks fell after the Commerce Department reported that personal income rose 0.5 percent in August, the eighth straight monthly increase.
At the same time, consumer spending rose 0.9 percent and the personal savings rate matched a record low of minus 1.5 percent. While robust consumer spending has powered the growth of the U.S. economy, many economists fear that if spending continues unchecked, inflation will begin escalating.
The market's decline accelerated after the National Association of Purchasing Management reported the nation's manufacturing sector grew at a stronger-than-expected rate in September. The NAPM also said the prices of raw materials spurted to the highest level since May 1995.
"First, the personal income and consumer spending report knocked the market down," said Alfred E. Goldman, director of market analysis at A.G. Edwards & Sons Inc. in St. Louis. "Then the NAPM really was the bullet. The market really didn't like the rise in prices paid."
The inflation-sensitive bond market responded immediately to the signs of continued economic growth. The price of the 30-year Treasury bond slumped $11.56 per $1,000 in face value, pushing its yield down to 6.13 percent, from 6.04 percent late Thursday.
"Bonds had a very bad day, and were certainly a trigger for the weakness in stocks," said Ricky Harrington, technical analyst at Wachovia Securities in Charlotte. "Overall, there's still a lot of risk in this market."
Harrington also cited weakness in the dollar, which slipped in late New York trading to 104.65 Japanese yen, from 106.46 late Thursday.
Hewlett Packard fell 3 3/8, to 87 3/8 today. The computer maker warned that its fiscal fourth-quarter revenue could fall short of Wall Street expectations because of component shortages caused by last week's earthquake in Taiwan.
IBM fell 3 1/4, to 117 3/4.
Revlon shares slumped 6 1/4, to 12, after the cosmetics maker said it expected a loss in the third quarter. Revlon has not been able to find a buyer, so it now is looking to sell its salon-based business and some Latin American brands.
Eli Lilly rose 4 3/8, to 68-9/16. The Food and Drug Administration granted the company permission to sell an estrogen substitute used to prevent brittle bones in women who are past menopause as a treatment for osteoporosis.
And Merck rose 3-5/16, to 68 1/8, after it presented strong results from tests of its Fosamax drug, used to treat male osteoporosis.