March got off to a bad start on Wall Street today as the first reports on February economic activity confirmed fears that business is weakening.
Auto sales fell for the second month in a row as the juggernaut fueled by generous incentives continued to lose momentum.
General Motors Corp. reported a 19 percent decrease in sales, Daimler Chrysler AG posted a 4.5 percent decline and Ford Motor Co. said it's sales held firm--but only because of increased incentives.
Shares of all three big automakers slipped, but more importantly their slowing sales were seen as an early warning of what's to come as economic data from February flows in during the next few days. Also looming is the showdown with Saddam Hussein and its unpredictable impact on energy prices, which are themselves holding back the economy.
Facing such gloomy forecasts, early gains in the market quickly faded and stocks once again retreated.
The Dow Jones industrial average fell 54 points to 7,837.23. The Standard & Poor's 500 stock index lost more than 6 points to close at 834.74.
The Nasdaq Stock Market composite index suffered larger losses, falling 17 points to 1,320.30 as investors took profits in some of the technology stocks that have had strong gains so far this year.
The next key measure of February business conditions will come later this week when the big retail chains report their results for the month. Expectations are not high, because the horrid East Coast winter weather kept shoppers away from the malls. Neither selling out of snow shovels nor the run on duct tape and plastic sheeting are likely to make up for the business lost to snow days.
Manufacturing industries also slowed down last month, according to the Institute for Supply Management's factory index. That index fell from 53.9 in January to 50.5 in February, its lowest in three months. The index indicates factories are expanding their output when the number is above 50, so this reading indicates business is barely growing at all.
In a look back at January, the Commerce department reported that personal incomes rose by 0.3 percent, their sixth monthly gain in a row, but personal spending fell 0.1 percent, ending three months of gains.