Tuesday September 25, 11:09 am ET
By Joe Bel Bruno, AP Business Writer
Stocks Mixed As Investors Weigh Future Rate Cuts Amid Consumer, Housing
Worries
NEW YORK (AP) -- Wall Street was mixed Tuesday as investors got fresh
evidence that consumer spending is slowing amid the worst housing slump
in more than a decade.
Traders were hit by a series of negative reports from companies that are
considered barometers for the economy.
The retailers Target Corp. and Lowe's Cos. trimmed their expectations
for the year because of slowing sales, while homebuilder Lennar Corp.
posted a fiscal third-quarter loss and sharply lower revenues.
A pair of economic reports that indicated that consumer spending and
home sales continue to weaken compounded jitters. The Conference Board
said its Consumer Confidence Index for September fell to its lowest
level in almost two years. The National Association of Realtors reported
sales of existing homes fell for a sixth straight month in August to the
lowest point in five years.
These reports take on even more significance as Wall Street speculates
about what the Federal Reserve's next move will be after last week's
half-point interest rate cut. Data that show the economy is continuing
to slow could bolster the case for further cuts.
In late morning trading, the Dow Jones industrial average rose 8.70 or
0.06 percent, to 13,767.76. The blue-chip index clawed back from a more
than 60 point decline after the opening.
Broader stock indicators were mixed. The Standard & Poor's 500 dropped
2.76, or 0.18 percent, to 1,514.97, while the Nasdaq composite edged up
3.65, or 0.14 percent, 2,671.60.
Bonds prices rose, with the yield on the benchmark 10-year note falling
to 4.58 percent from 4.62 percent late Monday. The dollar was lower
against most major currencies, while gold edged lower.
Oil prices continued to slide, with a barrel of light sweet crude down
$1.70 to $79.25 on the New York Mercantile Exchange. Crude typically can
fall on reports about lower consumer spending.
Lennar shares fell 83 cents, or 3.4 percent, to $23.35 after it posted a
loss of $513.9 million, or $3.25 per share, for the third quarter as
revenue fell 44 percent.
Target and Lowe's cut their sales forecasts for the year because of
uncertainty about the upcoming holiday shopping season. The warnings
came after the closing bell on Monday.
Target fell $2.28, or 3.5 percent, to $62.02. Lowe's declined $1.57, or
5.1 percent, to $29.98.
The Russell 2000 index of smaller companies fell 4.64, or 0.58 percent,
to 801.16.
In European trading, Britain's FTSE 100 fell 1.01 percent, Germany's DAX
index fell 0.73 percent, and France's CAC-40 fell 1.06 percent.
In Asia earlier, Japan's Nikkei index rose 0.55 percent and Hong Kong's
Hang Seng Index fell 0.46 percent.
