Drop in factory orders unnerves investors

Yahoo News ^ | 6-23-06 | MICHAEL J. MARTINEZ

[Hydroshock]

NEW YORK - Stocks dropped in early trading Friday after a report showed the first back-to-back decline in big ticket factory goods in two years, a surprising sign that the economy is modereating at a faster pace than many expected.

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Durable goods orders dropped 0.3 percent in May after a sharp 4.7 percent drop the month before. Economists expected orders to rise 0.4 percent. That raised concerns on Wall Street that the Federal Reserve's interest rate hikes, while fighting inflation, could slow the economy more than needed.

With the Fed meeting Wednesday and Thursday — and widely expected to hike rates yet again — Wall Street's chronic nervousness about economic growth grew stronger despite a fresh drop in crude oil prices.

In the first hour of trading, the Dow Jones industrial average fell 42.51, or 0.39 percent, to 10,976.60.

Broader stock indicators also fell. The Standard & Poor's 500 index lost 4.04, or 0.32 percent, to 1,241.56, and the Nasdaq composite index dropped 11.01, or 0.52 percent, to 2,111.97.

Bonds continued their selloff from the previous session, with the yield on the benchmark 10-year Treasury note rising to 5.21 percent from Thursday's four-year high of 5.20 percent. The dollar rose against most major currencies, while gold prices fell.

Oil prices edged lower, but remained above $70 per barrel as traders remained concerned about rising international demand, tight refinery capacity and continued unrest in the Middle East. A barrel of light crude was quoted at $70.45, down 39 cents, on the New York Mercantile Exchange.

In corporate news, software maker Oracle Corp. saw its quarterly earnings jump 27 percent, beating Wall Street's forecasts by a penny per share after one-time charges for acquisition expenses. Revenues surged 25 percent for the quarter, and the company's forecast for the current quarter met analysts' projections. Oracle rose 38 cents to $14.71.

Anadarko Petroleum Corp. dropped $2.47, or 5.1 percent, to $45.92 after the company said it would acquire two rivals, Kerr-McGee Corp. and Western Gas Resources Inc., for a total of $2.1 billion. Kerr-McGee soared $18.20, or 36 percent, to $68.50 on the news, while Western Gas surged $18.65, or 46 percent, to $59.56.

Amusement park operator Six Flags Inc. plunged as the company said it may have problems meeting its credit obligations and was looking to sell six of its properties. Six Flags fell a precipitous 21 percent, or $1.53, to $5.92.

The Russell 2000 index of smaller companies fell 3.18, or 0.46 percent, to 684.86.

Overseas, Japan's Nikkei stock average slipped 0.08 percent. In afternoon trading, Britain's FTSE 100 was down 0.18 percent, Germany's DAX index fell 0.39 percent, and France's CAC-40 dropped 0.12 percent.

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[Perdogg]

The dow is off 10 points!!!!!!! HELP THE SKY IS FALLING!!!!!

[traderrob6]

It's up 20 now. This may be easing inflation concerns.

[ex-Texan]

Both the DOW and NASDAQ are fighting to get back up to where they were a few months ago. The truth is that in just the last 30 days over $ 2 trillion was lost globally in equity markets. That money is lost forever.

True Picture Posted Here

[reformedliberal]

So none of the *lost* equities were sold for a profit? There are no buyers in the market any longer?

The markets go up and down. I remember when the Dow broke 1000. I have been in the market since the year after that and in the past 33 years have lost in every *crash* and gained in every rebound. I do not hold the same equities or have the same allocation I did then. My net worth is up perhaps a net 35% and it is my fault it isn't higher as I have a conservative buy and hold diversified strategy, plus I have spent money on many useful and enjoyable things and pursuits. However, enough assets are in secure investments that normal gyrations aren't a threat.

As for the global markets, some were manipulated, some were overbought, some were exuberantly valued.

We will all survive.