Posted on 11/09/2006 12:50:44 PM PST by pwatson
AP Stocks Decline in Late Afternoon Trading Thursday November 9, 3:46 pm ET By Joe Bel Bruno, AP Business Writer Dow, Nasdaq Stumble in Late Afternoon Trading As Investors Worry About Policy Shifts in D.C.
NEW YORK (AP) -- Wall Street turned lower Thursday as investors cashed in profits amid disappointing consumer sentiment data, rising oil prices and new worries about policy shifts in Washington. The lackluster session was to be expected after three days of gains, including a new closing high Wednesday for the Dow Jones industrials. Investors had driven stocks broadly higher this week on optimism that Democrats taking control of Congress would cause political gridlock that would be favorable to businesses.
But after some time to mull over the election results, investors are starting to become concerned about an "anti-business stance" among Democrats in Washington, said John O'Donoghue, co-head of equities at Cowen & Co.
"The market's been looking for a reason to go to the downside, and a change in Washington is as good an excuse as any," O'Donoghue said.
Investors also sifted through new economic data Thursday. U.S. consumers' confidence weakened slightly in early November but stayed near a 15-month high, according to the University of Michigan.
That data overshadowed good news from the Commerce Department that America's trade deficit showed a sharp improvement in September, and a report from the Labor Department that said the number of newly laid off workers had a bigger than expected drop last week.
In late afternoon trading, the Dow fell 86.20, or 0.71 percent, to 12,090.34. The Dow reached a new closing high of 12,176.54 on Wednesday.
Broader stock indicators were mixed. The Standard & Poor's 500 index fell 8.23, or 0.59 percent, to 1,377.49, while the Nasdaq composite index fell 13.28, or 0.56 percent, to 2,371.66. The technology-laden Nasdaq was higher earlier in the day on strong earnings results from Cisco Systems Inc.
Bonds were flat, with the yield on the benchmark 10-year Treasury note at 4.64 percent. The dollar was mostly higher against other major currencies, while gold prices rose.
Crude prices extended their gains after the U.S. government reported gasoline inventories fell last week. A barrel of light sweet crude soared $1.33 to $61.16.
Going forward, investors will be relying on developments in Washington and clues to the country's economic health now that third-quarter earnings reports are largely in.
"The market's going to be on guard for any signs that the soft landing is going to be harder than people are anticipating," said John Caldwell, chief investment strategist for McDonald Financial Group, part of Cleveland-based KeyCorp.
Stocks have been on a tear in recent months, but last week, they cooled on worries that corporate profits may not hold up in a slowing economy. Prior to Monday's 119-point gain in the Dow, the market's best-known index closed lower for six straight sessions for the first time since June 2005.
In addition to economic reports and energy prices,investors will be watching merger and acquisitions activity, and any sign that corporate earnings might be pulling back.
"As we go into next year, one of our concerns -- and it's something we worried about this year, but it didn't come to fruition -- that earnings growth is going to slow at some point," Caldwell added. "It's simple math ... You can't maintain double-digit earnings growth forever."
Still, he noted, many catalysts that helped buoy the market this year, notably strong M&A activity, are still in place.
Cisco surged $1.72, or 6.9 percent, to $26.82. The world's biggest networking equipment maker said its acquisition of Scientific-Atlanta Inc. pushed profit up 28 percent. UBS also upgraded the stock on the results, and predicted strong future growth.
Hewlett-Packard Co. also helped drive technology stocks after Goldman Sachs lifted the computer and printer maker's 12-month price target to $46 from $42.50. Shares rose 64 cents, or 2.6 percent, to $25.20.
Merck & Co. fell $1.37, or 3.1 percent, to $42.97, after the pharmaceutical company said liabilities from four tax disputes in the U.S. and Canada could total $5.58 billion. The drug maker faces tens of thousands of lawsuits over its withdrawn painkiller Vioxx.
J.C. Penney Corp. posted profit that surpassed Wall Street projections, and raised its full-year financial forecast. Shares of the retailer rose $1.23, or 1.6 percent, to $79.43.
Viacom Inc. fell after the entertainment conglomerate reported a 16 percent slide in profit for the third quarter. The company also announced Chief Financial Officer Michael J. Dolan will step down at the end of the year. Shares fell $1.22, or 3.1 percent, to $38.45.
Declining issues outnumbered advancers on the New York Stock Exchange, where volume came to 1.369 billion shares.
The Russell 2000 index of smaller companies fell 10.72, or 1.39 percent, to 759.12.
Overseas, Japan's Nikkei stock average closed lower by 0.11 percent. In late trading, Britain's FTSE 100 closed down -0.12 percent, Germany's DAX index closed up 0.15 percent, and France's CAC-40 closed up 0.21 percent.
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
They said the decline was to be expected due to the increases for a few days, no such explanation for earlier shifts though. The Democrat-loving media will have a good spin on news from now on.
I am sure the MSM will be blaming the democrats for this - any day now...
Remember DJIA 12,000? Did somebody do a screensave so the grandkids will believe the story?
That's a great point. The media talked up everything when the Great Gatswannabe was in power.
Meanwhile, in Phoenix. The illegal aliens are "protesting," as we speak, outside McCain's office demanding McCain do something about the proposition passed in Tuesday's elections stating that Arizonans will no longer foot the bill for illegal aliens to get a college diploma. I love this country!
Pelosi's fault.
I sold off my united healthcare stock a couple days before the election. I knew that HMO's and pharma were going to be the first companies the hezbocrats try to sink their fangs into.
My big bets for this holiday season are Coach and Apple.
Coach handbags and wallets are like crack coccaine for women with credit cards.
Wall Street would not have minded a split Congress because gridlock means less money gets spent.
But the Democrats having both houses is going to mean socialism, higher taxes on corporations and tax increases which have proven through the years to have the opposite effect of what one would expect -- tax revenues actually go down.
What did that take, about 48 hours?
no, they will be blaming Bush and the republicans claiming oil was being manipulated downward before the elections to steal the election and is not being manipulated upward after the election.
The first economic returns from a Democratic congress, and it doesn't look so good does it? I guess that's what you get when you start doing like Piglosi and already start pimping your socialist agenda including dictating to companies what to pay employees, what they can't pay executives and where companies can chose to locate their companies to serve the interests of their stock holders which is their first responsibility.
For months the Wall Street liberals and third party people have been telling us how wonderful gridlock would be and if the republicans lost.
Now a little reality is hitting like 600 pound gorilla.
"Wall Street turned lower Thursday as investors cashed in profits amid disappointing consumer sentiment data, rising oil prices and new worries about policy shifts in Washington. The lackluster session was to be expected after three days of gains, including a new closing high Wednesday for the Dow Jones industrials. Investors had driven stocks broadly higher this week on optimism that Democrats taking control of Congress would cause political gridlock that would be favorable to businesses.
But after some time to mull over the election results, investors are starting to become concerned about an "anti-business stance" among Democrats in Washington, said John O'Donoghue, co-head of equities at Cowen & Co."
GW will be forced to make deals to keep our military people supplied, and those deals will cost us money. Pelosi and Hilliarily said that they would take it away from for the good of someone.
Bohica Americans. Here comes our lesson given to us by those who hate GW and Republicans.
The screensave should have at the close of yesterday's business while Wall Street, Liberals and third party people were celebrating the grid lock and the lesson given to GW and Republicans.
Now the reality of a rat controlled senate and house are coming in loud and clear.
You know it. They took a beating today. The pharmaceutical companies in NJ are a major part of our economy. But you know those brain-dead NJ voters.....
"and new worries about policy shifts in Washington..."
Not new news, really ...to us.
The car companies seem to be elated even if their stock is still worth a zillion times less than it costs. It might be time to cash out, except the gold stock.
Yep.
The Dim will hold funds for the troops hostage until they get what they want. President Bush will give them what they want because he knows that the war on terror must not stop.
Certain people have lamented that we have not had to "sacrifice as a nation" during this war. Get ready. We are about to. And I don't want to hear any whining about it. (That last was not directed at you Grandpa Dave.)
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