Markets Slide During First Session of New Week
July 7, 2008 - 7:21 PM
(CNSNews.com) - Fears that the U.S. economy might be recovering too quickly and that the Federal Reserve might raise interest rates to slow its growth helped send all three major indexes down in Monday trading.
The Dow Jones industrial average lost 53.26 points to end the day at 9,756.53, the Nasdaq Composite index retreated 29.10 points to 1,941.64, and the Standard & Poor's 500 index fell 6.10 points to 1,047.11.
After ending the previous week with slight gains, investors on Monday put behind them reports that the economy grew at a rate of 7.2 percent in the third quarter and that the labor market showed a second straight month of stronger-than-anticipated growth.
"The question becomes, 'Can stocks maintain momentum?"' Peter Dunay, chief market strategist at Wall Street Access, told Fox News. "If the Fed raises rates sharply, it'll be tough to maintain momentum."
Among the gainers in Monday's session were Tyson Foods, Inc., which reported quarterly earnings that beat Wall Street estimates; and International Business Machines (IBM) Corp., which is expected to benefit from a jump in corporate computer spending.
One of the day's decliners was printer R.R. Donnelley, which fell more than 4 percent after stating it would buy Canadian printer Moore Wallace for $2.8 billion plus debt.
Overall, trading volume was fairly light ahead of Veterans Day, even though most markets will be open on the Tuesday holiday.
The next significant economic news is due on Thursday, when numbers on the trade deficit and initial weekly jobless claims will be released. Then, on Friday, reports on producer prices, consumer sentiment, industrial production and retail sales are expected.
Markets overseas also ended Monday's trading lower. In Europe, both Britain's FTSE 100 and France's CAC-40 lost 0.8 percent, while Germany's DAX index fell 1 percent. Also, Japan's Nikkei stock average dropped 1.2 percent.
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