Wall Street Continues Mid-Week Slide
July 7, 2008 - 7:21 PM
(CNSNews.com) - After a brief excursion into positive territory Thursday morning, stocks fell for the second straight trading session due to a larger-than-expected decline in orders for durable goods.
All three major markets continued the decline that began on Wednesday. The Dow Jones industrial average lost 81.55 points to close the day at 9,343.96. The Nasdaq Composite index dropped 26.50 points to 1,817.20, and the Standard & Poor's 500 index fell back 6.12 points to 1,003.28.
Early in the day, the Census Bureau and the Department of Housing and Urban Development released data showing that sales of new single-family homes rose 3.4 percent in August, the second highest rate on record. An estimated 1.15 million new homes were sold last month, a 12.2 percent increase from August of 2002.
"The growth reflected in today's numbers is yet another indicator that housing continues to lead the way in our rebounding economy. This administration is committed to making it easier for more Americans to realize the dream of homeownership," said HUD Secretary Mel Martinez. "The president's housing initiatives will pave the way for more Americans, particularly minorities, to achieve that dream."
However, the resulting rally lasted only until investors learned that orders for factory goods expected to last three years or more fell in August by 0.9 percent as demand for automobiles dropped sharply, the first such decline since April.
The number of Americans seeking unemployment benefits for the first time dropped sharply last week to the lowest level since early February, though some analysts speculated that some of the decrease was due to workers not being able to file claims because of Hurricane Isabel, which hit the East Coast a week ago.
While Thursday's stock reports were mostly negative, some analysts have begun looking hopefully to third-quarter earnings reports, which will start being released next week.
"We have started to see this year a trend where companies make conservative estimates on their earnings, Thomas Lydon, Jr., president of Global Trends Investments in Newport Beach, Calif., told the Associated Press. "In the past three quarters, earnings have exceeded expectations. I think we will continue to see that next quarter."
Overseas markets mostly reflected the negative mood on Wall Street. Stocks in Japan, France and Britain all declined about 1 percent, while Germany's DAX index rose 0.6 percent.
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