U.S. Stocks Pare Losses After Data On New-home Sales

NEW YORK (MarketWatch) -- U.S. stocks on Monday remained in the red after multiple stabs at pulling into positive turf, as a September rebound in new-home sales helped to partially offset ongoing fears of a worldwide recession.

Financial shares rose as the Treasury focused its high-dollar rescue plan on several regional banks. .

After a triple-digit slide early on, the Dow Jones Industrial Average was lately off 13.22 points at 8,365.73, with 17 of its 30 components trading lower.

General Motors Corp. proved the heaviest weight, falling more than 6% after Standard & Poor's reiterated its sell rating on the Dow component.

The blue-chip index's gains were led by Verizon Communications Inc. , up 10.7%, after the second-biggest U.S. phone company reported a 31% rise in third-quarter profit. .

The S&P 500 fell 3.17 points to 873.6, with financials, consumer discretionary and telecommunication services pacing the gains, and energy, utilities and health care faring the worst among the S&P 500's 10 industry groups.

Standouts among financials include First Horizon National Corp. , up 18.8%, and Fifth Third Bancorp , ahead 17.1%.

Laggards among energy shares included Peabody Energy Corp. , down 8.3%, and Hess Corp. , off 7.9%.

The Nasdaq Composite declined 11.21 points to 1,540.82.

"Perhaps so much investment money has been driven to the sidelines already in the extended capitulation selling that traders won't get the typical one-day heavy liquidation bottom they long for," said Alexander Paris, a financial analyst at Barrington Research Associates Inc. "Instead, it may be a drawn-out bottom like the economy, and investors should be easing selectively into the market."

Volume on the New York Stock Exchange topped 367 million, and decliners led advancers 9 to 5. On the Nasdaq, nearly 293 million shares traded, and decliners led advancers 3 to 2.

Home sales

A report on September new-home sales had home builders taking a large step toward reducing oversupply, with the Commerce Department estimating that sales rose 2.7% last month. .

The U.S. dollar surged against the euro and British pound, but lost ground against the Japanese yen. .

Crude-oil futures declined, briefly falling below $62 a barrel, on worries that slower economic growth will curb demand for fuel. .

Overseas, stocks in Hong Kong tumbled as investors who bought shares on credit were forced to sell in a falling market. .

European investors followed suit, with more trouble in the financial sector after a German retail banking group reported a quarterly loss. .

On Friday, U.S. stocks closed at five-year lows, with the Dow industrials falling 312.3 points, or 3.6%, to finish at 8,378.95, its lowest close since April 25, 2003.


By Kate Gibson
  • CBSNews

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