U.S. Stocks Down Again After Early Bounce Sputters
NEW YORK (MarketWatch) -- U.S. stocks on Friday turned heels on an early rebound Friday after the government reported U.S. industrial production declined 0.5% in October and FedEx Corp. and Starbucks Corp. lowered their earnings forecasts, capping an early advance.
"Weak industrial production numbers and profit warnings from FedEx and Starbucks have put the market on the defensive again," said Michael Sheldon, chief market strategist at Spencer Clarke LLC.
The industrial production and other recent data suggest "downside risk to the remaining fourth-quarter sentiment reports," said analysts at Action Economics. .
Ahead by more than 80 points early on, the Dow Jones Industrial Average was more recently off 11.9 points at 13,098.2, with 19 of its 30 components trading lower.
One of the Dow's bright spots was Hewlett-Packard , up 1.8% following its upgrade to overweight from equal-weight by Morgan Stanley.
The S&P 500 advanced 2.36 points to 1,448.79, while the Nasdaq Composite declined 4.16 points to 2,614.35.
Early volume on the New York Stock Exchange came to 650 million shares, with decliners outpacing advancers on the Big Board by nearly 2 to 1. On the Nasdaq, more than 933 million shares traded, and decliners topped advancers, nearly 2 to 1.
Fed factor
In a speech early Friday, Federal Reserve Gov. Randall Kroszner threw more water on the possibility of an additional rate cut before the end of the year, saying rates are already low enough to get the economy through a coming "rough patch." .
On Thursday, further worries about the beleaguered financial sector hit stocks, with the Dow falling 120 points, marketing its sixth down day in the last seven sessions.
Those credit woes continued to batter stocks Friday, with Fannie Mae holding a news conference to talk about Fortune Magazine's online report that the U.S. mortgage lender may have masked rising credit losses.
Oil prices rose on expectations that supplies would stay tight, with crude-oil futures for December delivery recently up $1.57 to $95 a barrel on the New York Stock Exchange.
The dollar fell against the euro but gained on the yen, while the dollar index, which measures the greenback against a basket of six major currencies, was at 75.93, down from 76.02. .
Active shares
FedEx Corp. fell after it lowered its fiscal second-quarter forecast due to rising fuel costs. .
Shares of Starbucks fell 8.2% after it too trimmed its earnings forecast.
Retailer Kohl's also cut its earnings projection while reporting a 13% profit drop.
Other corporate news included Cisco Systems' announcement of a $10 billion stock buyback.
In overseas trading on Friday, stocks priced in the credit crunch worries after the Federal Reserve injected $47 billion in temporary reserves into the banking system Thursday, the largest such infusion since September 2001.
In Asia, markets fell, with Hong Kong stocks hit the most.
By Kate Gibson