U.S. Stocks Fall, On Track To Close At Five-year Lows
NEW YORK (MarketWatch) -- U.S. stocks fell Tuesday, with the major indexes headed to their lowest close in more than five years, after a gauge of home building sank, erasing optimism that came as retailer Home Depot Inc. reported better-than-anticipated results.
"My personal bottom line is however the dream or nightmare ends, we're not close to the end yet," said Linda Duessel, equity market strategist at Federated Investors.
After shifting between positive and negative territory, the Dow Jones Industrial Average was off 154.28 points to 8,119.3, putting the blue-chip index on pace to its lowest finish since April 1, 2003.
All but two of the Dow's 30 components lost ground in late session trade.
General Motors Corp. ranked as the Dow's leading decliner, off 12%.
The chief executives of GM, Ford Motor Co. and Chrysler LLC, along with the president of the UAW, are pressing their case for government assistance in a Senate hearing. .
Citigroup Inc. also weighed heavily on the Dow, sliding 11.1%.
The blue-chip benchmark's biggest gainer was Hewlett-Packard Co. , up 11.3% after the personal-computer maker said it would beat Wall Street targets for its fourth quarter and for the fiscal year.
Shares of Home Depot lost earlier the bulk of its early traction, falling after the National Association of Home builders reported its monthly market index fell to a record low in November. .
The home improvement retailer had rallied earlier on after it reported a shallower-than-forecast 31% profit fall for the third quarter.
Treasury Secretary Henry Paulson and Federal Deposit Insurance Corp. Chairwoman Sheila Blair clashed over whether to use some of the $700 billion package to aid Americans facing foreclosure on their homes.
"We're in a policy vacuum at the moment -- and the market hates uncertainty. What are we in the market supposed to do between now and Jan. 20?" said Duessel, referring to President-elect Barack Obama's inauguration date.
The S&P 500 shed 21.47 points to 829.29 and the Nasdaq Composite lost 47.95 points to 1,434.1, with both on track for their lowest finishes since spring 2003.
The financial, telecommunication services and consumer discretionary sectors fronted declines that included all 10 of the S&P's 10 industry groups.
Volume remained razor thin at 945 million shares on the New York Stock Exchange, where decliners outpacing advancers 5 to 1. On the Nasdaq, 677 million shares traded, and decliners topped advancers 3 to 1.
"It's eerie, the low volume. There is a lot of money on the sidelines," said Duessel.
On the New York Mercantile Exchange, crude ended below $55 a barrel for a second day on concerns about weakening demand. .
Stocks on the move
Off the Dow, Yahoo Inc. shares climbed 5.9% after the company said CEO Jerry Yang would step aside, six months after merger talks broke down between Microsoft Corp. and the Internet tech giant. .
Citing the uncertain retail environment, Corning Inc. withdrew its previous forecast for the fourth quarter and 2009, saying it now expects fourth-quarter sales to be below management's prior range.
Corning's shares fell 11.2%.
In another illustration of the troubled economy, Host Hotels & Resorts Inc. said it is cutting its forecast for comparable hotel revenue per available room and is withdrawing its remaining 2008 outlook.
Pepsi Bottling Group Inc. announced job cuts and warned on profits, with shares of the beverage maker and distributor slipping 4.3%.
The Labor Department reported U.S. producer prices declined a record 2.8% in October, the most since 1947, as gasoline prices plummeted. .
U.S. stocks ended with sharp losses on Monday as Alcoa Inc. stumbled on a downgrade and as Citigroup Inc. said it would cut more than 50,000 jobs. The Dow Jones Industrial Average fell 233 points, the Nasdaq Composte lost 34 points and the S&P 500 fell 22 points.
By Kate Gibson