Stock Market Gauges Fall to Lowest Levels This Year Amid Growth Worries

Strategic Insights -

The major stock market gauges, including the Dow Jones industrial average and the Standard & Poor's 500-stock index, dropped to their lowest levels this year as investors grew concerned about slower economic growth. The Nasdaq composite index, which has been hit particularly hard, closed down 1.4 percent despite a strong earnings report from Apple Computer. The Dow Jones industrial average fell 1.2 percent, with the Standard & Poor's 500-stock index dropping 1 percent. The market's decline was driven by signs of slowing growth, including a weak 0.3 percent increase in retail sales and an unexpected surge in the nation's trade deficit in February.

Key Takeaways:

  • The Dow Jones industrial average fell 1.2 percent, the Standard & Poor's 500-stock index dropped 1 percent, and the Nasdaq composite index closed down 1.4 percent yesterday.
  • Stocks sensitive to signs of slowing growth, such as Caterpillar and General Motors, led the market lower, accounting for about 91 points of the Dow's 125-point decline.
  • Shares of General Motors fell nearly 6 percent, or $1.67, to $26.66, its lowest since January 1993.
  • The Morgan Stanley cyclical index of 30 stocks fell 2.7 percent, after dropping 1.9 percent on Wednesday.
  • Oil prices, stubbornly above $50 a barrel, and worries about inflationary pressures are contributing to the market's decline.
  • Despite positive corporate news, investors are reacting nervously to hints of softness in the economy, with some economists forecasting a slowdown in the first quarter.
  • Apple Computer's strong earnings report was not enough to boost investor confidence, with shares plunging 9.2 percent.

Statistics:

  • The Dow Jones industrial average fell 125.18 points, to 10,278.75, its lowest level since November 3.
  • The Nasdaq composite index declined 27.66 points, to 1,946.71, its lowest since October 26.
  • The Standard & Poor's 500-stock index dropped 11.74 points, to 1,162.05, its lowest since November 4.
  • Oil prices rose 1.8 percent to $51.13 on the New York Mercantile Exchange.
  • The price of the 10-year note jumped 13/32, to 97 16/32, with the yield falling to 4.31 percent.

Sources:

  • Associated Press
  • Bloomberg Financial Markets
  • Oak Associates
  • I.B.M.
  • Apple Computer
  • United States Department of Commerce
  • UBS
  • Federal Home Loan Mortgage Corp.