Stocks Can't Shake Losses at the Close
08/13/08 - 04:07 PM EDT
Mike Taylor
Updated from 3:18 p.m. EDT
Stocks in New York briefly flirted with positivity Wednesday afternoon but sold off into the close after an increase in crude prices and disappointing July retail sales news earlier in the day dealt a double blow to investor sentiment. The Dow Jones Industrial Average lost 109.51 points, or 0.9%, to 11,532.96, and the S&P 500 dropped 3.78 points, or 0.3%, to 1,285.81. The Nasdaq shed 1.99 points, or 0.1%, to 2,428.62. Crude-oil inventories for the week ended Aug. 8 decreased by 400,000 barrels, and gasoline supplies dropped by 6.4 million barrels. The price of crude oil jumped $3.27 to $116.28 a barrel following the announcement. Gold rose $16.90 to close at $831.50 an ounce. On the economic data front, the Census Bureau reported that retail sales decreased 0.1% in July, a result that fell short of economists' projections for a flat reading. Barring automobiles, retail sales increased 0.4%, less than the expectation for a 0.5% increase. The Bureau of Labor Statistics' import price index rose 1.7% in July. Excluding oil, the price of imported goods increased 0.9%. Export prices, excluding agricultural products, rose 0.8% in July, a smaller increase than 0.9% in June. Peter Cardillo, chief market economist at Avalon Partners, said that the retail sales data weren't that negative, especially discounting automobile sales. He also said that the U.S. consumer is struggling, but he doesn't foresee an actual drop in spending. "I think the market is basically ... pulling back from the strong rally, the dollar-oil rally that we had the past week or so," he said. He said that as the market decouples from the trend of a rising dollar and declining oil prices, it may try to retest its July lows.
RSS
