Stocks Close Lower as Materials, Energy Slump
NEW YORK (TheStreet) -- The U.S. market settled in the negative for the second straight session as material and energy stocks lagged after a weaker-than-expected report on durable goods orders.
On the Dow, Caterpillar (CAT) and Alcoa (AA) sunk to the bottom, suggesting that investors were worried still about global economic growth. Eight components were in positive territory, led by American Express (AXP) and Coca-Cola (KO).
Both material and energy stocks were down 1.4% and 1.3%.The latest read on orders from domestic manufacturers fell short of suggesting that manufacturing in the country is on a solid path to recovery. The Commerce Department reported that durable goods orders in February rose 2.2%, missing the consensus forecast. Economists were expecting a 2.9% rebound after a 3.7% drop in January according to Thomson Reuters. Without taking into account transportation, durable goods orders rose 1.6% in February after a 3% plunge in the prior month. Also, Federal Reserve Chairman Ben Bernanke warned that it is "far too early to declare victory" on the U.S. economy. According to a transcript of his interview with ABC on Tuesday, Bernanke once again reminded viewers that the jobless rate of the world's biggest economy is too high and that accommodative monetary policy is needed. In the prior session, stocks finished lower after consumer confidence and home prices data came in below expectations. "I continue to be short-term negative on the market," wrote Brian Sozzi in a blog posting at RealMoney. "As the week has worn on, that opinion has really crystallized in light of various economic readings." After stocks posted their worst week year-to-date last week, many investors are trying to assess whether the market has further to pullback. "We went back to the 1950s and found that the 17.7% rally since mid-December makes this roughly the 270th best rally in this time frame," said Dan Greenhaus, strategist with BTIG. "While the S&P 500 was lower one month later roughly 45% of the time, six months later, the S&P 500 was lower after this type of a rally just 9.0% of the time." Germany's DAX finished down 1.1% while London's FTSE lost 1%. The Hong Kong Hang Seng closed down 0.8% while the Nikkei Average in Japan finished lower by 0.71% overnight.
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