Wall Street Creeps Lower
Updated from 9:51 a.m. EDT
Stocks in the U.S. were falling Friday as oil soared to a new record high and consumer confidence took yet another slide.
The
Dow Jones Industrial Average
was down 24 points at 12,969, and the
S&P 500
was off 3 points at 1421. The
Nasdaq Composite
was losing 16 points to 2518.
Equity measures were weak from the outset, but fell further after the University of Michigan's preliminary May consumer confidence index eased nearly another 3 points to a 28-year low of 59.5, well under expectations for a dip to 62.
Though the report reflects economic deterioration that has already occurred, it still tends to be a closely watched gauge on the health of American consumers, who over the past few months have been beaten buffeted by the housing crisis, spiking gas prices and an uncertain jobs environment.
Another key story was the data on housing starts, which surprisingly jumped in April. The Commerce Department said the number of homes on which construction began last month climbed to an annualized rate of 1.032 million from an upwardly revised reading of 954,000 in the prior month. Economists were looking for a drop to 940,000.
"The main reason forecasters missed the April figure was a big increase in starts for multifamily homes," wrote Tony Crescenzi, chief bond market strategist with Miller Tabak and a contributor to
RealMoney.com
, a sister site to
TheStreet.com
. He pointed out that this figure is normally a volatile one.
Crescenzi added that, excluding January 1991, single-family home starts were at their lowest level since 1982. "This is good news, as it will help to clear the massive overhang of unsold homes by limiting the amount of new homes put into the housing stock," he said.
Also, the number of building permits issued rose by 46,000 in April to 978,000, compared with consensus estimate for a drop to 912,000 permits.
Homebuilding stocks overall were lower, but
Hovnanian
(HOV) - Get Report
was up 1.7%.
Toll
(TOL) - Get Report
and
Lennar
(LEN) - Get Report
were weaker.
The other big news was taking place in the oil market, where crude oil was jumping $3.38 to $127.50 a barrel, its highest level ever. Gold was up $7.60 to $887.60. The U.S. dollar was down 0.2% against the euro at $1.5481 and firmed by 0.2% against the yen at 104.90.
Most shares in the energy complex were strengthening, including
Exxon Mobil
(XOM) - Get Report
,
Halliburton
(HAL) - Get Report
and
Transocean
(RIG) - Get Report
.
On the corporate side,
Kohl's
(KSS) - Get Report
slipped 4.2% after the department-store chain knocked down its 2008 profit guidance to between $2.95 and $3.15 a share. The company's first-quarter profit dropped 26.8%, though it did top analysts' pessimistic expectations.
Nordstrom
(JWN) - Get Report
, however, gained ground on its own earnings beat, even as its bottom line shrank by 24%. The specialty retailer also whittled down its full-year outlook. Shares were adding 1.1%.
Away from retail,
Autodesk
(ADSK) - Get Report
came in ahead of projections as the design-software firm saw its first-quarter income rise 14% from the prior year. Still, the stock erased early gains to lose 0.9%.
Compuware
(CPWR)
posted a
lower first-quarter profit
of $61.2 million, or 23 cents a share. That tops the Thomson Reuters estimate by 2 cents a share. Shares started out lower before hiking up 1.1%.
Treasury prices were rising. The 10-year note was up 7/32 in price to yield 3.79% and the 30-year bond was gaining 18/32 in price, yielding 4.51%.
Meanwhile, the United Nations said in its mid-2008 report that "the world economy is teetering on the brink of a severe global economic downturn" spawned by the U.S. credit crisis, the dollar's long fall, spiking oil and food prices, and "persisting global imbalances." The U.N. predicted that global growth will pull back sharply this year, to 1.8% from last year's 3.8%, and pegged a recovery only to 2.1% in 2009.
Overseas markets were mainly rising. The Nikkei 225 in Tokyo lost 0.2% overnight, but the Hang Seng Index in Hong Kong rose 0.4%. As for Europe, the FTSE 100 climbed 1% and Germany's Xetra Dax jumped 1.2%. The Paris Cac was higher by 0.5%.