Thursday September 17, 11:06 PM
Wall Street rally runs out of steam
NEW YORK (AFP) - Wall Street ended slightly lower Thursday as a long market rally ran out of steam with investors digesting disappointing corporate earnings reports and mixed economic data.
The Dow Jones Industrial Average fell 7.79 points (0.08 percent) to 9,783.92 as investors locked in profits after stocks advanced in eight of the previous nine sessions on strong hopes of an economic recovery.
The Nasdaq composite shed 6.40 points (0.30 percent) to 2,126.75 and the broad-market Standard & Poor's 500 index dropped 3.27 points (0.31 percent) to 1,065.49.
Trading was choppy as the market evaluated the latest batch of company financial results and government data showing new claims for unemployment benefits falling for the second consecutive week and home construction and building permits rising in August.
The market was disappointed "over sales performances in some profit reports" and a smaller-than-expected increase in housing building permits, analysts at Charles Schwab & Co. said in a report.
Software (Frankfurt: A0XFVC - news) giant Oracle (NASDAQ: ORCL - news) and package-shipping company FedEx (NYSE: FDX - news) both matched earnings expectations but posted disappointing sales.
Home construction and building permits rose in August, with a surge in the apartment sector offsetting a decline in the key single-family sector, the Commerce Department said.
"Single-family permits... were flat, after posting four straight solid gains. This reading does not trouble us, yet, since we expect the recovery to drag out over two to three years," said IHS Global Insight US economist Patrick Newport.
The Labor Department also reported that new jobless claims fell by 12,000 to to 545,000 in the week ending September 12 from the previous week's revised figure of 557,000. The figure was better than analyst expectations of 557,000.
Adding to the recovery hopes was the Philadelphia Federal Reserve Bank which said its business activity index for September hit a two-year high and which was better than expected.
Among the declining stocks was Oracle, down 2.35 percent to 21.58 dollars, and FedEx, shedding 2.23 percent to 76.46 dollars.
AMR (NYSE: AMR - news) , the parent company of American Airlines, jumped 19.73 percent to 8.80 dollars after it said it had obtained 2.9 billion dollars in new financing.
Google (NASDAQ: GOOG - news) added 0.73 percent to 491.73 dollars after the Internet search leader said it would buy reCAPTCHA, a company that produces the squiggly words used by websites to guard against spam and fraud.
The bond market rose. The yield on the 10-year Treasury bond fell to 3.398 percent from 3.471 percent Wednesday and that on the 30-year bond dropped to 4.178 percent from 4.266 percent. Bond prices and yields move in opposite directions.
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