NEW YORK, April 12: Stocks slipped on Friday for the third time in four sessions as worries about the US economy and corporate earnings took the shine off surprisingly strong readings on retail sales and consumer sentiment.
The market surged more than 1 per cent at the open after retail sales showed American consumers went on a spending spree in March even as sentiment was hitting decade lows. A rebound in confidence in early April suggested consumption should stay strong enough to steer the economy clear of recession.
I was also encouraged by the retail figures because quite frankly, I was thinking the consumer might slow down, said Subodh Kumar, chief investment strategist at CIBC World Markets in Toronto. But “the focus has shifted toward earnings. The market wants to be cautious ahead of earnings season.
News about corporate America was less than stellar. Boeing Co., the world’s No. 1 jet maker, fell after warning of $1.2 billion in charges, while Wal-Mart Stores Inc., the world’s leading retailer, slid on a sour investment call. Boeing fell 2.3 per cent, and Wal-Mart was off 2.9 per cent.
The blue-chip Dow Jones industrial average closed down 17.92 points, or 0.22 per cent, at 8,203.41, and the broad Standard & Poor’s 500 fell 3.28 points, or 0.38 per cent, to 868.30, according to the latest figures. Both indexes had risen 1.4 per cent on the retail data soon after the open.
The Nasdaq Composite Index slipped 6.76 points, or 0.5 per cent, to 1,358.85. It had been up as much as 1.6 per cent.
For the week, the Dow fell 0.89 per cent, the S&P was off 1.2 per cent and Nasdaq shed 1.78 per cent.
Next week is one of the busiest of the quarterly earnings reporting season, and many companies have warned that results will fall short of estimates. Investors are struggling to determine how much earnings were hurt by uncertainty over the Iraq war and how much profits will pick up once it ends.—Reuters
