Housing and Durable Goods Reports Reverse Upward Momentum of US Stocks

[steven johnson]

There has been a large rally in stocks over the last six months but the bloom may be off the rose. Critical reports on the labor market, the manufacturing sector, the housing market and the health of the consumer are all due in the week ahead. Consumer spending has typically driven two-thirds of the economic growth in this country, but the recovery currently in the works won't have the same motor. With millions of people out of work, hoarding cash in savings accounts and holding back on non-essential purchases, the recovery is bound to be sluggish.

Sunday, September 27, 2009

U.S. stocks had their worst week since July as disappointing reports on housing and durable goods

Shares of most of the Dow Jones industrial average's 30 companies lost ground as sales of new homes rose less than forecast and demand for goods that are made to last for several years unexpectedly fell.

Bank of America dropped 5.8 percent and American Express lost 4.9 percent as the Federal Reserve said it will cut the size of two programs meant to bolster credit markets. Commodity producers declined as crude oil and metals prices retreated.

The Standard & Poor's 500-stock index fell 2.2 percent, to 1044.38, as all 10 of its industry groups declined. The Dow Jones industrial average lost 155.01 points, or 1.6 percent, to 9665.19. The Nasdaq composite index slid 2 percent, to 2090.92.



Reports Reverse Upward Momentum