Economic worries stall Wall St gains
US stocks sagged yesterday and the Dow closed below 10,000 a day ahead of an expected downward revision in US second-quarter economic growth and a major speech by Federal Reserve chairman Ben Bernanke.
Major technology shares were among the biggest losers, with the Nasdaq falling more than the Dow and S&P 500. Tech shares have been seen as a proxy for economic growth. Cisco Systems fell 2.4 per cent to $20.70, while Intel gave up 1.6 per cent at $18.18.
A drop in shares of coal companies also weighed on the energy sector.
Stocks initially rose on data showing first-time claims for jobless benefits fell more than expected last week, but the number was still too high to signal a shift in the weak labour market. The four-week average of new claims, regarded as a better gauge of trends, rose to the highest since late November.
The Dow Jones industrial average fell 74.25 points, or 0.74 per cent, to 9,985.81. The Standard & Poor’s 500 Index shed 8.11 points, or 0.77 per cent, to 1,047.22. The Nasdaq Composite Index lost 22.85 points, or 1.07 per cent, to 2,118.69.
It was the first time the Dow has closed below the psychologically important 10,000 level since 6 July.
In his speech today Bernanke is likely to discuss the uncertain prospects for the economy but isn’t expected to give many clues about whether the US central bank will pump more cash into the economy to keep the recovery going.
After a recent spate of poor economic numbers, there were jitters the GDP data could show the economy is weaker than originally thought. The government’s preliminary reading is expected to come in at 1.4 per cent, down from 2.4 per cent estimated a month ago.
In deal news, Dell raised its bid for data storage company 3PAR to $1.6bn, offering slightly more than bigger rival Hewlett-Packard.
HP came back with a revised proposal after the closing bell, sending 3PAR’s shares up 7.2 percent to $27.90 in extended-hours trading. Shares of 3PAR closed at $26.76. HP closed down 0.1 per cent at $38.22, while Dell ended down 0.3 per cent to $11.75.