US stocks close down
The Dow Jones industrials and Standard & Poor’s 500 ended their five-day winning streak today as investors cashed in their profits.
Tech stocks gained on positive reports from the gross domestic product and jobless claims.
Analysts said a string of largely upbeat economic data in recent days reinforced investor perception that the US recovery is back on track, but many believed stocks were due for a pullback after its recent rally.
“The market’s been acting well, and people in general feel good about that,” said Barry Berman, head trader for Robert Baird & Co. “But I think the market’s gotten the feeling it’s overbought.”
He added: “The market never goes straight up and it never goes straight down. Certainly a pullback would not be unusual ... and it does not necessarily mean the rally is over.”
The Dow fell 81.94, or 0.9%, to 8,711.18, following a five-day gain of 301 points. Earlier in the day, the blue chips rose as much as 69 points.
The broader market finished mixed. The Nasdaq composite index rose 11.71, or 0.8%, to 1,574.95, after a four-day gain of 73 points. The Standard & Poor’s 500 index fell 3.58, or 0.4%, to 949.64, having risen 33 points in the previous five sessions.
The Commerce Department reported that the US economy grew in the first quarter at an annual rate of 1.9%. The latest reading on the gross domestic product was slightly higher than the 1.6% growth rate estimated a month ago. The figure matched analysts’ expectations.
Meanwhile, the Labour Department said new claims for unemployment benefits dropped last week by a seasonally adjusted 9,000 to 424,000. Still, even with the decline, claims were above the 400,000 mark, a level associated with a weak job market.
Dollar General rose 1.50 to 18.03 after the discount retailer reported first-quarter profits that beat Wall Street’s estimates by 2 cents per share.
Decliners included Tech Data, which fell 1.64 to 24.36 after the computer hardware and software distributor reported first-quarter income that missed analysts’ estimates by 2 cents per share it also lowered its second-quarter forecast.
Lucent Technologies slipped 2 cents to 2.26 after the telecommunications company said it planned to sell 1.3 billion in convertible senior notes to lower its borrowing costs.
Advancing issues narrowly outnumbered decliners on the New York Stock Exchange. Volume was heavy.
The Russell 2000 index, which tracks smaller company stocks, rose 2.16, or 0.5%, to 432.64.
