|
Wall St closes lower
By Vivianne Rodrigues
August 24, 2005
NEW YORK: US stocks fell
today, led by declines in Citigroup Inc and other financial services
stocks, as a drop in existing home sales raised concerns about
consumer and mortgage lending.
Shares in Citigroup, the
world's largest financial institution, dropped 1.5 per cent to
$US43.56, while the Philadelphia KBW Bank Index fell 0.9 per cent.
Citigroup, a Dow component, also fell as the company said Marjorie
Magner, its consumer banking chief, will leave.
Demand for home-building stocks declined after a report by the
National Association of Realtors showed sales of previously owned
homes slowed more than expected last month, falling 2.6 per cent to
a seasonally adjusted annual rate of 7.16 million units from a
record in June.
An index of home-builder shares fell 1.1 per cent.
"Stocks have been losing steam as a result of higher rates and
higher energy prices," said Carl Birkelbach, president of Birkelbach
Management Corp in Chicago, with $US200 million in stocks. "We could
see a continued correction in prices from now until the next
earnings season."
The Dow Jones
industrial average slid 50.31 points, or 0.48 per cent, to end at
10,519.58. The Standard & Poor's 500 index dropped 4.14 points,
or 0.34 per cent, to finish at 1,217.59. And the technology-laced
Nasdaq Composite Index fell 4.16 points, or 0.19 per cent, to
2,137.25.
US light crude for October delivery, the new front-month
contract, rose US6c to settle at $US65.71 a barrel, after earlier
climbing as high as $US66.10 on the New York Mercantile Exchange.
That was just $US1 a barrel below the record NYMEX crude futures
price of $US67.10 reached on August 12.
Oil companies' shares slipped in sync with crude futures
declining from the session high. Exxon Mobil Corp dipped 0.1 per
cent, or US7c, to $US59, off its intraday low of $US58.39.
ConocoPhillips dropped 0.8 per cent, or US53c, to $US62.68, and
Chevron Corp fell 0.5 per cent, or US27c, to $US60.07.
Furniture maker and retailer La-Z-Boy Inc's stock slid 3 per
cent, or US42c, to $US13.57 on the NYSE after the company said
higher energy prices were contributing to weak furniture demand.
Shares of the No 2 home builder Pulte Homes Inc fell 0.8 per
cent, or US68c, to $US83.48, and No 3 Lennar Corp fell 1.3 per cent,
or US79c, to $US58.93, both on the New York Stock Exchange.
"Earlier this year, home-builder stocks were going up like
Superman," said Al Goldman, a chief market strategist at AG Edwards
in St Louis. "Today's drop in the home sales report provided a good
excuse for managers to finally sell those stocks and lock in some
profits."
Shares of other US banks, including Bank of America Corp and
Wells Fargo and Co, fell. Bank of America lost 0.9 per cent, or
US40c, to $US43.34, and Wells Fargo declined 1 per cent, or US62c,
to $US60.05. Earlier this month, the Federal Reserve raised the
benchmark lending rate to 3.5 per cent.
Merck & Co fell for the third day in a row after a Texas jury
found the company negligent last Friday in the death of a man who
took its painkiller drug Vioxx. Shares of Merck, the No 3 US drug
maker, slid 1.1 per cent, or US31c, to $US27.58 and dragged other
drug companies' shares lower. Johnson & Johnson fell 1.2 per
cent, or US74c, to $US62.76.
"Drug companies are being hit by the Merck trial," Goldman said.
"But since their valuations are still cheap, we might see a sharp
rebound in their stock prices soon."
The American Stock Exchange Pharmaceutical Index dropped 0.9 per
cent.
Trading was moderate on the New York Stock Exchange, where
decliners beat advancers by a ratio of about 5 to 4, with about 1.28
billion shares changing hands, down from the 1.46 billion daily
average for last year.
On Nasdaq, decliners also outnumbered advancers by a ratio of
about 5 to 4, with about 1.38 billion shares changing hands, down
from the 1.81 billion daily average last year.
Reuters
|
|
