Wall St dips despite the Fed’s bullishness
US stocks fell yesterday on lacklustre economic data in a session marked by low volume and choppy trading, but losses eased after the Federal Reserve raised its expectations for growth in 2010.
Stocks fell early in the session as revised government data on gross domestic product showed the US economy grew at a slower-than-expected pace in the third quarter.
Hewlett-Packard shares led the Dow industrials lower a day after the technology bellwether said in its results that the US economy remained challenging.
With the S&P 500 up 22 per cent so far this year, investors were struggling to justify additional gains after a series of middling economic reports.
However, the downbeat mood was tempered after the Fed revised upward its growth expectation for 2010, while minutes of the FOMC’s most recent meeting showed officials are increasingly confident about a durable recovery for the US economy.
“You’re getting the cross-current of weak revisions to third-quarter data matrixed against the Fed increasing the growth estimates for the economy for the next year,” said Jim Awad, managing director at Zephyr Management in New York.
“But the action in the market is moderate going into the holiday weekend and I wouldn’t read too much into it.”
The US stock market will be closed tomorrow in observance of Thanksgiving Day. On Friday, it will be open for only half a day due to the holiday.
The Dow Jones industrial average . dropped 17.24 points, or 0.16 per cent, to end at 10,433.71. The Standard & Poor’s 500 Index inched down just 0.59 of a point, or 0.05 per cent, to 1,105.65. The Nasdaq Composite Index fell 6.83 points, or 0.31 per cent, to 2,169.18.
Hewlett-Packard fell 1.6 per cent to $50.19 a day after the blue-chip computer and printer maker reported a quarterly profit that matched its preliminary results, but said the economy remained challenging.
HP also said it saw growth in its share of US enterprise personal computers, which is rival Dell Corp’s key market. Dell’s stock fell 3.2 per cent to $14.32 and ranked as a top drag on the Nasdaq 100.