Bush’s tax-relief plan fails to help market

The Dow and the Nasdaq lost 4 percent this week.

NEW YORK (AP) — Wall Street ended a painful week with another decline Friday as skittish investors unable to hold on to much optimism about the economy drew little comfort from President Bush’s stimulus plan.

The day’s trading reflected how fractious Wall Street has been in the new year. Investors pulled back from a big early advance, with the major indexes trading mixed as Bush began to speak.

By the time the president finished announcing a plan for about $145 billion worth of tax relief, the indexes were well into negative territory.

“It’s disappointed in the size of the economic growth package. Wall Street’s showing its displeasure,” said Kim Caughey, equity research analyst at Fort Pitt Capital Group in Pittsburgh. “Honestly, I think the institutional investors understand the limits to the government’s ability to enact economic change.”

According to preliminary calculations, the Dow Jones industrial average, which was up more than 180 points early in the session, fell 59.91, or 0.49 percent, to 12,099.30.

The Dow plunged 306 points Thursday amid deepening pessimism about the economy.

The broader Standard & Poor’s 500 index fell 8.06, or 0.60 percent, to 1,325.19, while the technology-focused Nasdaq composite index dropped 6.88, or 0.29 percent, to 2,340.02.

For the week, the Dow and the Nasdaq lost 4 percent, while the S&P 500 gave up 5.4 percent.

In the 13 trading sessions of the 2008, the Dow has lost nearly 9 percent, while the S&P has fallen 9.75 percent and the Nasdaq nearly 12 percent.

Disappointment with Bush’s plan came as investors were searching for those companies that might be weathering the economic slowdown well.

Some are indeed doing better than expected — such as International Business Machines Corp., which told Wall Street late Thursday to raise its 2008 profit estimates for the tech company, and General Electric Co., which posted a fourth-quarter profit rise Friday.

But many others are struggling. Washington Mutual Inc. reported a steep loss late Thursday for the fourth quarter, as Citigroup Inc. and Merrill Lynch did earlier in the week. With the banking industry trying to fix its shrinking portfolios and preparing for more distress in consumer debt, the economy may only have the government to fall back on — and Wall Street didn’t hear as much as it wanted from Bush.

Steven Goldman, chief market strategist at Weeden & Co., contends Wall Street remains concerned about whether other economic troubles are lurking.

“It’s a culmination of factors that have been in existence for a while — it’s the unknown,” he said.