Saturday, August 29, 2009
NEW YORK (AP) — Stocks mostly fell Friday as investors balked at extending the market’s recent rally despite an improved outlook from Intel Corp.
Trading was quiet, as it has been all week, as summer vacations kept many traders out of the market. With fewer participants, the market has lost some of its recent momentum that sent the major indexes up about 5 percent in less than two weeks.
The market got an initial boost after the world’s largest maker of computer chips raised the top end of its sales forecast for the current quarter from $8.9 billion to $9.2 billion.
But the Intel news wasn’t enough to keep stocks afloat.
The market’s mood has turned cautious this week, dampening the euphoria around Federal Reserve Chairman Ben Bernanke’s upbeat assessment of the economy that helped lift stocks about 2 percent last week.
Investors are worried that after sending stocks up more than 45 percent since early March, the market’s rally may have run its course.
“Our view is it won’t be straight up,” said David Darst, chief investment strategist at Morgan Stanley Smith Barney. “The power of this rise has been double the power of the last 10 bull markets on average.”
Trading is expected to remain erratic through at least the next week as summer on Wall Street winds to a close.
According to preliminary calculations, the Dow fell 36.43, or 0.4 percent, to 9,544.20. The Standard & Poor’s 500 index fell 2.05, or 0.2 percent, to 1,029.93, while the Nasdaq composite index added 1.04, or 0.1 percent, to 2,028.77.
Intel’s upbeat report came after computer maker Dell Inc. posted better-than-expected results for its May-July quarter late Thursday. While sales continued to fall because of reduced spending by consumers and businesses, Dell said it has seen signs of improvement.
Intel shares rose 78 cents, or 4 percent, to $20.25, while Dell added 28 cents to $15.93.
Among the economic data Friday, a Commerce Department report said consumer spending rose 0.2 percent in July, which was in line with economists’ expectations.
Growth in spending and consumer confidence has been slowed by rising unemployment and weak income growth. Spending got a boost during the month from an increase in auto sales tied to the popular “Cash for Clunkers” program. Recent economic data has largely benefited from the government’s various stimulus programs, and investors have been worried about how well the economy will fare without government support.
The latest report also said personal income was flat in July. Economists had expected a 0.2 percent increase. Personal income has been hammered during the recession as employers cut payrolls and force workers to take unpaid days off to hold down wage costs.