“Tense feeling” adds to decline
NEW YORK - Wall Street ratcheted its way through a fractious session Monday before finally closing lower on expectations of further fallout from the ongoing credit crisis.
The Dow Jones industrials, up more than 100 points during the day, ended below 13,000 for the first time since August. The Dow fell 55.19 to close at 12,987.55, after falling more than 4 percent last week.
Microsoft, one of the 30 Dow stocks, retreated 35 cents to close at $33.38 a share. Boeing, also a Dow stock, fell $1.35 to $92.86.
The Standard & Poor’s 500 index fell 14.52 to 1,439.18.
The Nasdaq composite index dropped 43.81, or 1.7 percent, to 2,584.13 - the biggest decliner among the major indexes as investors sold technology stocks. Selling was especially strong in tech stocks as more investors succumbed to the view that the sector is not strong enough to provide the economy with a cushion against the weakness in housing.
The last time the Dow traded below 13,000 was on Aug. 17, when it hit a low of 12,847.24, and the last time it closed below 13,000 was on Aug. 16, when it ended at 12,845.78. The Dow has fallen 1,210.55, or 8.53 percent, from the all-time trading high of 14,198.10 that it reached Oct. 11. Its record high close was 14,164.53, set Oct. 9.
It was the fourth-straight session that stocks lost ground. Analysts said investors had few reasons to sustain the early rally Monday, even with many stocks at enticingly low prices after recent routs.
“The problem is just the mood of the market,” said Peter Cardillo, chief market economist at Avalon Partners, said of Wall Street. “There is a tense feeling that there will be still more problems with the subprime situation and a fear that things are going to get worse rather than better.”
Trading in many corners of the market was light because of Veterans Day, with the government bond markets closed. This could account for some volatility as institutional traders sought positions ahead of economic reports, including readings on inflation, later in the week.