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SMALL BUSINESS
Reports on consumer confidence, GDP tug at stocks
By STEPHEN BERNARD and SARA LEPRO
, AP
NEW YORK -Stocks retreated from 13-month highs after a lackluster reading on consumer confidence and a report showing slower economic growth sapped the market's optimism.
Major stock indexes fell more than 0.5 percent in early trading Tuesday after the Conference Board said its Consumer Confidence Index increased slightly to 49.5 in November, up from a revised reading of 48.7 in October. While better than expected, the report indicates that consumers remain gloomy heading into the holiday season. A reading above 90 means the economy is on solid footing, and one above 100 signals strong growth.
Stocks had been falling prior to the report after the government said the economy grew at a slower pace in the third quarter than originally reported.
The Commerce Department said the nation's economy grew at a 2.8 percent rate in the third quarter, down from an initial estimate of 3.5 percent — fresh evidence that while a recovery is under way, it is likely to be slow and bumpy.
The decline in stocks came after a big rally Monday carried the Dow Jones industrials up 133 points to its highest level in just over a year. A weakening dollar and an upbeat report on housing lured investors back into stocks after a three-day losing streak. The dollar bounced back on Tuesday, hurting stock market sentiment.
The dollar's weakness has been a big driver behind higher stock prices this year. Investors have been taking advantage of record-low interest rates to invest in assets other than cash that can earn them better returns.
As the end of the year approaches, however, investors have become hesitant to take on more risk and potentially upset the big gains they've amassed since the stock market began rallying in March. That desire for safety helps push up the dollar and other safe-harbor investments like Treasurys at the expense of the stock market.
Analysts expect trading to be choppy this week amid light trading volume heading into the Thanksgiving holiday.
The Dow fell 68.02, or 0.7 percent, to 10,382.93. The Standard & Poor's 500 index lost 6.39, or 0.6 percent, to 1,099.85, while the Nasdaq composite index fell 16.71, or 0.8 percent, to 2,159.30.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
2009-11-24 11:00:37
COMMENTS ( 1185 )
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Ajallenky
1:48PM Nov 23 2009
Anyone who thinks that the Federal Reserve or Wall St was responsible for this financial fiasco is WRONG - the real culprits are the MORONS in Congress whose JOB it was to watchdog Wall St through the appointment of SEC auditors while the Fed Reserve, while incompetent, tries its best to side step both political parties and remain neutral - Wall St has ALWAYS been filled with crooks that would steal the pennies off their dead mothers eyes, BUT CONGRESS was suppose to swear an oath of office to protect the public and they failed miserably at their jobs - look at who Barney Frank appointed to the Board of Directors at Fannie Mae before their collapse - HIS SIGNIFICANT OTHER all the while espousing to the public that all was OK at Fannie - He should be run out of Washington on a RAIL !!!!
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