Stocks lower as investors sift through data

Wall Street turns lower as investors sift through more data showing an anemic economyNEW YORK (AP) -- Wall Street pulled back in quiet pre-holiday trading Tuesday amid further signs that the housing market and overall economy are still struggling. The Dow Jones industrial average fell about 100 points.


The Commerce Department reported third-quarter gross domestic product, a measure of the economy that tallies the value of goods and services, fell at an annual rate of 0.5 percent. That was in line with analysts' expectations and matched the government's estimate of a month ago.

The government also reported that sales of new homes fell in November to the slowest pace in nearly 18 years, while new home prices dropped by the biggest amount in eight months. New home sales fell by 2.9 percent to a seasonally adjusted annual sales pace of 407,000 units, a weaker performance than economists had expected and was the slowest sales pace since January 1991. The median price of a new home sold in November was $220,400, a drop of 11.5 percent from the sales price a year ago.

And the National Association of Realtors said existing home sales fell 8.6 percent to an annual rate of 4.49 million in November from a downwardly revised pace of 4.91 million in October. That was more than analysts expected.
Still, while the readings show further weakness, investors have likely already priced in very low expectations. The concern, however, is that the current quarter will be much worse.
Trading volume was light, and is expected to remain so the rest of this week. Analysts are mindful that light volume tends to skew the market's movements as major indexes spent the morning higher before heading lower by midday.

"Don't read too much into the numbers until the end of the day, we're really in a holding pattern right now," said Ryan Larson, head of equity trading at Voyageur Asset Management. "It is a very quiet news week, and much of it has already been priced into the market."

In late afternoon trading, the Dow Jones industrial average fell 95.58, or 1.12 percent, to 8,424.19.
Broader indexes also declined. The Standard & Poor's 500 index shed 9.98, or 1.14 percent, to 861.65. The Nasdaq composite index fell 19.11, or 1.25 percent, to 1,513.24. The Russell 2000 index of smaller companies fell 8.44, or 1.78 percent, to 466.63.
Declining issues led advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 637.3 million shares.
Government bond prices edged higher, pushing yields lower. The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 2.16 percent. The yield on the three-month T-bill, considered one of the safest investments, was unchanged at 0.02 percent from late Monday.

In corporate news, greeting-card company American Greetings Corp. said it swung to a third-quarter loss, hurt by hefty charges and a decline in sales. Shares fell $3.46, or 35 percent, to $6.36.
Credit card lender American Express Co. and commercial financial firm CIT Group Inc. said Tuesday they each received preliminary approval to obtain billions in funding from the government's $700 billion bank investment program.

American Express fell 42 cents, or 2.3 percent, to $18, and CIT Group rose 28 cents, or 6.7 percent, to $4.46.
PNC Financial Services Group Inc. and National City Corp. shareholders approved PNC's acquisition of the Cleveland-based bank. The deal is expected to be complete by late 2009.
Shares of PNC rose 38 cents to $43.06, while National City rose 5 cents, or 3.1 percent, to $1.66 in its last day of trading.
The dollar was mixed against other major currencies, while gold prices fell.
Oil prices fell on concerns that energy demand is evaporating in the face of a severe global economic slowdown. Light, sweet crude fell 78 cents to $39.13 a barrel on the New York Mercantile Exchange, after dipping below $38 earlier in the day.


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