Reports on manufacturing, housing weigh on stocks

Reports on manufacturing

By JERUSALEM POST STAFF
SHARES WALL STREET Investor confidence suffered another blow Friday as disappointing reports on manufacturing and home sales stirred worries that the American economy will struggle to recover. Stocks fell for a third straight day to post their biggest weekly losses since early July. The reports on durable goods and sales of new homes reminded investors that while the US economy might be improving, it might not do so in a straight line. The Dow Jones industrial average fell 42 points, bringing its three-day loss to 165. Durable goods orders, a key indicator for the manufacturing industry, fell unexpectedly in August. The US Commerce Department said orders for goods expected to last at least three years slid 2.4 percent, after rising 4.8% in July. Economists polled by Thomson Reuters had forecast an increase of 0.5%. It was the second drop in three months and the latest sign that any rebound inside the nation's factories is likely to be slow. Meanwhile, the American government also reported that new home sales inched up to 429,000 last month, below analysts' expectations. The tepid improvement followed four months of stronger gains in new home sales that had raised investors' hopes that the troubled housing market was improving. The market was already starting sour on housing, and had fallen on Thursday following a separate report showing a surprise drop in existing home sales in August. Technology shares fell Friday after quarterly results from BlackBerry maker Research In Motion Ltd. fell short of expectations. That weighed on Nasdaq composite index, which contains a big pool of tech stocks. The day's losses - and even those for the week - are still modest considering how far stocks have rocketed since major indicators tumbled to 12-year lows on March 9. The Standard & Poor's 500 index, the basis for many mutual funds, is up 54.4% since then. On Friday, the Dow fell 42.25, or 0.4%, to 9,665.19. The broader Standard & Poor's 500 index fell 6.40, or 0.6%, to 1,044.38, and the Nasdaq fell 16.69, or 0.8%, to 2,090.92. For the week, the Dow lost 1.6%. It was the biggest slide since the week of July 10 and only the third losing week of the last 11. The S&P 500 index slid 2.2% for the week, while the Nasdaq fell 2%. EUROPE Germany's DAX closed down 0.4% to 5,581.41 and France's CAC 40 sank 0.5% to 3,739.14. Britain's FTSE 100 rose 0.1% to 5,082.20, pushed higher by energy and commodity stocks that were boosted by gains in oil prices after a two-day plunge. ASIA In Japan, the Nikkei 225 stock index shed 2.6% to 10,265.98 after Nomura, the country's leading brokerage, announced its biggest shares sale ever, weighing on the broader market. Hong Kong's Hang Seng lost 0.1% to 21,024.40, and China's Shanghai index dropped 0.5%. South Korea's Kospi shed 0.1%, India's Sensex edged lower by 0.1% and Indonesia's index lost 1.0%. Taiwan and Australia's markets were up 0.3%. CURRENCIES The dollar traded mixed Friday, falling to a seven-month low versus the yen, caught in crosscurrents of statements of support from Treasury Secretary Timothy Geithner at the Group of 20 summit and comments on continuing stimulus spending across the world. The 16-nation euro edged up to $1.4665 in late New York trading from $1.4654 late Thursday. On Wednesday, the euro peaked at $1.4842, its highest level in 12 months. The pound fell to $1.5938 in late trading from $1.6063 Thursday, hitting its lowest point since mid-June after statements earlier this week from Bank of England officials who talked of the likelihood of bumps on the road to recovery and the usefulness of a weak currency. Meanwhile, the dollar tumbled to 89.90 Japanese yen from 91.27 yen, sinking as low as 89.40 yen, its weakest point since February. In other trading in New York, the dollar edged up to 1.0922 Canadian dollars from 1.0903 late Thursday, and dipped to 1.0299 Swiss francs from 1.0303 francs. COMMODITIES Gold for December delivery lost $7.30 to $991.60 an ounce on the New York Mercantile Exchange, finishing the week down 1.9%. It was the second day in a row that gold closed below $1,000 after a nine-day streak of closing above that level. Oil prices rose for the first time in two days as tensions escalated over Iran's nuclear ambitions. Light, sweet crude for November delivery added 13 cents to finish at $66.02 a barrel.