Dow below 11,000 for 1st time since March - East Valley Tribune: News

Dow below 11,000 for 1st time since March

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Posted: Wednesday, June 7, 2006 3:07 pm | Updated: 2:30 pm, Fri Oct 7, 2011.

NEW YORK - Stocks dropped Wednesday, extending investors' losses for the third straight session and pushing the Dow Jones industrial average below 11,000 for the first time since March 9.

The Dow has lost more than 316 points this week; the selloff has also wiped out the Nasdaq composite index's gains for the year and put the Standard & Poor's 500 index less than 8 points away from its Dec. 31 close.

With little economic data or corporate news to move stocks, traders were left to decide whether the week's tumble was a buying opportunity or a harbinger of worse days ahead. Stocks spent most the day higher, but the advance-decline line was narrow and the market turned negative in late afternoon.

Volume was light, as it has been all week, which some investors say is a sign of more losses to come.

"When we have big down days on big volume, that's a sign of capitulation," said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati. "Monday and Tuesday, we saw selling, but it wasn't the type of volume we like to see for short term-buying opportunities.... All the sellers aren't out of this market yet."

The Dow Jones industrial average fell 71.24, or 0.65 percent, to 10,930.90.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 7.70, or 0.61 percent, to 1,256.15, and the Nasdaq composite index fell 10.98, or 0.51 percent, to 2,151.80.

Declining issues led advancers by roughly 9 to 7 on the New York Stock Exchange.

European markets closed higher after their Tuesday swoon, but Asian stocks continued to tremble. The Shanghai Composite Index dropped 5.36 percent, its biggest fall in more than four years, on fears that new share issues may outstrip demand. Japan's Nikkei stock average fell to its lowest close in six months on concerns over U.S. interest rates and the arrest this week of a high-profile fund manager.

Treasury bonds fell, with the yield on the 10-year Treasury note rising to 5.02 percent from 5.01 percent late Tuesday. The U.S. dollar was up against other major currencies.

Oil prices fell substantially, giving the market its early-session boost. A barrel of light crude settled at $70.82, down $1.68, on the New York Mercantile Exchange.

Equity investors, consumed with worry over the Federal Reserve's interest rate policy, have sent stocks on a roller-coaster ride over the last four weeks, driving them down from near record highs, then building them up again.

"We're in one of these data-driven revolving door kind of periods," said Philip S. Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis. "We're going to get some more volatility before we get on a clearer path to what really is neutral at the Fed."

In corporate news, drug maker Pfizer Inc. rose 7 cents to $23.91 after The New York Times reported that it received bids worth more than $14 billion for its consumer products business, which includes brands such as Listerine mouthwash and Lubriderm skin lotion. The bidders included Glaxo SmithKline PLC, Johnson & Johnson and Reckitt Benckiser PLC, the British company that makes Lysol, Woolite and other household cleaning products.

Glaxo SmithKline rose 51 cents to $56 and Johnson & Johnson rose 23 cents to $61.17.

Chemical companies dropped following a Deutsche Bank downgrade of six names in the sector, including Dow Chemical Co., which fell 50 cents to $39.08. El DuPont de Nemours & Co., which was also downgraded, fell $1.08 to $41.09.

Shares of furniture maker La-Z-Boy Inc. fell $1.84, or 13 percent, to $12.25 after the company swung to a fourth quarter loss and issued a first-quarter outlook that fell below Wall Street expectations. Raymond James downgraded the company to "outperform" from "strong buy."

Boston Scientific Corp. fell 31 cents to $20.22 after reports that Guidant Corp., the troubled defibrillator company it acquired in April, drafted a warning letter to doctors about a dangerous electrical malfunction in some of its devices, but did not send it.

Preliminary consolidated volume on the New York Stock Exchange was 2.68 billion, down from 2.75 billion the previous session.

The Russell 2000 index of smaller companies was down 4.18 points, or 0.59 percent, to 706.78.

Overseas, Japan's Nikkei stock average fell 1.88 percent. Britain's FTSE 100 rose 0.64 percent, Germany's DAX index gained 0.75 percent, and France's CAC-40 gained 0.56 percent.

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