Stocks post another triple digit loss

June 27, 2008 1:54:51 PM PDT
Stocks stumbled again as crude futures settled at a new record, capping a difficult week. Investors remain concerned about the troubled economy and the outlook for corporate profits.

The Dow fell nearly 107 points to 11,346. It declined 4.2 percent this week.

The S&P 500 dropped 4 points to 1,278, with a 3 percent drop this week.

The Nasdaq composite lost 5 points to 2,315, down 3.8 percent on the week.

Declining issues outnumbered advancers by a 5-to-3 margin.

NYSE volume topped 4.9 billion shares. Nasdaq volume was more than 3.1 billion shares.

Crude settled with a gain of 57 cents at a record $140.21 a barrel.

AP-NY-06-27-08 1616EDT The Commerce Department said spending rose 0.8 percent in May, as taxpayers started receiving their stimulus checks. The increase was higher than the 0.7 percent economists predicted. The report also said personal incomes surged 1.9 percent - significantly more than anticipated. After taxes, incomes surged 5.7 percent, the largest amount in 33 years.

The data appeared to provide a bit of solace to investors nervous about consumers struggling with rising prices, falling home values and the shaky job market. Consumer spending accounts for more than two-thirds of economic activity.

Shortly after the beginning of trading, the University of Michigan's June index of consumer sentiment came in at 56.4, a bit lower than its reading in May and slightly below the average analyst estimate.

With many commodities on a seemingly unstoppable incline, Wall Street remains concerned that they will slam consumers with not only elevated costs for energy and food, but also for other goods if cash-strapped companies decide to pass along the rising costs. Early Friday, light, sweet crude was up more than $1 above $141 a barrel on the New York Mercantile Exchange, after briefly surpassing $142 in pre-market trading.

Corn and soybean prices have also been hitting new all-time highs.

On Thursday, the Dow Jones industrial average gave up nearly 360 points and fell to its lowest level since September 2006 on a combination of worries about oil prices and the financial, automotive and technology sectors. General Motors Corp. shares dropped to their lowest level in more than three decades.

On Friday, a Lehman Brothers analyst lifted his prediction of how much Merrill Lynch & Co. will have to mark down the value of its assets in the second quarter. His write-down estimate rose to $5.4 billion from $3 billion. On Thursday, a Goldman Sachs analyst forecast a $4.2 billion write-down at Merrill and a nearly $9 billion write-down at Citigroup Inc.

Keeping investors nervous about the tech sector, Palm Inc. posted a worse-than-expected quarterly loss after the market closed Thursday. The smart phone maker said sales of Treo phones were slowing.

Overseas, Japan's Nikkei stock average fell 2.01 percent after Wall Street's tumble. In midday trading, Britain's FTSE 100 fell 0.30 percent, Germany's DAX index fell 0.47 percent, and France's CAC-40 lost 0.66 percent.

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