U.S. Stocks Retreat

U.S. stocks fell, capping the first three-day drop since November, as consumer spending slumped for a sixth straight month and companies from Mattel Inc. to Rockwell Automation Inc. posted lower-than-estimated profit.
TradingEconomics.com, Bloomberg 2/2/2009 1:18:34 PM

Mattel, the world’s biggest toymaker, lost 16 percent and Rockwell, the largest maker of factory automation equipment, slid 11 percent. Walt Disney Co. declined 2.3 percent after the Commerce Department reported that consumer spending decreased a greater-than-estimated 1 percent in December. Microsoft Corp. and Humana Inc. helped lead gains in technology and health-care companies, limiting he market’s retreat.

The Standard & Poor’s 500 Index declined less than 0.1 percent to 825.43. The Dow Jones Industrial Average lost 64.11 points, or 0.8 percent, to 7,936.75. The MSCI World Index slipped 1 percent after posting an 8.9 percent drop in January. Treasuries rose and the dollar fell versus the euro and yen.

Benchmark indexes rose from their lows of the day in early trading after the Institute for Supply Management’s manufacturing index contracted at a slower-than-estimated pace in January. The gauge increased to 35.6, above the 32.5 forecast by economists in a Bloomberg survey. Fifty is the dividing line between growth and contraction.

The S&P 500, the Dow and the MSCI World posted their worst January losses on record as more companies reported disappointing earnings and the U.S. economy shrank at the fastest pace in 26 years. President Barack Obama said in an interview with NBC yesterday that the U.S. is in for a tough several months” before a recovery takes hold.

Europe’s Dow Jones Stoxx 600 Index lost 2.6 percent today, extending its 3.6 percent decline in January. Germany’s DAX dropped 1.6 percent, while the U.K.’s FTSE 100 declined 1.7 percent. The Hang Seng Index dropped 3.1 percent.