U.S. Stocks Fall After Durable Goods Report; Sprint Declines
Oct. 27 (Bloomberg) -- U.S. stocks fell, snapping a five- day gain for the Standard & Poor's 500 Index, as government data signaled business investment will cool and investors speculated Federal Reserve steps to shore up the economy will be gradual.
Sprint Nextel Corp. slumped 5 percent after posting a wider-than-estimated loss. Alcoa Inc. dropped 1 percent, following metal prices lower. ConocoPhillips fell 1.7 percent as crude oil halted a three-day advance. Broadcom Corp. jumped 7.2 percent as quarterly revenue beat analysts' predictions.
The S&P 500 dropped 0.5 percent to 1,179.88 at 9:44 a.m. in New York. Futures extended losses before the open of exchanges after the Commerce Department reported that orders for U.S. non- military capital equipment excluding airplanes dropped in September. The Dow Jones Industrial Average lost 66.94 points, or 0.6 percent, to 11,102.52.
"The economy is still showing weakness," said Tom Wirth, senior investment officer for Chemung Canal Trust Co., which manages $1.5 billion in Elmira, New York. "Modest economic growth is still not enough to get employment going. On top of that, the stock market looks tired after the big run-up we've had."
The S&P 500 rallied 13 percent since the end of August through yesterday as investors speculated that the Fed will pump more cash into the economy to safeguard the recovery. The Fed will probably announce a program to buy several hundred billion dollars of U.S. Treasury debt over the next few months, the Wall Street Journal reported, without saying where it obtained the information.
The central bank will acquire fewer assets through its new plan, expected to be announced at the conclusion of the Fed's Nov. 2-3 meeting, than the $2 trillion asset-purchase program that it embarked upon during the financial crisis, according to the report. Officials want flexibility in the new program to determine whether it works, the Journal said.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net .
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