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3 week rally Original Source Link: (May no longer be active)
http://story.news.yahoo.com/news?tmpl=story2&cid=568&ncid=749&e=1&u=/nm/20021028/bs_nm/markets_stocks_dchttp://story.news.yahoo.com/news?tmpl=story2&cid=568&ncid=749&e=1&u=/nm/20021028/bs_nm/markets_stocks_dc
Stocks Slip, End 3-Week Rally
Mon Oct 28, 4:49 PM ET
By Chelsea Emery
NEW YORK (Reuters) - Stocks slumped on Monday, pulling back from a three-week rally, as investors worried this week's economic data could signal U.S. growth remains weak.
The broad Standard & Poor's 500 index rose 11 percent in the past three weeks through Friday's close as surprisingly strong quarterly earnings pulled the index off five-year lows. But analysts caution profit results are largely built into stock prices and say Tuesday's consumer confidence data will likely show that people are less confident about the economy.
"The news about earnings was better than anticipated, but we've received most of the benefit from that. People are focusing on economic numbers due out this week," said Eric Barden, a fund manager for Texas Capital Value Funds. "They're afraid of what those numbers could do to the market."
Data scheduled for this week include advanced gross domestic product (GDP (news - web sites)) for the third quarter, October unemployment statistics, and the Conference Board (news - web sites)'s consumer confidence reading. The latter is particularly important to investors since consumer spending underpins about two-thirds of the nation's economy.
The Dow Jones industrial average (^DJI - news) dropped 75.95 points, or 0.90 percent, to 8,368.04, according to the latest available figures. The broader Standard & Poor's 500 Index (^SPX - news) slipped 7.42 points, or 0.83 percent, to 890.23. The technology-laced Nasdaq Composite Index (^IXIC - news) dropped 15.26 points, or 1.15 percent, to 1,315.87.
All three market gauges racked up their third-straight winning week on Friday, giving them the longest weekly stretch of gains since August. But traders said investors were locking in profits on worries about this week's economic data.
In addition, the market's mood was colored by a report in The Washington Post saying the U.S. Federal Reserve (news - web sites) is worried the economy could be vulnerable to a shock such as a war in Iraq and may cut interest rates in the next few months.
"It's a sign that the economy is weaker than they anticipated," said Andrew Baker, a senior Nasdaq trader for Wedbush Morgan.
Declining stocks outpaced gainers, with nine stocks falling for every seven that rose on the New York Stock Exchange (news - web sites) and 17 stocks down for every 15 that gained on Nasdaq. Trading volume was active, with more than 1.38 billion shares changing hands on the Big Board and more than 1.63 billion on Nasdaq.
The market is wrapping up its third-quarter earnings season, when a majority of companies post quarterly results. As of Monday, 73 percent of the companies in the S&P 500 had reported results, and 59 percent of those had topped Wall Street's expectations, said market research firm Thomson First Call.
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