Stocks fall for third day as dollar continues its rise

NEW YORK (AP) | Investors can’t shake their fears that the economy isn’t keeping up with the stock market.

Stocks fell for a third straight day Friday as a disappointing outlook from computer maker Dell Inc. suggested that an economic recovery could be uneven. The major indexes had moderate losses, leaving the Dow Jones industrials with a slim 0.5 percent weekly gain while broader indexes slid.

The market is back to worrying about the economy. Demand for safe haven investments like Treasuries and the dollar rose for a second day in response to Dell’s outlook and comments from European Central Bank President Jean-Claude Trichet, who said the ECB plans to start reining in some of its stimulus programs. A rising dollar also hit commodities producers and exporters.

The week’s trading saw investors, who have been pumping money into stocks because record-low interest rates mean paltry returns for the dollar and Treasuries, change that strategy. Many are questioning whether the massive stock rally this year really has been justified given the soft spots in the economy, and so they’ve been quick to retreat to safe harbors like government debt and the greenback.

The yield on the three-month T-bill, which moves opposite its price, was flat at 0.02 percent, compared with late Thursday. Yields briefly turned negative Thursday as investors seeking to pad their portfolios with safe investments before the end of the year were willing to accept negative returns.

“Investors seem to need a constant reassurance with where we are in the economic recovery,” said Brett D’Arcy, chief investment officer at CBIZ Wealth Management Group in San Diego.

Instead, investors got the type of downcast news from Dell that suggests a recovery could be uneven. The company said sales of its computers to big businesses remain sluggish. Its quarterly revenue and profit missed analysts’ expectations.

The Dow slipped 14.28, or 0.1 percent, to 10,318.16. The Dow fell 119 points, or 1.1 percent, in the final three days of the week. It ended the week up 0.5 percent because of steep gains Monday after an improvement in retail sales.

The broader Standard & Poor’s 500 Index fell 3.52, or 0.3 percent, to 1,091.38, while the Nasdaq Composite Index, dominated by tech stocks like Dell, fell 10.78, or 0.5 percent, to 2,146.04.

For the week, the S&P; 500 Index fell 0.2 percent and the Nasdaq lost 1 percent. For November, those indexes are each up about 5 percent, while the Dow is up about 6 percent.

The ICE Futures U.S. dollar index, which measures the dollar against other major currencies, rose 0.4 percent. The stronger dollar can hurt commodities prices and sales of U.S. exporters, whose goods become more expensive overseas when the dollar rises.

Demand for longer-term Treasuries fell, pushing yields higher. The yield on the benchmark 10-year note rose to 3.37 percent from 3.34 percent.

Energy companies logged some of the biggest drops as crude oil fell 74 cents to settle at $76.72 per barrel on the New York Mercantile Exchange as the dollar rose. Gold rose.