- The Washington Times - Wednesday, November 30, 2005

NEW YORK (AP) — Strong growth in the nation’s gross domestic product spooked investors and sent stocks mostly lower yesterday as the data renewed fears that the Federal Reserve would continue raising interest rates. Despite the drop, the market ended November with impressive gains.

Wall Street endured a third day of flat-to-lower trading despite a recent string of government reports that have painted an uplifting picture of the economy. The Commerce Department said the GDP rose at a 4.3 percent annual rate in the July-September quarter, which reinforced the economy’s ability to handle record energy prices after Hurricanes Katrina and Rita.

While the Fed has signaled it might stop rate increases if the economy weakens, the strong economic data is likely to prompt more rate increases, giving the markets pause after reaching 4-year highs last week. But analysts said there is still room for stocks to advance.

“We’ve had a great four- to six-week run, and now the economic data has been far better than expected,” said Jack Caffrey, equity strategist for JPMorgan Private Bank. “So at this point, seeing the market consolidate here makes perfect sense.”

The Dow Jones Industrial Average fell 82.29, or 0.76 percent, to 10,805.87.

Broader stock indicators were mixed. The Standard & Poor’s 500 Index lost 8, or 0.64 percent, to 1,249.48, and the Nasdaq Composite Index rose 0.11, nearly flat, to 2,232.82.

Bonds continued to slip after Monday’s sell-off, with the yield on the 10-year Treasury note rising to 4.50 percent from 4.48 percent late Monday. The dollar was mixed against major currencies, while gold prices fell.

Crude futures moved higher after dropping to new five-month lows earlier in the session. A barrel of light crude settled at $57.32, up 82 cents, on the New York Mercantile Exchange.

With crude oil futures off of their summer highs and economic data improving, Wall Street enjoyed stellar gains in November. For the month, the Dow gained 3.5 percent, the S&P; rose 3.52 percent and the Nasdaq surged 5.31 percent.

With a month to go, the market is still well positioned to end the year in positive territory. For the year to date, the Dow is up 0.21 percent, the S&P; has gained 3.1 percent, and the Nasdaq has risen 2.64 percent.

Despite a general lift in technology stocks, which propped up the Nasdaq, Blackberry pager maker Research in Motion Ltd. tumbled $3.79, or 5.8 percent, to $61.13 after a Virginia judge threw out the company’s proposed patent settlement with NTP Inc.

Smithfield Foods Inc., the world’s largest pork processor, said its second-quarter profit fell 12 percent, but matched analysts’ target before restructuring charges. Smithfield fell 76 cents to $29.23.

Genworth Financial Inc. gained 45 cents to $34.45 on news that its stock will be added to the S&P; 500 today, replacing troubled energy merchant Calpine Corp., whose stockfell 57 percent Tuesday after it announced its two top officers were leaving the company.

Calpine fell 3 cents to 51 cents per share.

Declining issues outnumbered advancers by about 7 to 6 on the New York Stock Exchange, where preliminary consolidated volume came to 2.41 billion shares, compared with the 2.26 billion shares that changed hands Tuesday.

The Russell 2000 Index of smaller companies rose 3.60, or 0.53 percent, to 677.29.

Overseas, Japan’s Nikkei stock average declined 0.37 percent. In Europe, Britain’s FTSE 100 lost 1.23 percent, France’s CAC-40 was lower by 0.46 percent for the session, and Germany’s DAX Index fell 0.12 percent in late trading.

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