Tuesday, September 9, 2008

NEW YORK (AP) — Wall Street edged lower Tuesday as investors awaited readings on pending home sales and wholesale trade and as oil prices extended their decline.

The moderate moves comes a day after most stocks jumped on the announcement of the government’s plan to take over mortgage giants Fannie Mae and Freddie Mac. Investors had been worried that the companies, which hold or back about half the nation’s mortgage debt, would succumb to a spike in bad loans. The government’s move helped shore up confidence in sectors like financials and home builders.

As investors look to where to take stocks next, Wall Street will be awaiting a reading due shortly after the opening bell from the National Association of Realtors on pending home sales. Investors are eager for insights into the troubled market and any signals that it is bottoming. Meanwhile, the Commerce Department is scheduled to release its monthly wholesale trade report.

Overseas debt drives bailout of Fannie, Freddie

At the open, the Dow Jones industrial average fell 35.18, or 0.31 percent, to 11,475.56.

Broader indexes were also moderately lower. The Standard & Poor’s 500 index shed 7.21, or 0.57 percent, to 1,260.58; the Nasdaq composite fell 5.45, or 0.24 percent, to 2,264.31.

The Dow jumped 2.6 percent Monday while the S&P 500 rose 2.1 percent and the technology-heavy Nasdaq composite index added 0.62 percent.

Bond prices rose early Tuesday. The yield on the benchmark 10-year Treasury note fell to 3.67 percent from 3.68 percent late Monday. The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell $2.51 to $103.83 on the New York Mercantile Exchange. Prices fell as investors placed bets that a weakening Hurricane Ike might not affect drilling and refining operations in the Gulf of Mexico. Investors will also be awaiting a decision today on production from OPEC, which meets Tuesday in Vienna.

In corporate news, McDonald’s Corp. said its same-store sales, or sales at stores open at least 13 months, rose 4.5 percent in the U.S. in August and 8.5 percent globally. Shares rose $1.02 to $63.38. The Russell 2000 index of smaller companies fell 2.86, or 0.39 percent, to 730.00.

Overseas, Japan’s Nikkei stock average fell 1.17 percent. In afternoon trading, Britain’s FTSE 100 rose 0.47 percent, Germany’s DAX index added 0.20 percent, and France’s CAC-40 fell 0.18 percent.

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