- The Washington Times - Wednesday, April 15, 2009

Stocks fell Tuesday on Wall Street after the Commerce Department reported that March retail sales dropped 1.1 percent, after two months of gains.

The Dow Jones Industrial Average closed at 7,920.18, down 137.63. The broader Standard & Poor's 500 Index closed down 17.23, at 841.50, and the Nasdaq Composite Index closed at 1,625.72, down 27.59.

Goldman Sachs Group Inc.'s better-than-anticipated earnings report Monday night failed to boost investor confidence. The Wall Street-based investment bank reported $1.81 billion in profits and said it would issue $5 billion in stock to help repay the $10 billion Treasury Department loan it received last year.

The company's stock fell $15.04, or 11.6 percent, to $115.11 a share Tuesday.

“Stocks are about fundamentals, relative to expectations,” said Tobias M. Levkovich, a managing director and chief U.S. equity strategist for Citi Investment Research. “In this case, some expectations were that [fundamentals] would be somewhat better.”

A midday speech by President Obama also failed to turn around losses in early trading. Though the president said “hard times” were not over and spread the blame for the economic recession from Wall Street to overzealous homebuyers to Capitol Hill, he also said the economy was showing “signs of economic progress.”

Mr. Levkovich said he agrees with Mr. Obama because economic bubbles are created because everybody buys into the concept. “Whoever thought zero [money] down for a mortgage was a good idea?” he asked.

Johnson & Johnson on Tuesday was among the first major companies in nonbanking industries to report better-than-expected earnings. The health care products company reported first-quarter profits of $3.5 billion. Company stock rose 22 cents to $51.37.

Intel Corp. and General Electric Co. are among the other major companies from nonbanking industries expected to announce earnings reports later this week.

The Commerce Department also reported $344.4 billion in retail sales last month, 9.4 percent less than in March 2008. Sales for the first three months of this year were down 8.8 percent, compared with the same period a year ago.

Among the biggest sale drops in March, compared with March 2008, was at U.S. gasoline stations, where sales were down 34 percent. Auto and parts dealers reported a 23.5 percent drop in sales.

Also Tuesday morning, the Labor Department reported that the Producer Price Index for finished foods dropped 1.2 percent in March, seasonally adjusted. The decline, which indicates inflation is holding steady, was followed by a 0.1 percent advance in February and a 0.8 percent increase in January.

The report by Goldman Sachs is the second from a major bank in two weeks to exceed investor expectations. Wells Fargo, the second-biggest U.S. home lender, last week forecast a record $3 billion profit for the first quarter, which helped U.S. markets post gains for the fifth straight week.

JPMorgan Chase & Co. and Citigroup are among the major financial companies also scheduled to release earnings reports Thursday and Friday, respectively. Financial companies were among the first and hardest hit in the global recession but have contributed to the five-week rally..

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