NEW YORK – Wall Street teetered near its lowest levels in three months, helped along by news that Hewlett-Packard was scaling back its 2009 forecast. The Dow Jones industrial average has been dangerously close to its late November lows after tumbling 300 points Tuesday.
Dan Cook, senior market analyst at IG Markets in Chicago, says traders are nervous that stocks could tumble if the market moves well below the Nov. 20 closing low of 7,552. The Dow traded below that psychological barrier on Thursday. A finish below that mark would give the Dow its lowest close since March 12, 2003.
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At its low of the session, the Dow was only 30 points above its Nov. 21 trading low of 7,449.
“It’s kind of like if we’re walking across a frozen pond. If that ice starts to crack a bit we’re going to be very wary,” he said. “It’d probably be a sign that we’d see a continued slide.”
The news of the day didn’t offer much support. Hewlett-Packard Co. fell 8 percent after the computer and printer company turned in disappointing fourth-quarter sales, hurt by tightening spending at many businesses.
Even the bright spots weren’t enough to lift the market. Sprint Nextel Corp., the nation’s third-largest wireless carrier, rose 19 percent after its fourth-quarter results came in better than forecast. And Whole Foods Market Inc. jumped 37 percent Thursday after earnings from the natural and organic grocer topped expectations.
In late afternoon trading, the Dow Jones industrial average fell 54.56, or 0.7 percent, to 7,501.07.
Broader stock indicators also slid. The Standard & Poor’s 500 index fell 4.95, or 0.6 percent, to 783.47. The technology-heavy Nasdaq composite index fell 16.09, or 1.1 percent, to 1,451.88.
The Russell 2000 index of smaller companies fell 2.08, or 0.5 percent, to 421.10.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 945.2 million shares.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite to its price, rose to 2.86 percent from 2.75 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.31 percent from 0.30 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose $3.34 to $37.96 per barrel on the New York Mercantile Exchange.
“It is really a bit of a seesaw,” said Mike Materasso, senior vice president and fixed income portfolio manager at Franklin Templeton in New York, referring to the flow of news and the reaction in the markets.
“I think that we continue to get, from a global perspective, more negative news,” he said. “On the other hand, there is cautious optimism in terms of the administration putting forth financial packages that will help the economy, help home owners.”
Stocks showed little reaction Wednesday to a $275 billion mortgage relief plan President Barack Obama introduced that would provide incentives to mortgage lenders to help borrowers reduce their payments. It came a day after Obama signed into law a $787 billion economic stimulus plan.
News on the economic front was mixed, providing little guidance for a restless market.
An index of leading economic indicators logged a surprise increase in January, the second straight monthly gain, but the Philadelphia Federal Reserve said conditions in the region’s manufacturing sector weakened in February. Also, a reading on wholesale prices, the Producer Price Index, jumped more than expected in January, the first increase in six months.
Technology and financial stocks weighed on the market. H-P fell $2.73, or 8 percent, to $31.35 after its fourth-quarter sales fell short of Wall Street’s expectations and it reduced its forecast.
Bank of America Corp. fell 55 cents, or 12 percent, to $4.02 as investors worried about the prospects for financial companies.
Some investors turned to consumer staples stocks after drugstore operator CVC Caremark Corp. posted a better-than-expected 17 percent increase in earnings for the final three months of 2008. CVS rose $1.67, or 6.2 percent, to $28.66.
Sprint rose 52 cents, or 19.4 percent, to $3.24, while Whole Foods rose $3.46, or 37.2 percent, to $12.75.
Overseas, Japan’s Nikkei stock average rose 0.3 percent. Britain’s FTSE 100 rose 0.3 percent, Germany’s DAX index rose 0.2 percent, and France’s CAC-40 fell 0.1 percent.
