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September 17, 2012

Major indexes slip; Apple on target for new high

From The Associated Press

NEW YORK — U.S. stocks are slipping in late trading Monday, threatening to break a four-day rally that pushed indexes tantalizingly close to pre-recession highs.

The Dow Jones industrial average was down 46 points to 13,547 with less than hour until trading closes. The Standard & Poor’s 500 fell nearly six points to 1,460. The Nasdaq composite lost 12 points to 3,172.

U.S. stocks are coming off a surge last week that sent the S&P 500 to its highest level in nearly five years. Investors bought stocks on news that the Federal Reserve planned to buy mortgage bonds in an effort to get people to borrow and spend more.

Dampening investor spirits was an Empire State Manufacturing Survey suggested that conditions for New York manufacturers continued to weaken in September.

“We’re not completely out of the woods economically, and that’s weighing on markets,” said Wasif Latif, vice president of equity investments at USAA Investments. He added that, as indexes hover at multi-year highs, “psychological barriers and technical barriers may be tough to breach.”

Apple rose $6.37 to $697.65, on track for a new closing high. The stock market’s most valuable company said that advanced sales for its iPhone 5 available later this week are running at double the level of advanced sales had for the previous version.

Office Depot Inc. rose 17 cents, or nearly 7 percent, to $2.64 after an investment firm pushing for changes at the office-supply chain announced it had become the retailer’s largest shareholder. Office Depot has struggled recently because businesses have cut spending at its stores as the economy has slowed.

Iris International Inc., a maker of medical test products, jumped $6, or 45 percent, to $19.51 after its board agreed to sell the company to Danaher Corp., a health care and industrial manufacturer.

Seven of the ten major industry sectors in the S&P 500 fell, led by materials stocks, down 1.6 percent. Banks and other financial companies were also hit hard, down 1.1 percent.

Energy stocks fell after oil suddenly dropped in the afternoon, leaving traders guessing as to the cause. Benchmark crude fell to $96.62, a loss of $2.38, or 2.4 percent, the biggest fall since late July. Energy stocks regained some of their losses, but are still down about 1 percent.

Stocks have been dropping since the opening bell, following overseas markets lower. In Europe, benchmark indexes fell 0.8 percent in France and 0.9 percent in Italy.

Investors sold partly on signs that setting up a new authority overseeing European banks could take longer than expected following a disappointing meeting of the region’s financial ministers over the weekend.

In the Empire State survey, the general business conditions index slipped five points to minus 10.4, its second consecutive negative reading. The new orders index fell nine points to minus 14.0, its third straight negative reading. Both reached their lowest levels in almost two years.

Also on Monday, China filed a World Trade Organization case challenging U.S. anti-dumping measures on billions of dollars of kitchen appliances, paper and other goods, further straining trade relations as global demand weakens.

Earlier, the Obama administration said it would file its own WTO case this week. It says China improperly subsidizes exports of cars and car parts.

On Tuesday, the National Association of Home Builders releases its survey for September sales. The government follows on Wednesday with data on both housing starts and existing home sales.

 

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