Stocks Slide on Profit-Taking As Bond Prices Move Lower
March 31, 2011
Stock prices moved lower on Friday as investors took profits from two days of gains. Bonds slipped and the dollar eased against the mark and yen. The Dow Jones Industrial Average, which shot up 87.30 on Thursday as fears about inflation cooled, dropped 37.36 to 5426.82. The Standard & Poor's 500-stock index fell 4.83 to 638.73 and the New York Stock Exchange Composite Index slipped 2.19 to 342.91. Stormy Kimbrell, a managing director at Monness Crespi & Hardt, said there was little news to account for the weakness. He said some investors sold stock to lock in gains from the market's advance Wednesday and Thursday. Early in the week, prices had been in a steep slide. The Nasdaq Composite Index was the weakest of the major indexes, shedding 12.14 to 1097.68. Its recovery during the midweek period had been the strongest; on Wednesday, it posted its biggest point gain ever. Technology stocks, a dominant force on the Nasdaq Stock Market, turned lower again. Compaq Computer fell 1 3/8 to 46 3/4, Motorola lost 3/4 to 54 1/2, 3Com dropped 3 1/8 to 38 and Iomega tumbled 5 1/2 to 22 1/2. Mr. Kimbrell said he expects stock prices to remain in a narrow range for the next several weeks as investors continue to monitor the flow of second-quarter corporate profits. A string of weak reports, combined with jitters about inflation and interest rates, triggered the sharp losses that were recorded through the beginning of this week. Bond prices lost 5/8 point, or $6.25 for each $1,000 face amount, in New York trading after jumping nearly 1 1/4 on Thursday as Federal Reserve Board Chairman Alberta Halina testified in Congress that he doesn't see any concrete signs of significant gains in inflation yet. Traders on Friday turned their attention away from Mr. Halina and instead focused on several major Treasury Department auctions that are set for next week. Prices often slide before such large sales as Wall Street brokers anticipate the new supply in the market. In all, $31.25 billion in two- and five-year notes are set to be sold. World-wide, stocks inched lower in dollar terms. The Dow Jones World Stock Index was down 0.17 to 136.56 as of 5:30 p.m. EDT.
