NEW YORK (AP) – Caution reasserted itself on Wall Street Friday, sending stocks sharply lower but not enough to prevent the market from notching its third straight weekly advance.
Major market indexes fell about 2 percent, but most analysts agreed that the pullback was a natural response to the market’s powerful climb this month. Financial and technology stocks led the retreat, and energy shares fell along with the price of oil.
A dip in personal incomes and a slowdown in personal spending gave investors reason to cash in some of their winnings after the Dow Jones industrial average surged 21 percent over just 13 days. Analysts said the sentiment in the market was still more upbeat than it was a month ago, but the economic numbers were a reminder that the economy and the banking system remain troubled.
“There is still a definite caution in the air,” said Doreen Mogavero, president of Mogavero, Lee & Co., a New York floor brokerage.
The market has been ratcheting up and down over the past week. Analysts weren’t surprised by its retrenchments, including Friday’s, because no one expects such a weak market to move consistently higher. And many analysts believe back-and-forth trading is actually a healthy way for stocks to recover, because it reflects a conservative rather than euphoric attitude among investors.
Still, it was too early to tell whether the big March advance might go the way of Wall Street’s year-end rally, which was more than wiped out in January and February.
Although the gains of the past three weeks have been based on early signs of improvement in the banking system and the economy, those advances are vulnerable to critical economic data due next week and first-quarter earnings reports that will begin in a few weeks.
According to preliminary calculations, the Dow fell 148.38, or 1.9 percent, to 7,776.18. The index is up 17.3 percent in the last three weeks, its best gain since September 1982 and its longest string of advances since May last year.
The Standard & Poor’s 500 index fell 16.92, or 2 percent, to 815.94, and the Nasdaq composite index dropped 41.80, or 2.6 percent, to 1,545.20.
Send questions/comments to the editors.
Success. Please wait for the page to reload. If the page does not reload within 5 seconds, please refresh the page.
Enter your email and password to access comments.
Hi, to comment on stories you must . This profile is in addition to your subscription and website login.
Already have a commenting profile? .
Invalid username/password.
Please check your email to confirm and complete your registration.
Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.
Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.