Stocks Slip As Investors Mull Economy

Monday February 4, Stocks Fall After Week of Big Gains; Investors Shrug Off Stronger-Than-Expected Factory Report NEW YORK (AP) -- Wall Street fell Monday as investors, showing their cautious side after the market's best week in four years, cashed in profits while they debated their next move. The session's move lower continued even after a Commerce Department report showed that orders at U.S. factories rose by 2.3 percent in December -- the biggest increase since July. Analysts had been expecting a 2 percent increase after a 1.7 percent gain in November. While stocks showed little reaction to the factory orders report, Wall Street remains eager for any clues about the nation's economic health. Investors are awaiting quarterly earnings results late Monday from names such as media company News Corp. and fast-food chain operator Yum Brands Inc. The readings could help indicate whether Wall Street last week carved the beginnings of a sustainable recovery. Last week, the Dow Jones industrial average jumped 4.39 percent, the Standard & Poor's 500 index gained 3.75 percent, and the Nasdaq composite index advanced 4.87 percent. The Dow and the S&P 500 each showed their steepest gains since March 2003. Given the scope of the week's gains, a pullback Monday wasn't unexpected and perhaps reflected the normal ebb-and-flow of trading. In midmorning trading Monday, the Dow fell 56.25, or 0.44 percent, to 12,686.94. Broader stock indicators also lost ground. The S&P 500 index fell 8.34, or 0.60 percent, to 1,387.08, and the Nasdaq fell 13.36, or 0.55 percent, to 2,400.00. The Dow stands 10 percent below its record close of 14,164.53 from Oct. 9, but has regained almost 10 percent from the 15-month lows it hit in January. The Federal Reserve's second interest-rate cut in about a week helped boost stocks last week. Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.63 percent from 3.60 percent late Friday. The dollar was mixed against other major currencies, while gold prices fell. Light, sweet crude oil fell 17 cents to $88.79 per barrel on the New York Mercantile Exchange. In corporate news, Google Inc. said Sunday that Microsoft Corp.'s $42 billion bid for Yahoo Inc., announced Friday, amounts to an attempt to gain illegal control over the Internet. Google fell $11.30, or 2.2 percent, to $504.60, Microsoft rose 6 cents to $30.51 and Yahoo rose 70 cents, or 2.5 percent, to $29.08. Financial and homebuilder stocks, which helped drive last week's gains, fell. American Express Co., one of the 30 stocks that make up the Dow industrials, fell $1.32, or 2.7 percent, to $48.28 after UBS lowered its rating on the credit card company to "sell," according to Dow Jones Newswires. Other financial stocks lost ground as well and were among the steepest decliners Monday. Lehman Brothers Holdings Inc. fell $1.73, or 2.6 percent, to $64.27, while Citigroup Inc., which like American Express is a Dow component, declined 67 cents, or 2.3 percent, to $29.02. Homebuilders, which in recent months had come off their lows after investors fled housing-related investments, lost ground Monday. Lennar Corp. fell $1.21, or 5.6 percent, to $20.19, while KB Home fell $1.81, or 6.3 percent, to $26.94. Agricultural producer Archer Daniels Midland Co. said Monday its fiscal second-quarter profit rose 7 percent amid increased volumes and selling prices; it just missed Wall Street forecasts. ADM fell $1.55, or 3.4 percent, to $43.95. Wendy's International Inc. fell 78 cents, or 3.1 percent, to $24.40 after reporting its fourth-quarter earnings rose 42 percent amid increased profit margins but missed expectations. Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 205.9 million shares. The Russell 2000 index of smaller companies fell 9.06, or 1.24 percent, to 721.44. Overseas, Japan's Nikkei stock average closed up 2.69 percent, while Hong Kong's Hang Seng index jumped 3.77 percent and China's benchmark but often-volatile Shanghai Composite index jumped 8.13 percent after reports indicated the economic effects from harsh winter storms in China might not have been as bad as feared. In afternoon trading, Britain's FTSE 100 rose 0.04 percent, Germany's DAX index rose 0.69 percent, and France's CAC-40 fell 0.17 percent.