Stocks droop again on concern slump will harm earnings
NEW YORK — Stocks fell Monday after drifting between gains and losses before the presidential election, on the worst contraction in manufacturing since 1982 and forecasts that the sagging economy will reduce profits.
Halliburton Co., the second-biggest U.S. oilfield services provider, led a retreat in 35 of 40 energy companies in the Standard & Poor’s 500 index after Goldman Sachs Group Inc. cut the shares to "neutral" and oil slid almost $4 a barrel. Walt Disney Co. lost 3.4 percent after Merrill Lynch & Co. said the economic slowdown will hurt theme-park and television income. AT&T Inc. jumped 3.9 percent after Wachovia Corp. said its valuation is "compelling."
"Investors are all looking for safe spaces," said Robert Lutts, president of Cabot Money Management in Boston, which oversees $400 million. "It’s been harder than usual for investors to find those safe areas."
The S&P 500 lost 2.45 points, or 0.3 percent, to 966.3. The Dow Jones industrial average slipped 5.18 points to 9,319.83. The Nasdaq composite index increased 5.38, or 0.3 percent, 1,726.33.
The S&P 500 retreated a day after posting its first back-to-back gains in more than a month.
Halliburton fell 7.2 percent to $18.36, leading a 2 percent decline in S&P 500 energy companies. The oilfield-services provider was cut to "neutral" from "buy" at Goldman.
Crude oil fell 5.8 percent to $63.91 after the Institute for Supply Management said manufacturing in the U.S. contracted last month at the fastest pace in 26 years loan till payday.
Disney lost 87 cents to $25.04. Merrill cut its share-price estimate for the world’s largest theme-park operator by 11 percent to $24.
General Motors Corp. fell 14 cents to $5.65. The largest U.S. automaker said sales of cars and light trucks tumbled 45 percent last month, which the company called the worst month since World War II.
The London interbank offered rate, or Libor, that banks charge for three-month loans in dollars, dropped 17 basis points to 2.86 percent, the lowest level since the collapse of Lehman Brothers Holdings Inc. on Sept. 15. The rate has declined for 16 straight days.
S&P 500 companies are on pace for their fifth straight quarter of declining profits. Earnings are down 9 percent for the 341 companies that have reported third-quarter results so far.
AT&T climbed 3.9 percent to $27.81 for the biggest gain in the Dow average. Verizon Communications Inc. added 3.6 percent to $30.75.
Hartford Financial Services Group Inc. jumped $5.96, or 58 percent, to $16.28 for the biggest advance in the S&P 500 after saying it has enough capital to withstand further market declines.
Nordstrom Inc. fell 9.2 percent to $16.38. Goldman Sachs Group Inc. lowered earnings estimates. Goldman Sachs fell 3.7 percent to $89.09.
Office Depot Inc. slid the most in the S&P 500, losing 20 percent to $2.88.