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November ends with further dollar decline { October 2006 } Original Source Link: (May no longer be active)
http://bloomberg.com/apps/news?pid=20601087&sid=aBSqHO1ysAzY&refer=homehttp://bloomberg.com/apps/news?pid=20601087&sid=aBSqHO1ysAzY&refer=home
U.S. Stocks Fall on Dollar Slide, Oil's Gain; Wal-Mart Declines
By Michael Tsang and Nick Baker
Nov. 27 (Bloomberg) -- U.S. stocks fell, sending the Standard & Poor's 500 Index toward its biggest retreat in more than four months, after a decline in the dollar for a fifth day underscored concern that economic growth is faltering.
Wal-Mart Stores Inc., the biggest retailer, led merchants lower after saying monthly sales fell for the first time in 10 years. Nokia Oyj, the largest mobile-phone maker, slipped as a lower U.S. currency cut the value of dollar-denominated sales.
``The weakening dollar can show a potential lack of confidence among foreign investors in the U.S. economy,'' said Chuck Carlson, who oversees $110 million at Horizon Investment Services in Hammond, Indiana. Regarding Wal-Mart, Carlson said: ``If you're a big bellwether having some problems, that causes people to reconsider how strong the consumer is.''
An advance in oil prices also deepened concern that higher energy costs will leave consumers with less to spend as the holiday shopping season gets under way.
The Standard & Poor's 500 Index lost 17.50, or 1.3 percent, to 1383.45 at 2:16 p.m. in New York. The Dow Jones Industrial Average slid 150.37, or 1.2 percent, to 12,129.80. The Nasdaq Composite Index fell 50.23, or 2 percent, to 2410.03.
Both the S&P 500 and the Dow average are heading toward their biggest declines since July 13, while the Nasdaq is poised for its largest drop since June 12.
Prior to today, the S&P 500 had gained 13 percent since reaching its lows for the year in mid-June. Falling oil prices and a streak of quarterly earnings growth above 10 percent that matched the longest since 1950 helped spark the advance.
`Going Against You'
Earnings for companies in the S&P 500 will increase by an average of 9.6 percent this quarter, after climbing 19 percent in the third quarter, according to a survey of analysts by Thomson Financial.
The U.S. Dollar Index, which gauges the dollar's value against a currency basket including the euro, yen, Swiss franc, British pound, Canadian dollar and Swedish krona, declined to 83.25, the lowest since March 2005. The euro also advanced to the highest since March 2005 against the U.S. currency.
``Anything that suggests that economic growth is getting even slower isn't going to be good for stocks,'' said Wayne Reisner, who oversees $1.6 billion at Carret Asset Management in New York. For overseas investors, ``it's not a good thing to be making investments in a currency that's going against you.''
Nine stocks fell for every one that rose on the New York Stock Exchange, the broadest sell-off in more than five months.
Wal-Mart slipped $1.27, or 2.7 percent, to $46.63. The company on Nov. 25 said November sales at U.S. stores open at least a year fell 0.1 percent, lower than the company's forecast of unchanged sales. The merchant marked down toys, electronics, appliances and groceries, while cutting prices on generic drugs.
`More Careful'
``The consumer is being more careful,'' said Caryn Zweig, who helps manage about $700 million at Abner, Herrman & Brock Inc. in Jersey City, New Jersey.
The slowdown at Wal-Mart may ``cast a long shadow over earnings,'' Merrill Lynch & Co. wrote in a note to clients.
Other discount retailers declined on concern cost cuts to lure customers will erode profits in the fourth quarter, when merchants generate a third of their annual profit.
Big Lots Inc., the largest U.S. seller of overstocked and discontinued goods, lost 53 cents to $22.65.
Family Dollar Stores Inc., the owner of more than 6,200 U.S. discount stores, slid 69 cents to $27.74. Dollar General Corp., a discount retailer, dropped 45 cents to $15.85. The company in August withdrew its profit forecast for the rest of the year after competitors lowered prices.
Oil Rises
Nokia declined 67 cents, or 3.2 percent, to $20.26. The Finland-based company, which has an annual meeting with analysts and investors in Amsterdam tomorrow, gets almost all its revenue from outside its home country.
Energy shares retreated even after crude oil futures climbed as much as 1.6 percent to $60.20 a barrel in New York.
Oil prices rose after Saudi Arabia's oil minister said the nation may support a second cut in OPEC's output this year to prop up prices, which have fallen about a quarter since July. Saudi Arabia is the world's largest oil producer.
Exxon Mobil Corp., the biggest energy company, fell 16 cents to $72.22. Chevron Corp., the second-largest U.S. oil company, fell 36 cents to $68.48.
Scottish Re Group Ltd. declined 87 cents, or 13 percent, to $5.76. The Bermuda-based reinsurer said Cerberus Capital Management LP and MassMutual Financial Group agreed to buy 1 million preferred shares that can be converted into a 69 percent stake in Scottish Re at any time. The move would dilute the value of shares held by existing shareholders.
Last Updated: November 27, 2006 14:26 EST
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