Stocks treaded water into the afternoon, where a sell-off at the end of the day left the markets with modest losses. The Dow Jones Industrial Average dropped 77.79 points (-0.56%), Standard & Poor's 500 index traded 9.96 points lower (-0.65%), and the Nasdaq decreased 0.73 points (-0.03%). Volume on the NYSE was 1.2 billion shares, and decliners took advancers by a ratio of about 5:3.
Much of the selling pressure came with the release of the consumer confidence number, which dropped to 95.6 in October, according to the Conference Board. It was the third straight month the figure dropped, and was simply a lot lower than economists expected. Dow component Proctor & Gamble (-4.0%) reported earnings that beat estimates, but its guidance came in softer than expected (full story). UBS (-0.3%) announced it swung a third-quarter net loss due to subprime related losses (full story). The Wall Street soap opera that involved Merrill Lynch (-2.8%) and embattled CEO Stan O'Neal (full story) looked to come to a close Tuesday, as it was announced he would "retire" and leave the firm immediately. Merrill did not name a permanent replacement, which seemed to irk investors.
Crude prices dropped $3.15 to close at $90.38/barrel. This left the energy sector (-3.0%) hurting at the end of the day, along with materials (-2.2%) and telecom services (-1.3%). Tech (+0.6%) had a strong day off solid performances from the large-caps. Apple (+1.0%) was one of those strong performers, after the company announced it had sold two million copies of its new Leopard operating system which has been out for less than a week (full story).
The GDP (8:30 AM), Construction Spending (10:00 AM), and FOMC Announcement (2:15 PM) are among a deluge of economic news that will bombard traders tomorrow.
Commentary: Fed to Appease Markets With Rate Cut • Stocks Firm in Anticipation of Further Fed Ease
Stocks to watch: PG, MER, UBS, AAPL