Making News

(Feb. 09, 2006)

DOW CLOSES AT 10,750; NASDAQ CLOSES AT 2,245

Reason: A Weakening in the Commodities Market

Spiraling oil prices and weakness in other commodities sent stocks plummeting on Tuesday, while investors took profits and beat up the stocks that led Wall Street's early January rally.

Investors sold off oil-sector stocks after oil futures dipped past $2 a barrel, but they didn't move their money into financial or semiconductor stocks, as they did the last time oil dropped, said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds.

The Dow Jones industrial average fell 48.51, or 0.45 percent, to 10,749.76. Broader stock indicators were also lower. The Standard & Poor's 500 index slipped 10.24, or 0.81 percent, to 1,254.78, and the NASDAQ composite index dipped 13.84, or 0.61 percent, to 2,244.96. Bonds fell, with the yield on the 10-year Treasury note elevating to 4.57 percent, up from 4.54 percent Monday afternoon. The U.S. dollar was mixed against other major currencies in European trading. Gold prices declined.

Crude oil futures fell due to mild U.S. weather, petroleum inventories remained strong and fears subsided over possible disruptions to Iranian oil. A barrel of light crude oil closed at $63.09, down $2.02, in trading on the New York Mercantile Exchange.

Google Inc. reiterated the market's "here today, gone tomorrow" mentality. The stock fell $17.18, or 4.5 percent, to $367.92, as poor sentiment around the stock carried over from its Feb. 1 earnings report, which came in below analysts' expectations.

Luxury home builder Toll Brothers Inc. fell $1.73, or 5.5 percent, to $29.47 after its first-quarter revenue rose 35 percent to about $1.33 billion, but the company lowered guidance for home deliveries this year, saying it sees softening demand in a number of markets.

Industrial equipment maker Emerson Electric spiked $2.09 to $78.96 after profit for its first-quarter jumped by about one-third, helped by improved sales at its automation, climate-control, and appliance and tool segments. The company also increased its guidance for fiscal 2006.

Spiraling issues led advancers by more than 2 to 1 on the New York Stock Exchange, where consolidated volume was 2.5 billion shares, up from 2.2 billion at the same time Monday.

Overseas, Japan's Nikkei stock average fell 0.16 percent. Britain's FTSE 100 lost 0.44 percent, Germany's DAX index gained 0.11 percent, and France's CAC-40 rose 0.02 percent.

New York Stock Exchange: www.nyse.com

NASDAQ Stock Market: www.nasdaq.com


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