Stocks Finish the Week Down as Reports Dull Optimism

Wall Street closed a roller-coaster week in negative territory Friday, as investors locked in profits and concerns rose that a five-month rally had pushed stocks up further than warranted by early signs that the economy is stabilizing.

The losses were broad, dragging down financial and technology shares, but energy stocks lost significant ground as crude oil prices tumbled 4 percent, to $67.51 a barrel, on the New York Mercantile Exchange. Exxon Mobil and ConocoPhillips were down 0.8 percent and 1 percent, respectively.

After a two-day rally lifted the Standard & Poor's 500-stock index to a 10-month high, the index fell 0.9 percent, or 8.64 points, to close at 1004.09. The Dow Jones industrial average, an index of blue-chip stocks, was down 0.8 percent, or 76.79 points, to 9321.40, and the tech-heavy Nasdaq composite index fell 1.2 percent, or 23.83 points, to 1985.52.

That wiped out gains secured just a few days ago and left all of the major indexes in negative territory for the week, breaking a four-week streak of gains. The Dow and S&P were down 0.5 percent and 0.6 percent for the week, respectively. The Nasdaq fell 0.7 percent.

Investors had rallied this week on signs of a stabilizing economy, deriving reassurance from a Federal Reserve move to begin curtailing one of its extensive programs to prop up the economy. But traders have also become concerned that the market rebound might have come too quickly and sprinted ahead of the recovery.

That was reinforced by a report of an unexpected drop in retail sales last month, said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

"Many people have been looking for a pullback, and this week that retail sales data was a potential game changer," he said. "If we are in a recovery mode, it's a very gradual recovery."

Also, traders were disappointed by a decline in consumer confidence as measured by the latest Reuters/University of Michigan index released Friday. The index fell to 63.2 in August from 66 in July. Analysts had expected a rise. link.....