another losing day for wall st

Another losing day for Wall St.
Dow closes below 11,000; blue-chip index, Nasdaq on four-session losing streak.
By Grace Wong, CNNMoney.com staff writer
June 7, 2006: 4:09 PM EDT


NEW YORK (CNNMoney.com) - The Dow Jones industrials fell for the fourth straight session Wednesday and closed below 11,000 for the first time since March as concerns about inflation and uncertainty about interest rates continued to hound investors.

The Dow Jones industrial average (down 57.63 to 10,944.51, Charts) tumbled 0.7 percent, according to early tallies. The last time the blue-chip index finished below the key psychological 11,000 mark was March 9.





The Standard & Poor's 500 index (down 7.20 to 1,256.65, Charts) declined 0.6 percent, and the Nasdaq composite (down 10.18 to 2,152.60, Charts) lost 0.5 percent.

The tech-fueled Nasdaq has now racked up declines for four consecutive sessions, while the broader S&P is on a three-session losing streak.

A more than 2 percent decline in crude prices offered stocks some support Wednesday, but the relief rally fizzled in the afternoon as investors shifted gears and started selling.

"We're really in a no man's land right now. We don't know if the market's been through a correction or if it's the start of a bear market," said David Briggs, head of equity trading at Federated Investors.

No major economic reports were released, but investors took in more comments from Fed officials. Atlanta Fed President Jack Guynn said Wednesday that core inflation has exceeded the level he considers to be acceptable, joining the latest chorus of Fed officials to take a hawkish tone on inflation. (Full story.)

Fed Governor Mark Olson also spoke, but didn't comment on the economic outlook.

Inflation jitters, along with nervousness over interest rates, have roiled stocks all week. The 30-stock Dow, the world's most widely watched market gauge, spent much of Tuesday below the key psychological 11,000 mark, though it closed just above that milestone.

The blue-chip index has racked up more than 300 points in losses over the past four sessions and has tumbled about 5.3 percent since May 10, when it came about 80 points shy of its all-time high.

Chairman Ben Bernanke set off the latest round of jitters Monday, when he warned about inflation running uncomfortably high, as the economy starts to slow.

The combination of rising inflation and slowing growth is especially lethal for stocks.

Meanwhile, former Fed chief Alan Greenspan testified before a Congressional hearing that the U.S. and world economy have been able to withstand the high price of oil, but some recent signs indicate that may be ending. (Full story.)

While Greenspan no longer makes Fed policy, his words are still closely watched by policy-makers and investors, who are scrutinizing every comment from current Fed officials as they seek clues about the outlook for inflation and interest rates.

Here's a look at what was moving before the close:

What moved?
On the Dow, 19 stocks advanced while 11 fell.

Elsewhere, shares of L-3 Communications (up $3.31 to $76.80, Research) surged 5.4 percent after the defense contractor's CEO died suddenly late Tuesday, leaving the company susceptible to corporate buyers.

Target (up $1.23 to $48.83, Research) jumped 2.8 percent after Lazard Capital upgraded the retailer to "buy" from "hold."

Among tech stocks, online auctioneer eBay (up $0.30 to $31.89, Research) added 1.2 percent.

Pfizer (up $0.12 to $23.96, Research) rose after a news report said it received bids of more than $14 billion for its consumer products division, which includes Listerine, Rolaids, Sudafed and other well known brands.

Bidders include British drugmaker GlaxoSmithKline (up $0.48 to $55.97, Research), U.S. drug and consumer product maker Johnson & Johnson (up $0.42 to $61.36, Research), as well as a British household cleaning products maker, Reckitt Benckiser, according to a report in the New York Times.

Market breadth was negative. On the New York Stock Exchange, decliners topped advancers by a margin of three to two on volume of 1.81 billion shares. On the Nasdaq, losers beat winners by a margin of four to three as 1.92 billion shares changed hands.

U.S. light crude oil for July delivery sank $1.68 to settle at $70.82 a barrel on the New York Mercantile Exchange.

Treasury prices fell, raising the yield on the benchmark 10-year note to 5.02 percent, up from 5 percent late Tuesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar rose against the euro and the yen after hitting a one-month high versus the yen Tuesday.

COMEX gold for August delivery fell for a second straight day, losing $2 to $632.70 an ounce.

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