New York – Disappointing earnings from electronics retailer Best Buy Co. sent stocks falling Tuesday as investors feared that lackluster consumer spending heading into the holiday season would weaken the overall economy.
Best Buy’s profits, which rose 25 percent from a year ago, missed Wall Street’s forecasts, and the company said the current quarter also would miss targets, heightening investors’ concerns that high gasoline and heating-oil prices will hurt consumers.
A rise in crude oil also pressured stocks. A barrel of light crude was quoted at $63.23, up 12 cents, on the New York Mercantile Exchange.
The retail news overshadowed a slightly better-than-expected report on wholesale inflation. The Labor Department’s Producer Price Index rose 0.6 percent in August, less than the 0.7 percent expected. With costly fuel prices removed, “core” PPI was flat for the month.
“You have some good economic data, but I think everyone is still trying to figure out what the post-Hurricane Katrina environment is like,” said Joseph Battipaglia, chief investment officer at Ryan Beck & Co.
“For now, the fundamentals look strong, but that could change in the next few months as the distortions caused by Katrina come through in the economic data, and that’s what has people holding off,” he said.
The Dow Jones industrial average fell 85.50, or 0.8 percent, to 10,597.44.
Broader stock indicators also lost ground. The Standard & Poor’s 500 index dropped 9.36, or 0.75 percent, to 1,231.20, and the Nasdaq composite index slid 11.08, or 0.51 percent, to 2,171.75.
The Bloomberg Colorado Index, a price- weighted list of companies based in the state, lost 1.21, or 0.4 percent, to 313.46.
Bonds recovered after the previous session’s sell-off, with the yield on the 10-year Treasury note falling to 4.13 percent from 4.17 percent late Monday. The dollar was narrowly mixed against other major currencies, while gold prices fell.
The Commerce Department reported that the nation’s trade deficit fell to $57.9 billion in July from $59.5 billion in June despite higher import prices for crude oil.
