New York – A negative sales forecast from homebuilder Toll Brothers Inc. on Tuesday cast doubt on the health of the housing market and sent stocks falling after four sessions of gains.
A softening in the real-estate market, which had helped fuel economic growth for more than two years, could mean weaker consumer spending and a slowdown in the economy. Toll Brothers’ lower sales projections fed those fears, while disappointing forecasts from auto-parts maker Visteon Corp. dragged down the auto sector as well.
Despite Wall Street’s two-week upswing, the news illustrated the problems that still face the economy and the stock market. Yet even amid the market’s lingering worries, investors’ expectations of a year-end rally kept the day’s losses limited.
“With the Dow and Nasdaq having moved up the way they have, it’s only normal to see a bit of a pullback from time to time,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “But you still have a lot of seasonal factors to come into play. November through January has historically been great for stocks, and I think it’ll be almost a self-fulfilling prophecy as investors start trickling back into the market.”
The Dow Jones industrial average fell 46.51, or 0.44 percent, to 10,539.72. The Dow had gained 179.46 over the previous four sessions. Broader stock indicators also fell. The Standard & Poor’s 500 index dropped 4.22, or 0.35 percent, to 1,218.59, and the Nasdaq composite index lost 6.17, or 0.28 percent, to 2,172.07.
The Bloomberg Colorado Index, a price- weighted list of companies based in the state, fell 0.71, or 0.2 percent, to 308.76.
The bond market rallied, with the yield on the 10-year Treasury note falling to 4.55 percent from 4.63 percent late Monday. The dollar made gains against other major currencies, while gold prices moved higher.
Oil prices moved higher, with a barrel of light crude settling at $59.71, up 24 cents, on the New York Mercantile Exchange. Yet while oil prices remain below $60 a barrel, energy prices remain near historic highs and will continue to pressure consumers.
