Concerns about a potentially weakening economy left stocks lower at Wednesday’s close, even as it appeared demand for gasoline and oil has fallen.
Investors curbed talk of a 1970s-style energy crunch caused by Hurricane Katrina after the Department of Energy’s data arm said U.S. demand for oil and gas fell in July due to higher prices. Still, crude oil futures were higher on the New York Mercantile Exchange.
Wall Street was concerned with nearly flat industrial output figures from the Federal Reserve — due to Katrina — and a 2.1 percent drop in retail sales. However, the Commerce Department noted that with auto sales removed, other retail sales rose 1 percent, though much of that was due to a rise in gasoline prices.
With the mix of news, trading was light as many investors simply held off, hoping that the Fed, which meets Tuesday, could shed light on the nation’s economic situation.
“There seems to be a lot of uncertainty about what the Fed is going to say,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “It seems a little early, given the meeting is next week, but I do think people are just waiting around for better news.”
The Dow Jones industrial average was down 52.54 points, or 0.5 percent, at the close, while the broader Standard & Poor’s 500-stock index was off 4.04 points, or 0.3 percent. The Nasdaq composite index, full of technology stocks, gave up 22.42 points, or 1 percent.
The losses were mitigated by a strong report from Lehman Brothers Holdings Inc., which rose 13 cents to $112.41. The Wall Street firm reported a 77 percent jump in third quarter profits, easily surpassing Wall Street’s forecasts due to record revenues in its investment banking and investment management segments. That, analysts said, was a bullish sign for the overall market.
“What we’re seeing from Lehman is that market conditions improved through the summer, and that conditions are likely to continue improving,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisers. “That’s showing up in the earnings and in the detail of their reports.”
Baidu.com Inc. tumbled 28.4 percent, or $32.27, to $81.32 after Goldman Sachs and Piper Jaffray each initiated coverage of the stock with “underperform” ratings. Piper Jaffray said the stock’s valuation is “off the chart.”
Northwest Airlines Corp.’s stock rose 30 cents to $1.87 in regular trading hours ahead of its Chapter 11 filing, which came after the close. Delta Air Lines Inc., the nation’s third-largest airline, also filed for bankruptcy after the close. In regular trading hours its share price fell 7 cents to 71 cents.
Overseas, Japan’s Nikkei stock average fell 0.52 percent. In Europe, Britain’s FTSE 100 closed up 0.18 percent, France’s CAC-40 was up 0.38 percent and Germany’s DAX index was up 0.19 percent.