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Wall Street falls following drop in July home sales

Wall Street falls following drop in July home sales

Wall Street pulled back Monday, losing momentum from last week's gains after news that sales of existing homes slipped in July for a fifth straight month stirred concerns about the strength of the U.S. economy.
Sales of existing homes slowed to their most sluggish pace in nearly five years, while home prices fell for a record 12th straight month. The National Association of Realtors reported that existing home sales slipped by 0.2 percent in July to a seasonally adjusted annual rate of 5.75 million units. Inventories rose 5.1 percent to a record 4.59 million units.
The pullback perhaps wasn't unexpected given last week's rally and that Wall Street is still trying to sort out concerns about failing mortgages and tighter access to credit for both individuals and corporations.
A fresh round of buyout news might have acted to limit the stock market's losses Monday, which were small compared to the triple-digit plunges the Dow Jones industrials suffered in early August. Stocks also pared their declines after the Chicago Federal Reserve reported that manufacturing activity in the Midwest ticked up 0.6 percent in July from June.
"I think there is still a little bit of nervousness about the credit market but that seems to be abating slowly," said Brian Gendreau, an investment strategist for ING Investment Management. "We had a very strong week last week and I wouldn't attribute this downmarket to any return to panic," he said, referring to concerns about bad loans and a drying up of liquidity that upset markets in recent weeks. "I think it's just a normal down day."
The Dow fell 56.74, or 0.42 percent, to 13,322.13. The Standard & Poor's 500 index fell 12.58, or 0.85 percent, to 1,466.79, and the Nasdaq composite index fell 15.44, or 0.60 percent, to 2,561.25.
On Monday, U.S. Steel Corp. said it will buy Canada's Stelco Inc. for about US$1.1 billion; Swiss electrical engineer ABB Ltd. said it will sell its oil and gas production plant to Chicago Bridge & Iron NV for US$950 million; and Taiwanese computer vendor Acer Inc. said it will acquire U.S. computer maker Gateway Inc. for US$710 million.


Updated : 2020-12-03 13:13 GMT+08:00