Mike Taylor
Updated from 3:14 p.m. EST
Stocks in New York are back in negative territory Friday afternoon, held back by a dismal economic outlook. The Dow Jones Industrial Average was down 237 points to 8597. The S&P 500 was down 29 points to 882. The Nasdaq shed 66 points to 1530. The market had a technical reversal Thursday, and now the major averages are coming off of the levels that rally produced, said Peter Cardillo, chief market economist at Avalon Partners. He foresees the market staging short-term reactions to economic data releases. "Until the market gets comfortable with the depth and ... the time frame of the recession, it's just going to be a trading affair," he said. Several of the day's economic data points had dragged on the market. The Census Bureau reported that October retail sales declined a record 2.8%, following a 1.3% decline in September. Economists were expecting a 2.1% decrease. Excluding autos, sales slumped 2.2%, also a record. Writing for his RealMoney.com blog, bond market strategist Tony Crescenzi said that much of the declines could be attributed to a nearly 13% decline in sales at gas stations. He said that the data indicate another sharp drop in the personal-spending component GDP after a 3.1% decline in the third quarter. September business inventories declined 0.2%, showing a greater decrease than economists had expected. The August reading was also revised downward from 0.2% from 0.3%, according to the Census Bureau. A preliminary November consumer-sentiment survey from the University of Michigan showed an index reading of 57.9, above the consensus estimate and slightly above October's reading of 57.6.
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