Chris Sanders
Blue-chip stocks edged lower on Friday after shares of conglomerate General Electric Co. (NYSE:GE - news) sank on concerns its costs are rising faster than revenues in some of its businesses.
In addition, a negative brokerage recommendation affecting Home Depot Inc. (NYSE:HD - news), the home improvement store, and other retail companies pushed down the Dow average and the Standard & Poor's 500 stock index. The Nasdaq Composite index rose, led by Apple Computer Inc. (Nasdaq:AAPL - news)
The Dow hit a fresh all-time high on Thursday after consumer companies like McDonald's Corp. (NYSE:MCD - news) and Costco Corp. (Nasdaq:COST - news) beat earnings expectations.
"You are looking at the fact we've run pretty far. There's got to be a little consolidation ... we are clearly focusing on now on earnings," said Cummins Catherwood, managing director at Rutherford, Brown and Catherwood LLC in Philadelphia.
The Dow Jones industrial average (^DJI - news) was down 22.65 points, or 0.19 percent, at 11,925.05. The Standard & Poor's 500 Index (^SPX - news) was down 1.21 points, or 0.09 percent, at 1,361.62. The Nasdaq Composite Index (^IXIC - news) was up 2.96 points, or 0.13 percent, at 2,349.14.
Data later in the morning showing consumer sentiment rose more than expected in September added to pressure on stocks as the news reduced hopes of an interest rate cut by the Federal Reserve and therefore lower borrowing costs.
Shares of General Electric Co. (GE.N) fell 1.3 percent to $35.75 on the New York Stock Exchange and were the top drag on the S&P. GE reported third-quarter profit in line with expectations and revenues higher than expected, raising concerns about weak margins, particularly at its plastics and NBC Universal units.
Shares of Home Depot, another Dow component, fell 2.6 percent to $36.92 after Prudential Equity Group began coverage of the biggest retailers with an "unfavorable" rating and suggested investors reduce the proportion of Home Depot holdings.
Prudential cited high gasoline prices, higher interest rates and a deteriorating housing market.
September retail sales fell unexpectedly while
A drop in shares of Centex Corp. (NYSE:CTX - news), the fourth-largest U.S. home builder, helped push an index of home builder stocks (^DJUSHB - news) lower by 2.6 percent. Centex shares declined 3.9 percent to $52.97 after the company late on Thursday slashed its earnings outlook as a slumping housing market led to record home sale cancellations.
September retail sales unexpectedly declined on a record drop in gasoline sales. Economists had forecast a slight rise in sales. However, when a record 9.3 percent drop in gasoline sales was stripped out of the government data, retail sales rose 0.6 percent on strong clothing and department store sales.
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