Associated Press
NEW YORK — Stock prices fluctuated but nonetheless showed signs of stability Tuesday as investors looked for bargains after last week’s precipitous drop.
The major indexes closed modestly higher, having withstood several waves of profit-taking from Monday’s big rally. Analysts were generally pleased with Wall Street’s performance and noted that just holding steady is good news, given the recent volatility of stocks.
"We’re still seeing buying, and that’s a step in the right direction," said Bryan Piskorowski, market commentator at Prudential Securities.
The market calmly digested a Conference Board report showing that consumer confidence this month was at its lowest level since January 1996, falling to 97.6 from 114 in August. The numbers are closely watched because consumer spending accounts for two-thirds of the economy’s activity.
Analysts hesitated to attribute much to the market’s reaction to the data, saying the results weren’t surprising in view of the Sept. 11 terrorist attacks and already weak economy. They said the bigger concern for the market is still weak corporate profits, which show few signs of improving.
Before the hijackings of the planes that crashed into the World Trade Center and Pentagon, most analysts estimated the weakened economy, along with corporate profits, would start to improve early next year. That forecast has been revised as the economic fallout begins to be assessed.
The most striking effect has been on the airlines, which have cut more than 100,000 jobs and reduced flight schedules, citing Americans’ fear of flying in the aftermath of the attacks. The tourism industry has also been hurt.
Other industries have also blamed the disaster for difficult times ahead.
The National Association of Realtors reported sales of previously owned homes jumped to a record level in August, but have slowed in the wake of the terrorist attacks two weeks ago. Strong demand for homes has helped support the sagging economy, and the data appeared to bring into question how long that support would last.
"Right now, the consumer doesn’t have a lot to look forward to," said Bill Barker, investment consultant at Dain Rauscher. "There will likely be more layoffs and certainly a weaker stock market and a stalling in house prices and price appreciation."
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