Consumer confidence fell last month to the lowest level since the United States went to war against Iraq six months ago, as the economy's failure to generate jobs raised concerns about whether the expansion can be sustained.
The New York-based Conference Board's consumer confidence index dropped to 76.8 last month from a revised 81.7 in August. The percentage of people who saw jobs as hard to get rose to 35.3 percent, the highest since December 1993.
The drop in confidence sent stocks back into a downward slide yesterday, leaving Wall Street with a loss for the month of September.
The Dow Jones Industrial Average closed down 105.18, or 1.1 percent, at 9,275.06, according to preliminary calculations. The loss more than erased Monday's gain of 67.16.
The market's other gauges were also sharply lower, following their first gains in four days. The Nasdaq composite index dropped 37.62, or 2.1 percent, to 1,786.94. The Standard & Poor's 500 index fell 10.61, or 1.1 percent, to 995.97.
Rhode Island impact stocks fell, led by Washington Trust Bancorp and Amgen Inc. The Providence Journal/Bloomberg Rhode Island Index, a price-weighted list of companies with operations in the region, fell 0.46 to 203.76. Washington Trust fell $1.52 to $24.01. Amgen fell 85 cents to $64.52.
But the market nonetheless ended a solid third quarter, with the Nasdaq composite index rising 10 percent for its fourth straight quarterly gain. The Dow Jones industrials and Standard & Poor's 500 index each scored a second consecutive quarterly advance.
Still, yesterday was the fourth down day for the market out of the last five.
Analysts said the market's declines were owed in part to the end of the quarter. While institutional investors, including mutual fund managers, often buy stocks at the end of the quarter to dress up their portfolios, they also sell to lock in gains. Selling often happens at the end of the third quarter in particular because mutual funds end their fiscal year at the end of October.
The Nasdaq claimed its fourth consecutive quarterly advance, a run not seen since the six-quarter runup that ended March 31, 2001. The tech-dominated index ended the third quarter up 10.1 percent.
The Dow and S&P achieved their second straight winning quarters -- feats not seen since the fourth quarter of 2001 and first quarter of 2002 for the Dow and since the fourth quarter of 1999 and first quarter of 2000 for the S&P. The Dow's quarterly gain totaled 3.2 percent, while the S&P's came to 2.2 percent.
But the market ended down during September, historically one of the weakest months for stocks. For the Nasdaq, it was the end of a seven-month streak, while for the Dow and S&P it marked the end of a six-month rally. The Nasdaq lost 1.3 percent in September; the Dow, 1.5 percent; and the S&P, 1.2 percent.
The economy has lost jobs for seven consecutive months, and payrolls may have fallen by 25,000 more in September, according to the median forecast of 64 economists surveyed by Bloomberg News. The Labor Department is to release the employment report at 8:30 a.m. Friday.
The National Association of Purchasing Management-Chicago said its factory index declined to 51.2 from August's 58.9, which was the highest since May 2002. The index has been above 50, meaning business expanded at the region's factories, for five straight months.
While Federal Reserve studies have shown that confidence indicators don't always predict changes in spending, investors are betting that job losses and a continued drop in confidence will sap the expansion. Retail sales fell 0.4 percent last week and are down for the third week, the Bank of Tokyo-Mitsubishi UBSW said yesterday in its weekly chain store sales report.
Tech stocks were among yesterday's losers, having risen the most during the market's six-month rally. Microsoft Corp. fell $1.03 to $27.80 and Intel Corp. declined 85 cents to $27.52.
And Sun Microsystems Inc. dropped 55 cents to $3.32 after Bear Stearns downgraded the computer networker to "underperform" from "peer perform."
Trex Co. Inc. slid $3.50 to $31.05 after saying it will miss third-quarter and yearly earnings expectations because of poor weather conditions and high material costs. The company makes a material used to build residential and commercial decks.
Retailing issues traded higher on a string of upgrades. Talbots Inc. advanced 76 cents to $34.85 and AnnTaylor Stores Corp. rose $1.15 to $32.14 after SG Cowen raised each of their ratings to "outperform" from "market perform." And, bebe stores inc. climbed $2.03 to $27.10 after Wedbush Morgan raised its recommendation to "buy" from "hold."
Declining issues narrowly outnumbered advancers on the New York Stock Exchange. Volume was moderate.
The Russell 2000 index, which tracks smaller company stocks, fell 5.04, or 1 percent, to 487.67.
Overseas, Japan's Nikkei stock average finished yesterday down 0.1 percent. In afternoon trading in Europe, France's CAC-40 fell 1.7 percent, Britain's FTSE 100 declined 1.2 percent and Germany's DAX index shed 2 percent.
With Associated Press reports
