The stock market is holding up, just not pressing ahead as the economic signs look a little less promising.
Stocks had their fourth straight day of incremental moves as traders ran down a new list of concerns: Commodity prices slumped on fears that demand will fall, orders for big-ticket manufactured goods dropped more than expected last month, and demand was weak at an auction for government debt.
The Dow Jones industrial average fell 26.00, or 0.3%, to 9,070.72. The broader Standard & Poor's 500 index fell 4.47, or 0.5%, to 975.15, while the Nasdaq composite index slid 7.75, or 0.4%, to 1,967.76.
Investors are uneasy but aren't giving up on stocks. The Dow lost only 26 points on Wednesday and major indexes are still up about 11% since only mid-July. Analysts say the market's buoyancy after such a big gain is a welcome sign of stability, but also that more good news is needed for stocks to resume their climb.
For now, though, investors are finding more reasons for concern. The price of oil and raw materials fell after stocks tumbled in China on fears that the growth in that country's economy would slow. That could hurt demand for a range of commodities. A jump in U.S. crude inventories further weighed on the price of oil.
The Commerce Department said orders to U.S. factories for manufactured goods — those expected to last at least three years — fell an unexpectedly steep 2.5% in June. The slide reflected troubles in the auto industry and a drop in demand for commercial aircraft. It was the largest decrease in five months, and was worse than the 0.6% decrease analysts were expecting.
Lackluster demand at a government debt auction for the consecutive second day fanned worries that rising interest rates could hobble a recovery in the economy. That boded poorly for a big auction of 7-year Treasury notes on Thursday.
Russell Croft, portfolio manager at Croft Leominster Investment Management in Baltimore, cautioned against reading too much into any one economic number because he expects readings will continue to come in mixed as the economy begins to recover.
"There's a good economic number and then there's a bad number and that's probably what you'd expect at this juncture of the recession," he said. "Hopefully it's two steps back and three steps forward."
Traders are facing an intense seven-day run of economic data that will help shape views about how quickly the economy can pull out of the longest recession since World War II. On Thursday, weekly unemployment figures are due and a reading of the economy's overall output for the April-June quarter comes on Friday. Next week, reports are expected on manufacturing, housing, employment and the service industry.
Analysts say even some good numbers could bring out more buyers.
Meanwhile, the price of oil and raw materials fell after stocks tumbled in China on fears that the growth in the country's economy would slow. That could hurt demand for a range of commodities. A jump in U.S. crude inventories last week added to the unease.
On Tuesday, stocks finished mixed after several corporate earnings reports and the Conference Board's reading on consumer confidence fell short of expectations.
The yield on the benchmark 10-year Treasury, which moves opposite its price, rose to 3.70% from 3.69% late Tuesday.