国际英语新闻：Wall Street ends streak of seven monthly gains

NEW YORK, Oct. 31 (Xinhua) -- U.S. stocks tumbled in the last session of October, ending a seven-month streak of gains for the Standard & Poor's 500 Index, as declines in consumer confidence and concern on the health of financial institutions raised doubt about the durability of the economic recovery.

    In October, the S&P 500 fell 2 percent to cap its first monthly decline since February. And the Dow was little changed in the month. "I think it's just a sort of combination, such as people taking profit, the end of fiscal year. And perhaps the market got a little ahead of itself in terms of the economy. Third quarter earnings have been better than expected, but the real issue is the guidance for the fourth quarter which has not been, in many cases, terribly positive." said Theodore Weisberg, a trader with Seaport Securities on the New York Stock Exchange.

    Stocks have struggled in recent days as fears of an overheated market weighed on the big board. Wall Street had been surging almost nonstop since March. The S&P 500 has rallied as much as 62 percent from a 12-year low on March 9 amid growing confidence in the U.S. economic recovery and propelled the index to a one-year high on October 19. Analysts have been saying for weeks the market was due for a pause or modest pullback.

    The strong dollar has also been playing into the market's recent decline. The Dollar Index, which Intercontinental Exchange Inc. uses to track the currency against six major U.S. trading partners, surged 1.3 percent in the week ended October 30, as the Dow at the same time fell 2.5 percent and S&P 500 lost 4 percent, its steepest decline since May. Commodities are traded in dollars, so a strengthened dollar pushes the price of commodities lower. Weakness in the commodities market further pressures shares of energy and materials producers.

    Although third-quarter corporate profits beat estimates at more than 80 percent of the companies in the S&P that have released results since October 7, according to Bloomberg data, which would mark the highest proportion in data going back to 1993, earnings fell for a ninth straight quarter and few companies delivered upbeat fourth-quarter guidance.

    Theodore thought earnings reports showed the financial sector and the overall economy were still weak. He said: "The market is very venerable to any negative economic and corporate news. We have seen that for the last three weeks. It started three weeks ago when Citigroup and Bank of America reported their earnings. They are very large consumer financial companies. Their earnings were really not so good and send negative message to the whole financial sector. It is true that Goldman and JPMorgan reported excellent earnings, but they are not big consumer banks. The consumer bank is more in touch with the overall economy and consumers."

    Moreover, economic data in recent days has been mixed, giving investors another excuse to take some profits after a relentless run-up in stocks since early March. Both the Conference Board and the Reuters/University of Michigan said its consumer confidence index fell in October. Consumer spending accounts for more than two-thirds of economic activity and Americans still prefer to tighten up their purse strings due to jobless concerns. New home sales unexpectedly decreased 3.6 percent in September, as the end of a tax credit for first-time homebuyers approached, highlighting the importance of government aid to the stability of the housing market.

    The stock market is due for a correction that has haunted the trading floor for weeks. The VIX, the benchmark for U.S. stock options that is known as Wall Street's "fear gauge," jumped the most on October 30 in a year on demand for protection from further losses. The VIX added 24 percent to 30.69, the highest since July 8.

    Theodore predicted that it will be tough for the equity market in the last two months of 2009. "The stock market has gotten ahead of itself and to sustain those values going forward we'll need to see some real positive attraction coming from the economy, but I don't have a lot of confidence personally." said Theodore, "It would be a sort of victory if the market can just hold on its recent gains and get through the end of the year. Unemployment, weak consumer spending and the housing market are key issues to be solved."