August 23rd, 2010
07:45 PM ET

Stocks end lower ahead of GDP revision

A look at highlights from the day's business news:

Stocks slump at the close

U.S. stocks ended a choppy day of trading lower Monday, as a dismal economic outlook overshadowed earlier optimism fueled by takeover talk.

After starting the session sharply higher and seesawing throughout the day, the Dow Jones industrial average lost 39 points, or 0.4 percent, the S&P 500 ticked down 4 points, or 0.4 percent, and the Nasdaq composite dropped 20 points, or 0.9 percent.

It's been a rocky ride for Wall Street over the past couple of weeks, as investors have shifted their focus between positive company news and gloomy economic readings.

No major economic releases were scheduled Monday, so investors were already looking ahead to the government's revised reading of GDP due Friday, said Dave Rovelli, managing director of U.S. equities at Canaccord Adams. Gross domestic product (GDP), the broadest measure of the nation's economic activity, is forecast to be revised down to an annual rate of 1.4 percent, a significant drop from its previous reading of 2.4 percent.

Treasurys edge higher

Prices for U.S. Treasurys rose slightly Monday as investors braced for $102 billion in auctions and several economic reports.

The yield on the benchmark 10-year note fell to 2.6 percent from 2.62 percent late
Friday. Bond prices and yields move in opposite directions.

The yield on the two-year note fell near a record low at 0.49 percent, while the
five-year yield dipped to 1.42 percent. But the yield on the 30-year bond was unchanged at 3.66 percent.

The mixed performance came after Treasury yields held near historic lows for most of last week as economic jitters boosted the appeal of fixed-income assets such as U.S. debt.

Investors have been torn between improved corporate profits and merger activity on the one hand, and disappointing economic indicators, such as a recent increase in initial claims for jobless benefits, on the other hand. As a result, trading in stocks and bonds has been choppy, with relatively few investors driving the market.

- reporters Blake Ellis and Ben Rooney contributed to this report.

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Filed under: Business • Economy
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