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Wall St slips as economy eyed

Tuesday, September 18 15:02:43

Wall Street retreated from multiyear highs for a second day today as investors looked to upcoming economic data this week to help extend a rally that has been largely driven by central bank stimulus.

U.S. stocks have rallied 7 percent since early August, propelling the S and P 500 index to the highest in nearly five years as central banks in Europe and the United States acted to prop up flagging economies. But analysts say that for the rally to continue economic data needs to improve.

"If we don't start seeing stronger U.S. economic data and Chinese, or we don't start seeing strong policy measures out of the Chinese, then I think we're going be due for a correction," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

De Gan said if the economic data does not improve, he would look for a correction in the S and P 500 back towards the index's 50-day moving average, which is about 5 percent below current levels.

FedEx Corp cut its profit forecast for its fiscal year 2013 on Tuesday, saying that a weakening world economy had prompted customers to shift toward lower-priced shipping. The shares fell 2 percent to $87.60. Earlier this month FedEx warned the slowing economy was hurting its results.

The NAHB Housing Market Index at 10 a.m. (1400 GMT) is expected to be little changed in September after unexpectedly gaining in the previous two months. However, at 37 on the index sentiment remains well below the 50s to 70s seen in the 1990s and 2000s. The NAHB data is the first of a series of housing data this week.

The Dow Jones industrial average dropped 19.70 points, or 0.14 percent, to 13,573.67. The Standard and Poor's 500 Index fell 2.34 points, or 0.16 percent, to 1,463.43. The Nasdaq Composite Index dropped 7.66 points, or 0.24 percent, to 3,176.29. (C ) Reuters