Stocks fell as a brief rally on hopes of further interest-rate cuts by the Federal Reserve succumbed to profit-taking and the overall bearish tone of the day struck by news of eroding consumer-confidence. The Conference Board, a New York-based private business research group, said its index of consumer confidence fell to 82.2 in November, its lowest level in more than seven years, compared with a downwardly revised 85.3 in October.
"The confidence number came out and that seemed to bother people," said Uri Landesman, chief investment officer with AFA Management Partners. "Christmas buying season is going to be pretty important, not just to retail stocks, but the market as a whole, so when you see a lower confidence number, that causes you to have less confidence the (sales) numbers will be OK."
A brief afternoon rally that carried the Dow to within eight points of the 10,000 level was sparked by a Federal Reserve governor voicing support for further interest-rate cuts.
Governor Laurence Meyer thought it would be a mistake for the US central bank to move slowly on lowering interest rates, even though they are already quite low. Meyer said risks remain tilted towards the downside, but said the economy should strengthen over the next year.
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