Stocks Can't Sustain Rally After Fed Economic Report
After Tuesday's big rally, the stock market turned back into the Little Engine that Couldn't.</br></br>The Dow Jones Industrial Average, whose 157-point surge Tuesday was its strongest in point or percentage terms since July, gave back 15.14 points, or 0.12%, to finish at 12192.45. It is down 2.2% this year. Trading again was heavy.</br></br>Since its closing record of 12786.64 set on Feb. 20, the blue-chip average has fallen in nine of the past 11 sessions, a decline of 4.6%.</br></br>Yesterday, the Dow was up for most of the day, following bullish comments on the economy from Treasury Secretary Henry Paulson and from the head of the Chicago Federal Reserve bank. But a Fed report in the afternoon indicated that economic strength is only modest, and the report helped persuade investors to cash in some of Tuesday's winnings. Making things worse, home builder D.R. Horton late in the day offered an unusually bleak outlook for the housing market.</br></br>"After last week's volatility, even though we had a great day Tuesday, we haven't healed completely," said Andy Brooks, head of stock trading at Baltimore asset-management firm T. Rowe Price. "People are still very cautious and anxious, so we can be pushed around here pretty easily. There's not a lot of confidence out there."