Consumer Income Report Deflates Market
An unsettling report on consumer incomes set off a spate of profit-taking on Wall Street Monday as investors worried that a tepid economy would erode companies' third-quarter earnings. Another drop in oil prices failed to shake the gloom from the market.</br></br>While investors were cheered by the Commerce Department's report of a strong rise in consumer spending for July, nearly flat growth in personal incomes and a handful of profit warnings for the third quarter made investors nervous. The news prompted them to cash in their gains following two weeks of advances.</br></br>"There's not a lot of resistance here, and you're seeing a little bit of profit taking," said Todd Leone, managing director of equity trading at SG Cowen Securities. "Trading lower is the path of least resistance."</br></br>Trading volume was again extremely light as many on Wall Street refused to make large moves until the Republican National Convention concluded without incident. Many investors also awaited the government's August employment report due Friday, hoping for signs that the economy was emerging from a sluggish summer.</br></br>The Dow Jones industrial average fell 72.49, or 0.7 percent, to 10,122.52. The Standard & Poor's 500-stock index declined 8.62, or 0.8 percent, to 1,099.15, and the Nasdaq composite index dropped 25.60, or 1.4 percent, to 1,836.49.