The Closing Bell 10/28: Investors unsettled by housing, economic reports

Signs of a weaker housing market and a gloomier outlook on the economy gave investors more reasons to dump stocks Wednesday.

Major market indexes fell by the largest amount in about a month Wednesday after the Commerce Department said new home sales dropped for the first time in five months. Sales slid 3.6 percent in September to 402,000. Analysts had expected an increase.

Among big-name companies in the Kansas City region, only Sprint Nextel had an up day. Its shares rose 7 cents, to $3.24, ahead of its quarterly earnings report Thursday.

Garmin stock got hammered on news that Google's free turn-by-turn navigation service would be available as part of the next version of its Android open-source operating system for smartphones. Garmin shares closed at $31.59, down $6.19, nearly 16.4 percent.

The Dow Jones industrial average lost 119 points, or 1.2 percent, in its third straight triple-digit drop.

The Nasdaq composite index fell 2.7 percent, while the Russell 2000 index of smaller companies tumbled 3.5 percent. Many of the stocks in both indexes are considered more risky in a tough economy and so they suffered some of the biggest losses.

The retreat came as Goldman Sachs Group Inc. reduced its expectation for the nation's economic output for the July-September period. Goldman Sachs predicts third-quarter gross domestic product rose at an annual rate of 2.7 percent, weaker than its earlier forecast of 3 percent.

The government's report on third-quarter GDP is due Thursday. Economists are looking for growth at an annual rate of 3.3 percent after a record four straight quarters of contraction.

The day's slide signaled that investors were reassessing their hopes for a recovery in the economy. Demand for safe-havens like Treasurys rose as did shares of companies whose business is expected to fare better in a slump. Stocks of consumer staples companies like Procter & Gamble Co., which makes Tide detergent and Gillette razors, edged higher.

Energy, financial and retail stocks posted some of the biggest losses.

Analysts said the market's slide in the past week isn't surprising given the size of the advance in the past eight months and mixed economic readings.
The KansasCity.com index of 145 regional companies showed a drop of 9.05 points, or 1.51 percent, at 591.67.

Among Kansas City area companies of interest:

I Cerner Corp. closed at $76.86, down $3.07.

I Capitol Federal Financial closed at $30.60, down 12 cents.

I Commerce Bancshares Inc. closed at $38.86, down 14 cents.

I DST Systems Inc. closed at $42.30, down $1.14.

I Garmin Ltd. closed at $31.59, down $6.19.

I Great Plains Energy closed at $17.57, down 5 cents.

I H&R Block Inc. closed at $18.59, down 21 cents.

I Kansas City Southern closed at $24.59, down 82 cents.

I Sprint Nextel Corp. closed at $3.24, up 7 cents.

I UMB Financial Corp. closed at $40.30, down 65 cents.

I Waddell & Reed Financial Corp. closed at $28.76, down $1.02.

I YRC Worldwide Inc. closed at $3.64, down 22 cents.

The Closing Bell is compiled from staff and wire reports.