US stocks fall in short trading session

A tepid durable-goods report put pressure on Wall Street today, sending stocks modestly lower.

Volume was light and trading in a shortened session finished at 1pm (1800 Irish time) today.

“The durable-goods orders really took the cheer out of the holiday,” said Todd Clark, head of listed equity trading at Wells Fargo Securities. “It suggests the corporate earnings that people had hoped would firm up is not.”

The Dow Jones industrial average fell 45.18, or 0.5%, to close at 8,448.11, having fallen 18 points on Monday.

The broader market also finished lower. The Nasdaq composite index dropped 9.23, or 0.7%, to 1,372.46. The Standard & Poor’s 500 index declined 4.91, or 0.6%, to 892.47.

The Commerce Department reported today that orders to US factories for big ticket goods fell 1.4% in November, a setback for manufacturers. Economists were expecting an increase of 0.8%.

Analysts say investors are concerned that holiday retail sales have been overly sluggish. They add that the traditional Santa Claus rally on optimism for the coming new year is in question because of concerns about a war with Iraq and doubts about the economy.

Still, some believe 2003 offers better market prospects, particularly if a Republican-controlled Congress passes business-friendly tax cuts.

“Over the longer term for next year, we do think the economy can continue to expand,” said Kevin Caron, market strategist at Ryan, Beck & Co LLC. “And should we get a resolution in Iraq, should we get a tax package ... you could have a fairly decent rally in stock prices.”

Ultimate Electronics fell 1.57 to 9.48 after the operator of consumer electronic stores lowered its fourth-quarter outlook, citing lagging holiday sales.

Gainers included Sun Microsystems, which rose 17 cents to 3.13, after a federal judge ordered Microsoft to distribute Sun’s Java programming in Microsoft’s operating system, pending the outcome of Sun’s private antitrust suit. Microsoft dropped 18 cents to 53.82.

Declining issues outnumbered advancers about 7 to 6 on the New York Stock Exchange.

The Russell 2000 index, which tracks smaller company stocks, fell 1.61, or 0.4%, to 388.12.