US stocks close lower

Wall Street extended its retreat today after downbeat forecasts from companies such as eBay prompted investor worries that the market had risen too far. The three main indexes finished mixed for the week.

“The marketplace is a little too sanguine, and expectation levels might have to be tempered going forward,” said Stephen Massocca, president of Pacific Growth Equities.

The Dow Jones industrial average closed down 69.93, or 0.7 percent, at 9,721.79, for a three-day loss of 91 points.

Broader stock indicators also finished lower. The Standard & Poor’s 500 index fell 10.75, or 1 percent, to 1,039.32, and the Nasdaq composite index declined 37.78, or 1.9 percent, to 1,912.36.

For the week, the Dow rose 0.5 percent, the Nasdaq lost 0.2 percent, and the S&P edged up 0.1 percent.

Poor earnings reports from several companies yesterday, including Sun Microsystems and DoubleClick weighed down technology shares in today‘s trading.

Ebay shares fell despite a reported a 69 percent surge in profits, after analysts said the online auction house’s period of rapid growth may be fading.

“I think a lot of the expectations are already priced in the numbers,” said Neil Massa, equity trader at John Hancock Funds. “Companies not only have to do better, they have to guide higher. … But earnings overall have been fine, and the economic numbers point to a recovery.”

Sun shares also fell in heavy trading on the Nasdaq after reporting a wider-than-expected loss. The computer maker continues to struggle with weak demand and questions about its strategy.

DoubleClick shares also took a dive after the online advertising company gave an outlook for its fourth quarter performance that missed Wall Street’s estimates.

Ahold, the Dutch-based global food retailer, saw its US-listed shares drop after the company offered a grim outlook for its business, the first time it has discussed performance since a recent accounting scandal.

Gainers included Micron Technology which edged despite a downgrade by a UBS analyst.

The disappointing corporate news outweighed several encouraging economic indicators. The Commerce Department reported that residential construction rose in September from the previous month, climbing to the second-highest level so far this year.

The report reinforced hopes that a strong housing market, which is being fuelled in part by historically low interest rates, is helping to drive the economy out of its doldrums.

A separate survey from the National Association of Home Builders found that builders were optimistic about sales prospects for October and for the next six months, yet another positive sign for the sector.

Also, the widely watched consumer sentiment index from the University of Michigan was higher than analysts expectations, rising to 89.4 in mid-October from 87.7 in September, according to Dow Jones Newswires. Economists had been expecting 88.5.

“We’ll probably trade sideways for a while until earnings are out,” Massa said. “I think we’re looking at a very good year for the markets overall. It’s all in the guidance going forward – will companies be buying more, will capital expenditures go up?”

The Russell 2000 index, which tracks smaller company stocks, fell 9.28, or 1.8 percent, to 520.36.

Declining stocks outnumbered advancing ones 9 to 4 on the New York Stock Exchange. Volume was light.