Wall Street: Friday mid-session

By THIS IS MONEY
Updated:

 

WEAKER-than-expected High Street sales and worrying trading news from tech giant Oracle sent stocks into retreat.

Together they fuelled investor fears that the economy's revival remains some way off. Hopes of a recovery triggered a strong rally on Wall Street into the summer. So far, there has been little evidence to back it up.

But the market recovered through the morning, as some investors decided Oracle's grim news did not necessarily apply to the technology sector as a whole.

'The Oracle news was disappointing and that took a lot of the tech and telecoms issues down with it, but those sectors are staging a bit of a comeback,' said Tim Smalls, managing director at SG Cowen.

The Dow Jones Industrial Average was down 49.69 points to 9410.07 by mid-session, and the tech-heavy Nasdaq shed 13.63 points to 1832.46.

Oracle, the world's second-largest software company, fell 71 cents, or 5%, to $12.27. It posted a 28% rise in quarterly profits but new licence sales fell a surprise 7%.

Total retail purchases rose 0.6% in August, far less than the 1.4% gain pundits had predicted. Economists look carefully at consumer spending for signs of the economy's health since it powers about two-thirds of economic growth. 'Consumer spending slowed dramatically,' said John Person, head financial analyst with Infinity Brokerage Services. 'It could be an indication that the temperature of the economy is turning cooler than what people wanted to see.'

Meanwhile, the University of Michigan's preliminary September consumer sentiment index dropped to 88.2 from 89.3 in August. It was expected to rise to 90.0.

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