Stocks down after home sales, labor cost data

The National Association of Realtors disappointed the market when it said pending sales of existing homes fell in March by 1 percent, more than many economists predicted.

Weak housing data hardly comes as a surprise to investors now, though, and Wall Street did get dose of good news when the Labor Department said labor costs rose at an annual rate of 2.2 percent during the first quarter. That's down from a 2.8 percent rise the previous quarter, suggesting that inflation pressures may be letting up.

But generally, inflation remains a concern given that oil prices have doubled over the past year to record levels above $122 a barrel on Tuesday. As a result, gasoline prices are surging further into record terrain, strapping debt-laden U.S. consumers with another financial burden. Kansas City Federal Reserve President Thomas Hoenig in a speech late Tuesday cited inflation as his main worry.

The stock market will be closely watching the energy market's reaction Wednesday to the government's weekly report at 10:30 a.m. EDT on U.S. fuel inventories. On the New York Mercantile Exchange, crude edged up 18 cents to $122.02 a barrel after reaching a record $122.73 on Tuesday.

The Dow Jones industrial average slipped 24.99, or 0.19 percent, to 13,995.84.

Broader stock indicators were also lower. The Standard & Poor's 500 index fell 4.45, or 0.31 percent, to 1,465.47, and the Nasdaq composite index fell 0.77, or 0.03 percent, to 2,482.54.

The stock market rose moderately Tuesday despite the surge in oil prices, as bargain hunters bought up pummeled financial and housing-related stocks in the hopes of a late-2008 economic rebound.

In morning trading Wednesday, gold prices fell, while the dollar rebounded against other major global currencies.

Bond prices edged higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 3.91 percent from 3.92 percent late Tuesday.

In corporate news, Clearwire and Sprint Nextel Corp. are planning to merge their wireless broadband units to create a new $14.55 billion wireless communications company. The new company is getting a $3.2 billion investment from Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks.

Clearwire rose $1.38, or 8.4 percent, to $17.84, and Sprint rose 40 cents, or 4.4 percent, to $9.59.

Overseas, Japan's stock market rose 0.38 percent. By afternoon trading in Europe, Britain's FTSE index rose 0.69 percent, Germany's DAX index rose 0.98 percent, and France's CAC-40 rose 0.99 percent.

___

On the Net: