Wall Street dropped for the first time in three days after producer prices rose more than expected and Google shares fell after data showed that the number web users clicking on ads, have decreased.
U.S. producers price increased 1 percent, spurring concern that profits at S&P 500 companies will extend the worst slump since 2001. In a separate report, data showed consumer confidence fell more than forecast in February to the lowest level in five years as the labor market continued to shrink and the economy faltered.
The Standard & Poor's 500 Index dropped 1.99 points, or 0.2 percent, to 1,373.79 at 11:26 a.m. in New York. The Dow Jones Industrial Average lost 47.13, or 0.4 percent, to 12,617.35. The Nasdaq Composite Index slid 2.53, or 0.4 percent, to 2,330.01. About eight stocks dropped for every seven that rose on the New York Stock Exchange.
Google Inc. shares dropped to their lowest since May last year after technology-sector researcher comScore, released late Monday, showed that the number of Web users clicking on ads dropped 7 percent in January from the previous month.
Google's shares fell more than $37 to stand at $448.93 in afternoon trading. That's the lowest price seen in nearly a year, and the shares have lost 38 percent since November.
While this is one data point for domestic google.com only and from one source, which may or may not be accurate, it is a concerning data point and somewhat reflects what we have heard from [search engine marketers] -- that they were not seeing a high volume of clicks from consumers possibly due to the economic slowdown, wrote Robert Peck of Bear Stearn.
Even though Google's ad viewings dropped, total searches increased 39 percent from a year earlier.