Stocks wobble after tepid economic reports

NEW YORK - Stocks are seesawing in a tight range as disappointing reports on manufacturing and housing touch off worries about the strength of the economy.

Investors were disappointed to hear that durable goods orders unexpectedly fell in August. The second drop in three months shows any rebound in manufacturing is likely to be slow.

The Commerce Department said orders for goods expected to last at least three years fell 2.4 percent, after increasing 4.8 percent in July. Economists polled by Thomson Reuters, on average, forecast a 0.5 percent increase.

The drop was due primarily to a sharp fall in demand for commercial aircraft, a highly volatile portion of the orders report. Even excluding aircraft and other transportation goods, orders were flat in August. Economists had been predicting a rise of 0.5 percent in that number as well.

Meanwhile, the Commerce Department also reported that new home sales inched up to 429,000 last month from 426,000 in July. Economists surveyed by Thomson Reuters had expected a pace of 440,000.

Disappointing quarterly results from BlackBerry maker Research In Motion Ltd. are weighing on the tech-heavy Nasdaq composite index.

Traders are also watching a meeting of leaders from the world's 20 largest economies in Pittsburgh for indications of how those governments plan to bring about a strong, sustainable recovery.

Stocks fell Thursday following disappointing reports on existing home sales and drops in commodity prices, which hurt materials and industrial stocks. The market also slid on Wednesday on worries that the Federal Reserve would be too quick to withdraw its financial supports from the economy.

With major indicators like the Standard & Poor's 500 index up 55.3 percent from a 12-year low in March, market analysts have been saying that a break in the advance is necessary.

"A market can't go straight up. It needs to consolidate. It needs to give people time to digest what's happening," said Samuel Dedio, portfolio manager of the Artio U.S. Smallcap Fund.

At midday, the Dow Jones industrial average fell 30.68, or 0.32 percent, to 9,676.76.

The broader Standard & Poor's 500 index fell 2.98, or 0.28 percent, to 1,047.80, and the Nasdaq fell 11.01, or 0.52 percent, to 2,096.60.

Four stocks fell for every three that rose on the New York Stock Exchange, where volume came to 351.4 million shares compared with 430.7 million shares traded at the same point Thursday.

nvestors looked past an improvement in the Reuters/University of Michigan consumer sentiment index, which rose to 73.5 in September from 65.7 in August. The index stands at the highest level since the start of 2008. That's a welcome sign because more upbeat consumers could be more likely to spend. That could help the economy recover.

Meanwhile, bond prices traded in a tight range. The yield on the benchmark 10-year Treasury note, which moves opposite to its price, slipped to 3.37 percent from 3.38 percent late Thursday.

The dollar mostly fell against other major currencies, while gold prices fell.

Research in Motion fell $13.05, or 15.7 percent, to $70.01.

The Russell 2000 index of smaller companies fell 2.85, or 0.5 percent, to 598.90.

Overseas, Japan's Nikkei stock average fell 2.6 percent. In afternoon trading, Britain's FTSE 100 rose 0.6 percent, Germany's DAX index fell 0.3 percent, and France's CAC-40 lost 0.3 percent.

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