NEW YORK -- U.S. stocks fell yesterday for a fourth day amid concern a report on employment due today will show the economy is growing too fast, raising the specter of rising inflation and higher interest rates.
"People aren't as optimistic anymore that we've seen the peak in rates," said Kenneth G. Tower, vice president and technical analyst at UST Securities Corp., a unit of U.S. Trust Corp., which has $31 billion in assets.
The Dow Jones industrial average fell 11.78, to 3,775.56, its lowest close since reaching 3,751.22 on Aug. 22. The benchmark average has fallen 67.63 points, or 1.8 percent, so far this week. For a second day, the decline was led by so-called cyclical issues -- stocks sensitive to swings in the economy. General Motors Corp. slid $1.625, to $44; International Paper Co. tripped $1.125, to $76.375; and J. P. Morgan & Co. lost $1, to $59.25.
The Standard & Poor's 500 index slipped 1.16, to 452.36, its lowest since 451.60 on July 20. Shares of automakers, retailers and computer software companies fell the most.
If the report on September employment shows the economy added more than the 254,000 jobs analysts expected, the Fed could move to rein in economic growth by raising rates, analysts said. The central bank has raised rates five times this year, boosting the fed funds rate on overnight bank loans to 4.75 percent from 3 percent.
"If you get real good employment, that's a bad indicator of what will happen in the next three to six months," said Bill Langevin, manager of institutional trading at Morgan Keegan Inc. in Memphis, Tenn.
Too-rapid growth in the economy is associated with accelerating inflation, which usually leads to higher interest rates. Rising rates make fixed-income investments more attractive relative to stocks and raise the borrowing costs of consumers and corporations, ++ eventually slowing down corporate profits.
Shares of Apple fell $1.625, to $36.25, after rallying $4.125 Wednesday amid speculation the company may be the subject of a takeover or major investment by Motorola Inc. Both companies declined to comment on the speculation.
Declining stocks led advancers 11-to-9 on the New York Stock Exchange, where only about 271 million shares traded hands. The three-month daily average volume is 277 million shares.
Shares of retailers declined after companies reported sluggish September same-store sales. Analysts said hot weather discouraged consumers from buying warm clothing and other fall and winter goods.
TJX Cos. said sales at stores open at least a year fell 4 percent, Filene's Basement Corp. said its sales slipped 7 percent and Buckle Inc. said sales slid almost 10 percent last month.
The S&P; index of general merchandise retailers fell 0.81, to 45.11, led by Wal-Mart Stores Inc., which slumped 50 cents, to $22.75. The apparel retailers' index fell 4.40, to 259.45, led by TJX's $2.375 decline, to $17.875.
Concerns that the economy is growing too fast are rooted in recent reports ranging from consumer spending to single-family home sales. On Wednesday, the Commerce Department said factory orders rose a larger-than-expected 4.4 percent in August.
Richard Cripps, director of equity marketing at Legg Mason Inc., said if the Fed raises rates today, its aim will be more to reinforce the perception it's vigilant in fighting inflation than to slow the economy. Yesterday's retail sales numbers provide evidence the economy is not overheating, he said.