I totally predict this one WRONG! Crap~~

Stocks Retreat After Home Sales Data
Thursday May 24, 1:27 pm ET
By Joe Bel Bruno, AP Business Writer Wall Street Retreats As Investors Worry Interest Rate Cut Not Needed After Economic Data NEW YORK (AP) -- Wall Street retreated Thursday after new housing data showed sales surged in April by the largest amount in 14 years, dampening hopes that an interest rate cut would be needed to stimulate the economy.

Investors were originally enthusiastic after the Commerce Department reported sales of single-family homes rose 16.2 percent last month after falling slightly in March. Although the average prices of homes plunged, the report still showed the economy continues to show signs of expansion.

The report followed data released by the Commerce Department earlier Thursday that showed sales of big-ticket manufactured goods posted a modest increase in April, indicating a continued rebound in business spending. The durable goods report suggested U.S. companies are in the midst of growing, and aren't afraid to spend money to do so.

With first-quarter earnings reports mostly over, Wall Street is placing increased significance on data as a catalyst for stocks. The reports on Thursday suggest that perhaps the Federal Reserve has steered the economy toward a soft landing, and that a rate cut might not be needed.

"Sometimes good is bad," said Scott Fullman, director of investment strategy for Israel A. Englander & Co. "This takes away the anticipation that the Fed is going to ease interest rates because of the housing market."

He also said that after a months-long run, and before a three-day holiday weekend, that investors were taking a breather to collect profits.

In early afternoon trading, the Dow Jones industrial average fell 23.16, or 0.17 percent, to 13,502.49. The blue chip index rose as high as 13,624.55 during the session -- eclipsing its previous trading high of 13,609.75 reached on Wednesday.

Broader stock indicators fell. The Standard & Poor's 500 index fell 7.66, or 0.50 percent, to 1,514.62, and the Nasdaq composite index fell 26.86, or 1.04 percent, to 2,550.19.

Bonds fell sharply, with the yield on the benchmark 10-year Treasury note rising to 4.89 percent from 4.86 percent on Wednesday.

Oil prices backed off a nine-month peak reached on Wednesday as traders weighed a rebound in U.S. crude inventories last week. A barrel of light, sweet crude fell $1.04 to $64.73 on the New York Mercantile Exchange.

The dollar was higher against most other major currencies, while gold prices declined.

In addition to durable goods and new home sales, Wall Street received a weekly Labor Department report showing the number of newly laid off workers filing for unemployment benefits rose slightly last week -- but was still at a level reflective of a healthy labor market.

The economic reports failed to give Wall Street a sustained push. All three major indexes have been under pressure this week, especially on Wednesday when former Federal Reserve Chairman Alan Greenspan said he expects a contraction in China's markets.

His comments Wednesday caused stocks to reverse gains and close lower. They also caused declines in Asian markets -- particularly in China, which reached record levels this week.

On Thursday, China's two biggest stock indexes closed lower as the market regulator issued another warning about market risks, with auto and power stocks losing ground. The benchmark Shanghai Composite Index closed down 22.58 points at 4,151.13; the Shenzhen index fell 32.80 points to 711.17.

Elsewhere overseas, Japan's Nikkei stock average fell 0.05 percent. Britain's FTSE 100 fell 0.77 percent, Germany's DAX index fell 0.50 percent, and France's CAC-40 fell 1.17 percent.

In corporate news, housing stocks were among the markets best performers as the Commerce Department data showed sales ramped up last month, even if prices fell. Even Toll Brothers Inc. -- which reported second-quarter profit fell sharply and did not provide an outlook -- rose 32 cents to $30.09.

Takeover activity also was a factor, with Bausch & Lomb up $3.15, or 4.7 percent, at $69.60 after Advanced Medical Optics confirmed it launched a takeover bid. Last week, Bausch & Lomb agreed to be acquired by Warburg Pincus for about $3.67 billion.

Advanced Medical shares tumbled $1.62, or 3.8 percent, to $40.82.

Network Appliance Inc. fell $5.51, or 14.5 percent, $32.55 after the storage technology company reported a slowdown in March will cause it to report weaker-than-expected results for the second quarter.

Mylan Laboratories Inc. posted a fiscal fourth-quarter loss after it was hurt by items related to its takeover of Matrix Laboratories Ltd. Shares fell 52 cents, or 2.6 percent, to $19.72.

The Russell 2000 index of smaller companies fell 10.79, or 1.29 percent, to 825.75.