Stocks pull back after grim report

The stock market pulled back Wednesday after a second consecutive drop in orders for durable goods generated more pessimism about the economy. Investors also were rattled as oil jumped back above $105 a barrel.

The Dow Jones industrial average fell nearly 110 points.

The Commerce Department reported that orders for big-ticket items such as refrigerators, cars and computers fell 1.7% in February after a 4.7% decline in January, adding to worries about the financial health of companies and consumers.

Considering that the Dow had added more than 425 points in the previous three sessions, a pullback wasn’t a surprise. But the question for Wall Street now is whether economic data still to come this week on unemployment claims, gross domestic product and personal spending will further erode or rekindle the market’s recent rally.

“I think the market has done a decent job of trying to find a bottom in the last few days, and that’s certainly an encouraging sign,” said David Joy, market strategist at Ameriprise Financial Inc.’s RiverSource Investments. “But I don’t think there is by any means a general reemergence of confidence in this market.”

The Dow fell 109.74 points, or 0.9%, to 12,422.86, after being down as much as 155 points during the session.

The Standard & Poor’s 500 index slumped 11.86 points, or 0.9%, to 1,341.13, while the Nasdaq composite index slid 16.69 points, or 0.7%, to 2,324.36.

The Russell 2,000 index of smaller-company stocks lost 3.16 points, or 0.4%, to close at 702.11.

Declining issues led advancers by 5 to 3 on the New York Stock Exchange.

Yields on government bonds fell along with stocks. The yield on the benchmark 10-year Treasury note slid to 3.46% from 3.51% late Tuesday.

In currency trading, the euro zoomed to a record high of $1.582 from $1.56 on Tuesday, after surveys of business confidence in Germany and France showed surprising strength this month -- in sharp contrast to the increasingly downbeat economic data from the U.S.

Gold soared for a second day as the dollar weakened, rising $14.40 to $949 an ounce.

Oil prices jumped after the Energy Department said that the nation’s inventory of crude oil, gasoline and distillate fuels was smaller than expected last week. Crude futures shot up $4.68 to finish at $105.90 a barrel on the New York Mercantile Exchange.

Citigroup led financial stocks in the S&P; 500 to a 3.5% decline after Oppenheimer & Co.’s Meredith Whitney said the company’s first-quarter loss would be four times her previous forecast. Shares of the largest U.S. bank by assets lost $1.37, or 5.9%, to $22.05.

Bank of America fell $1.13, or 2.8%, to $39.84, after Goldman Sachs analysts, predicting a $3-billion first-quarter write-down by the company, reduced their estimate of its 2008 earnings to $3.35 a share from $4.05.

JPMorgan Chase slumped $1.95, or 4.2%, to $44.11.

Clear Channel Communications tumbled $5.64, or 17%, to $26.92. The Wall Street Journal said banks that committed to finance a $19.5-billion buyout of the radio giant hadn’t been able to reach agreement on terms with the private-equity buyers. After the market closed, the private equity firms sued the banks. Clear Channel rose to $29 after hours.

In other market highlights:

Among Southland issues, Ameron International plummeted $31.30, or 25%, to $91.49 a day after hitting a record high. The Pasadena-based supplier of fiberglass and concrete pipes for industrial and infrastructure uses reported quarterly earnings of $1.07 a share, up from 94 cents a year earlier but short of analysts’ consensus estimate of $1.30.

In the restaurant sector, California Pizza Kitchen slid 66 cents to $13.49, and P.F. Chang’s China Bistro slumped $2.74 to $28.01. Los Angeles-based brokerage Wedbush Morgan initiated coverage of the stocks with “sell” ratings. Wedbush analyst Brian Moore forecast weak near-term earnings growth for the chains in part because he expected many consumers to shift to lower-priced restaurants.

Jabil Circuit plunged $2.09, or 18%, to $9.29 after the maker of electronic parts posted a fiscal second-quarter loss and warned its third-quarter results would fall short of expectations.

Stocks fell overseas. Key indexes declined 0.3% in Japan, 0.3% in France and 0.5% in Britain and Germany.