Wall Street Falters

Stocks fell for a third straight session after housing and industrial production data added to fears of further economic weakness. Housing starts dropped 10.6% to an annual rate of 523,000 in April. Economists had expected a rise to 575,000.

U.S. industrial production was flat in April; a surprise to economists, who had expected a 0.3% gain. Adding to a sense of weakness, industrial production in February was revised to a 0.3% drop from the previous estimate of a 0.1% increase, and output in March was trimmed from a 0.8% to a 0.7% gain.

The Dow closed today at 12,480, the S&P 500 at 1,339, and the NASDAQ at 2,783. The FOX Index is now down to +792 (chart), back below +1,000, and below its early May peak of +1,335 (the Index is less than three years old). Still, the Index remains “healthy,” defined as above 15,800, a total formed from adding a Dow of 12,000, an S&P 500 of 1,300, and a NASDAQ of 2,500.