Dow drops as investors enter week cautiously

NEW YORK (AP) — Stocks fell Monday after more signs of slowing economic growth got investors worried ahead of a key report on jobs later this week.

The Dow fell 140.92, or 1.4 percent, to 10,009.73. The Standard & Poor’s 500 index fell 15.67, or 1.5 percent, to 1,048.92, while the Nasdaq composite index fell 33.66, or 1.6 percent, to 2,119.97.

The Dow Jones industrial average lost ground throughout the day and closed with a loss of 141 points. Other indexes also fell more than one percent. Bond prices rose, sending interest rates lower, as money moved back into the Treasury market.

The latest cause of worry on the economy came in a report early Monday showing that personal incomes rose less than expected in July. That added to a series of discouraging reports suggesting that growth could slow down in the second half of the year.

“The personal income report did little to ease the nervousness about the trajectory of the economy,” said Alan Gayle, senior investment strategist at RidgeWorth Investments. The report did show spending was up in July, but without consistent growth in income, any increase in spending is likely temporary, Gayle said.

Investors have been focusing on employment data as a way of predicting where the economy is going. Signs of a slowdown in growth has plagued the market for more than a month. Investors are unsure if companies will be able to keep up strong earnings growth if the recovery runs out of steam or falls back into recession. And consumers aren’t likely to spend more until there are clear and regular signs of hiring.

“You have to prepare for slower growth,” said Mark Tepper, managing partner at Strategic Wealth Partners. “As consumer spending goes down, businesses will experience lower earnings.”

Investors have been betting in recent weeks that the weaker economic reports will translate into smaller earnings that previously thought. That, in turn, has helped drive stocks lower to match the diminished expectations.

About four stocks fell for every two that rose on the New York Stock Exchange, where volume was very light at 820 million.

The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.53 percent from 2.65 percent late Friday. That yield helps set interest rates on mortgages and other consumer loans.