Stocks Decline at the End of a Strong Month

Stocks sagged Tuesday as sliding consumer confidence trumped the latest report on U.S. gross domestic product, which grew at a faster pace than expected in the third quarter. Still, the major indexes ended November with their best monthly gains of the year.

In other trading, long-term bond yields rose further while the dollar was mixed.

Worries about the disappointing opening weekend of the holiday shopping season were compounded by the Conference Board’s report Tuesday that its index of consumer confidence fell in November for a fourth straight month.

Retail stocks were mostly lower, pulling the broad market down. But analysts said the losses were modest overall and weren’t unusual ahead of the final month of trading.

“December has been a strong month for the market historically ... but late November and early December is often a period when you see a pause to refresh,” said Alfred E. Goldman, chief market strategist with A.G. Edwards & Sons.

The Dow Jones industrial average fell 47.88 points, or 0.5%, to 10,428.02, slipping back into negative territory for the year.

The Standard & Poor’s 500 index shed 4.75 points, or 0.4%, to 1,173.82. The Nasdaq composite fell 10.06 points, or 0.5%, to 2,096.81.

Decliners outnumbered advancing issues by about 5 to 4 in active trading on the New York Stock Exchange and on Nasdaq.

Despite the day’s losses, November was a great month for stocks, with the Dow posting a 4% advance, the S&P; adding 3.9% and Nasdaq surging 6.2%.

It was the best performance of the year for all three indexes.

Brisk consumer and business spending helped the nation’s GDP grow at an annualized rate of 3.9% during the third quarter, stronger than previously thought, the government said Tuesday. U.S. exports, buoyed by a weaker dollar, also contributed to economic growth.

The latest GDP growth reading was a significant pickup over the second quarter’s 3.3% pace.

But the report on consumer confidence raised questions about the trend in holiday spending.

Energy prices have fallen from their peaks in October but remain relatively high, taking more money out of consumers’ wallets. Oil, which hit a record high of just above $55 a barrel in late October, has hovered near $50 recently.

Crude futures slid 63 cents to $49.13 a barrel in New York trading Tuesday, after Saudi Arabia on Monday said it would raise its production capacity in the next few years.

For Wall Street, “the benchmark now for most people is $50 a barrel.... That’s the world we’re living in today,” said Thomas F. Lydon Jr., head of Global Trends Investments in Newport Beach. “As long as oil is under that benchmark, I think most people on Wall Street are pretty comfortable.”

In other market highlights:

* The yield on the 10-year U.S. Treasury note rose for the fifth straight session, as the GDP data reflected an economy still strong enough to allow the Federal Reserve to continue raising interest rates into the new year. The T-note ended at 4.35%, up from 4.32% on Monday, after trading as high as 4.39%.

* The dollar weakened again against the euro, to $1.328, but gained against the yen. The dollar has been bedeviled of late by concern over the U.S. trade and budget deficits. Gold fell $2.40 to $451.30 an ounce in New York futures trading.

* Retail stocks sagged after three sales benchmarks indicated a slow start to holiday shopping. Wal-Mart fell $1.09 to $52.06, Home Depot sank $1.19 to $41.75, Target shed 68 cents to $51.22 and Federated Department Stores lost $1.83 to $54.80.

* Chip stocks were hurt by a Merrill Lynch report that said Intel might trail forecasts as the company attempts to reduce inventory levels. Intel, which gives a mid-quarter update Thursday, fell 68 cents to $22.38. National Semiconductor lost 44 cents to $15.46 and Texas Instruments gave up 39 cents to $24.18.

* Winn-Dixie Stores tumbled 41 cents, or 9.3%, to $4, the steepest decline in the S&P; 500. The supermarket operator will be removed from the benchmark and replaced by Freescale Semiconductor, the chip-making unit being spun off by Motorola. The change will take place after the close of trading Thursday.

* Healthcare insurers and service providers advanced after Anthem completed its $21-billion purchase of Thousand Oaks-based WellPoint Health Networks. Anthem gained $1.73 to $101.33 and WellPoint climbed $2.08 to $125.10. Pacificare Health Systems picked up 55 cents to $48.40, and Wellchoice added 64 cents to $48.99.