Wall Street recap

Stocks take tumble as sales of new homes fall

NEW YORK Signs of a weaker housing market and a gloomier outlook on the economy gave investors more reasons to dump stocks.

Major market indexes fell by the largest amount in about a month yesterday after the Commerce Department said newhome sales dropped for the first time in five months. Sales slid 3.6 percent in September to 402,000. Analysts had expected an increase.

The Dow Jones industrial average fell 119.48, or 1.2 percent, to 9,762.69. The index has been down in five of the past seven days, and yesterday was its third straight triple-digit drop.

The retreat came as Goldman Sachs Group Inc. reduced its expectation for the nation's economic output for the July-September period. Goldman Sachs predicts third-quarter gross domestic product rose at an annual rate of 2.7 percent, weaker than its earlier forecast of 3 percent. The government's report on third-quarter GDP is due today.

Financial stocks fell after GMAC Financial Services brought reminders of troubles still hitting many lenders. The former financing arm of General Motors Co. is in talks with the Treasury Department for a third bailout.

Home-builders fell after the sales data. Hovnanian Enterprises Inc. slid 41 cents, or 9.5 percent, to $3.89. Toll Brothers Inc. fell 99 cents, or 5.5 percent, to $16.95.