Wall Street slips as recession worries nag

* Housing starts, consumer confidence fuel early gloom
* Honeywell cuts outlook, leads manufacturers lower
* Dow down 1.4%, S&P down 0.6%, Nasdaq down 0.4%

NEW YORK - US stocks fell on Friday on weakness in manufacturing and financial stocks after bleak data on consumer confidence and construction, but the Dow still snapped a disastrous three-week losing streak with its best weekly gain in more than five years.

It was a week marked by extreme volatility, and Friday's trading was no different, with stocks swinging back and forth between positive and negative territory. A big afternoon rally was snuffed out in the last hour of trading as uncertainty took hold before the weekend.

A rally in energy stocks fizzled late in the day as oil prices settled off their highs for the session.

The Dow Jones industrial average fell 127.04 points, or 1.41 per cent, to 8,852.22, while the Standard & Poor's 500 Index dropped 5.88 points, or 0.62 per cent, to 940.55. The Nasdaq Composite Index slipped 6.42 points, or 0.37 per cent, to 1,711.29.

For the week, the Dow rose 4.8 per cent, its best week in 5-1/2 years, while the S&P 500 had its best week since February with a gain of 4.6 per cent. The Nasdaq rose 4.1 per cent for its best week since early August.

The week featured one of Wall Street's best days ever on Monday, followed by it worst day since the 1987 stock market crash on Wednesday.

On Friday, the government's housing report showed permits for new homes sank to a nearly 27-year low in another sign of deterioration in housing. The Dow Jones home construction index lost 2.2 percent.

Source: Singapore Business Times - 18 Oct 2008