Dow falls for fifth day in a row

First time since June 2005

NEW YORK -- Wall Street extended its decline Thursday, dipping lower after the Labor Department said productivity was flat in the third quarter while wages rose nearly 4 percent. The data touched off concerns that the Federal Reserve will continue to wrestle with inflation, possibly raising interest rates again.

The Dow Jones industrial average posted its first five-day consecutive decline since June 2005, after the economic news and amid mixed reports from retailers on October sales, including Wal-Mart, whose forecast for November sales was the worst in a decade.

The economic data, which showed wage pressure was increasing at the fastest rate in 20 years, rattled investors who have grown concerned that the economy might be cooling too quickly. Wall Street wants a gradual slowdown so the Fed will cut interest rates.

The Dow, which fell below the 12,000 benchmark during the session, closed down 12.48, or 0.10 percent, at 12,018.54.

The Standard & Poor's 500 index fell 0.47, or 0.03 percent, to 1,367.34, and the Nasdaq composite index declined 0.33, or 0.01 percent, to 2,334.02.

Declining issues outnumbered advancers by about 9-to-7 on the New York Stock Exchange, where volume came to 1.67 billion shares, compared with 1.80 billion traded Wednesday.

Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.60 percent from 4.57 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 83 cents to $57.88 a barrel on the New York Mercantile Exchange. Oil prices, whose decline had given a boost to stocks during their three-month rally, dropped in recent days but largely failed to prop up investor sentiment in the face of economic news.

Although the markets haven't fallen sharply this week -- the S&P is down the most at 0.73 percent -- the moves are eating into gains seen in a robust October, when the Dow, S&P and Nasdaq each rose more than 3 percent on expectations that a soft landing was indeed under way. The week's trading indicates that investors are feeling less secure about where the economy is headed.

However, some investors viewed Thursday's data as typical of the type of slowdown the Fed envisions. T.J. Marta, economic strategist at RBC Capital Markets, sees the rising labor costs for the third quarter and an upward revision for the second quarter as unnerving to many investors but said the Fed needs to see such evidence to justify a rate cut. "The Fed is trying to engineer a slowdown, so this is all good," Marta said. "The plane is coming in for a landing."

Overseas, Japan's Nikkei stock average closed down 0.15 percent. Britain's FTSE 100 closed essentially flat, Germany's DAX index was down 1.09 percent, and France's CAC-40 was down 1.13 percent.