US stocks retreat on economic growth worries

NEW YORK, Dec 4, 2007 (AFP) - US shares extended losses at the opening Tuesday as concerns about slowing economic growth damped down optimism about an expected Federal Reserve interest rate cut next week.

In the first five minutes of trade, the Dow Jones Industrial Average dropped 63.40 points (0.48 percent) to 13,251.17 and the Nasdaq composite fell 19.16 points (0.73 percent) to 2,617.97.

The Standard and Poor's 500 broad-market index shed 8.98 points (0.61 percent) at 1,463.44.

"The euphoria over rate cut hopes has worn off," said Dick Green, president of Briefing.com.

The three major indices had closed lower Monday, snapping last week's strong rally, as investors digested data pointing to fresh signs of weak growth, including sluggish manufacturing activity and disappointing US auto sales.

Wall Street expects the Fed to lower its base federal funds rate at a December 11 policy-setting meeting to ease tight credit and a weak housing market that is spilling over into the broader economy.

Speculation is divided over whether the Fed will cut the rate, which stands at 4.50 percent, by a quarter point or a half point.

In a week with scant economic data, the market was focused on Friday's November employment report for guidance about the extent of the economic slowdown.