U.S. Stocks Drop, Completing Longest Losing Streak Since 2002

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U.S. stocks fell this week, capping the fourth-straight monthly decline, after analysts boosted estimates for losses at banks and speculation increased that rising unemployment and lower manufacturing are pushing the economy into recession.

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Nine of 10 industries in the S&P 500 declined after reports showed the U.S. economy grew less in the fourth quarter than economists forecast and business activity fell to the lowest since 2001. Investors speculated that five interest-rate cuts by the Federal Reserve since September will fail to prevent a contraction in the world's largest economy.

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Fed Chairman Ben S. Bernanke signaled this week that the central bank is prepared to lower rates further even as rising commodity prices boost inflation. Crude oil reached a record $103.05 a barrel in New York yesterday. Bernanke signaled the decline in the dollar may help the economy, pushing the currency to the lowest level in three years versus the yen and the weakest ever against the euro.

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``We're in a little-to-no-growth economic environment,'' said Chris Hagedorn, a Cincinnati-based portfolio manager at Fifth Third Asset Management, which oversees about $22 billion. ``We actually expect the market to be choppy in the near term, but we do think there's potential for market recovery toward the latter half of the year.''

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Reports next week on manufacturing and employment will give investors more clues on the outlook for U.S. growth and rates. The Institute for Supply Management may say manufacturing contracted in February, according to economists surveyed by Bloomberg. The Labor Department will probably report that the unemployment rate rose by 0.1 percentage point to 5 percent in February, economists said.