U.S. Stocks Head for Worst Weekly Decline Since January 2003 (Eric Martin)

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U.S. stocks retreated and were headed for their worst week since January 2003 after a fall in consumer confidence added to concern the economy is headed into a recession.

By Eric Martin

March 2 (Bloomberg) -- U.S. stocks retreated and were headed for their worst week since January, 2003, after a fall in consumer confidence added to concern the economy is headed into a recession.

Home Depot Inc., the biggest home-improvement retailer, slumped for a 12th day as data this week showed new-home sales declined the most in a decade. Alcoa Inc., the largest aluminum producer, and Exxon Mobil Corp., the biggest energy company, led the Dow Jones Industrial Average lower on speculation weaker economic growth will reduce demand for metals and oil.

Stocks retreated this week after a plunge in Chinese shares helped spark a worldwide rout. Slowing profit growth, a rise in mortgage delinquencies and signs that U.S. manufacturing is contracting have heightened concern the economy may stagnate.

``Stock prices cannot go up indefinitely,'' said Matthew Kaufler, who helps manage $2.6 billion at Clover Capital Management in Rochester, New York. ``You need to wring a little of the excess out from time to time. It wouldn't surprise me at all that sometime here in 2007 we have a pullback of 10 percent to 20 percent.''

The Standard & Poor's 500 Index slipped 6.86, or 0.5 percent, to 1396.31 as of 12:23 p.m. in New York. The Nasdaq Composite Index fell 19.23, or 0.8 percent, to 2384.98. A rally in American International Group Inc. limited the decline in the Dow average, which decreased 43.42, or 0.4 percent, to 12,190.92.