Wall Street fluctuates on weak economic data; investors hold back

Wall Street fluctuated Tuesday, as investors refrained from making big bets in a volatile market battered by a stream of weak economic data.

The market, which has closed lower in four of the past five sessions, has been turbulent amid worries about how long a recession might be. That’s driven many retail investors to the sidelines, while big institutional traders like hedge funds keep major stock indexes vacillating.

Stocks have been trading erratically for several weeks as investors try to gauge the direction of the economy – and there was more bad news on Tuesday, which made it difficult for Wall Street to hold on to the day’s early advance. The government reported that wholesale prices plunged a record amount in October, a drop that could indicate a rising threat of deflation.

Many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades. However, the expectation is that easing inflation pressures will give the Federal Reserve room to cut interest rates further to combat the downturn.