NEW YORK >> An expected bout of profit-taking and a larger-than-expected decline in consumer confidence pressured stocks today, but the market still managed to hang on to most of its huge rally. Tech stocks had a small advance while blue chips dipped lower. Market mixed
on profit-takingBy Lisa Singhania
Associated PressAnalysts said that although investors are still wary that stocks will fall back again, they were reassured by news that President Bush had signed into law legislation that toughens penalties for corporate fraud.
"This pullback that we're getting is great. This is not panic, just a healthy rest," said Ralph Acampora, director of technical research at Prudential Securities. "At least on a short-term basis we're starting to feel better."
Advancing and declining issues traded nearly evenly on the New York Stock Exchange. Volume was brisk.
The Dow Jones industrial average closed down 31.85, or 0.4 percent, at 8,680.03, after alternating between gains and losses for much of the day. In the last five sessions, the Dow has regained 977.69 of the 2,650.74 points lost in more than two months of selling.
Broader stock indicators closed modestly higher. The high-tech focused Nasdaq composite index advanced 8.93, or 0.2 percent, to 1,344.18, while the Standard & Poor's 500 index rose 3.82, or 0.7 percent, at 902.78. The Russell 2000 index rose 0.10 to 400.91.
The price of the Treasury's 10-year note was down 3/16 point today, while its yield rose to 4.59 percent from 4.56 percent late yesterday. Two-year Treasury notes fell 1/16 point and yielded 2.43 percent, up from 2.40 percent yesterday.
Stocks fluctuated throughout the session as investors alternated between optimism and pessimism about the prospects for more gains.
A weaker-than-expected reading in the Conference Board's consumer confidence index contributed to the selling. The index fell to 97.1 in July from a revised 106.3 in June -- its lowest level in five months and well below the 101.5 analysts forecast. The Conference Board said the decline reflected worries about the struggling stock and job markets.
The figure is closely watched since consumer spending, which accounts for two-thirds of the economy, is viewed as crucial to a recovery.
Wall Street was cheered, however, by the bill signed into law by President Bush. The legislation, prompted by a string of accounting and ethics scandals at companies including Enron and WorldCom, strengthens penalties for corporate wrongdoing. It also requires top executives to vouch personally for the accuracy of their companies' reports.
Still, there were doubts the market would be able to sustain its advance, and stocks tended to succumb to selling whenever they made a moderate advance.
Analysts also hesitated to say a turnaround had begun. They noted that numerous rallies have fizzled during the past two years, and that could still happen to this one.
"The market is taking a pause today," said Tom Galvin, chief investment officer at Credit Suisse First Boston. "We're still at a very early stage of trying to define and solidify a market bottom."
Merrill Lynch rose 25 cents to $36.50 after the brokerage firm denied it knowingly helped Enron distort its financial problems. In a statement submitted to a Senate subcommittee investigating the matter, the company defended its actions as appropriate.
Financial stocks were mixed. Citigroup rose 64 cents to $33.95, while J.P. Morgan Chase slipped 21 cents to $24.89.
Among tech stocks, Intel rose 8 cents to $18.97 and Ciena slipped 4 cents to $4.21.
Overseas, Japan's Nikkei stock average rose 3.5 percent. In Europe, Germany's DAX index advanced 0.5 percent, Britain's FTSE 100 slipped 0.5 percent, and France's CAC-40 lost 0.5 percent.