Profit-taking
pushes down stocks

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By Hope Yen
Associated Press

NEW YORK >> Wall Street retreated today, sending the Dow Jones industrials down 180 points as investors cashed in their winnings from the stock market's two-day rally. Still, the market's major indexes secured their third straight weekly advance, a feat not seen in nine months.

Renewed questions about corporate impropriety, this time involving Citigroup and AOL Time Warner, pressured stocks. So did news that two brokerages cut revenue estimates for several semiconductor companies.

But the market was mostly feeling the brunt of profit-taking, analysts said.

"It's more a consolidation kind of day," said Bryan Piskorowski, market commentator at Prudential Securities.

Declining issues outnumbered advancers more than 2 to 1 on the New York Stock Exchange. Volume was light.

The Dow closed down 180.68, or 2 percent, at 8,872.96. The drop erased a two-day gain of 181 points that pushed the index to 9,053.64 yesterday, the first time it closed above 9,000 since July 9.

The broader market was also lower. The Nasdaq composite index fell 42.33, or 3 percent, to 1,380.62. The Standard & Poor's 500 index slipped 21.84, or 2.3 percent, to 940.86. The Russell 2000 index fell 9.54, or 2.3 percent, to 400.13.

The price of the Treasury's 10-year note was up 11/16 point today, while its yield fell to 4.23 percent from 4.31 percent late yesterday. Two-year Treasury notes were up 1/8 point and yielded 2.14 percent, down from 2.20 percent yesterday.

Analysts said investors have been more optimistic after three straight weeks of gains among the Dow, Nasdaq and S&P , which hasn't happened since the three-week period ending Nov. 23.

Such a feat is impressive, analysts say, particularly since August typically underperforms other months and has mostly lacked significant good news to trigger a rally.

The Dow has risen 10.6 percent since July 19, the last time it had a losing week. The Nasdaq composite has gained 10.6 percent and the S&P 500 index advanced 8.9 percent since Aug. 2, when they last posted weekly losses.

Still, analysts say the markets remain vulnerable to bursts of profit-taking until investors have more concrete evidence that an economic turnaround is under way. Questions also linger about corporate corruption, they said.

"The market is still working on building some confidence here. We don't have it yet," said Bob Dickey, managing director of technical analysis at RBC Dain Rauscher.

"People are looking ahead with fear to the months of September and October, which historically have not been good months for the market," he added. "But after June and July were deeply negative, I'm not sure if we're going to see any serious declines."

Questions about possible corporate improprieties weighed on several companies, including Citigroup, which fell $1.18 to $34, on a report in The Wall Street Journal that the New York attorney general's office was widening its probe into research practices at Salomon Smith Barney by examining how Citigroup won a lucrative financing deal from AT&T.

AOL Time Warner slipped $1.31 to $12.76, on reports that the largest portion of $49 million in questionable ad revenue being investigated by the Securities and Exchange Commission involved dealings with now-bankrupt WorldCom.

The semiconductor industry was also hurt after Bear Stearns lowered third-quarter estimates for Intel and Banc of America Securities cut its revenue outlook on several others. Intel fell $1.19 to $17.96, while Applied Materials dropped $1.09 to $15.08 and Advanced Micro Devices slid 74 cents to $9.67.

Gainers included chipmaker Marvel Technology, which rose $3.23 to $22.21, after raising its outlook for the rest of the year .

Overseas, Japan's Nikkei stock average finished 0.54 percent higher. In Europe, France's CAC-40 fell 1.9 percent, Britain's FTSE 100 declined 1 percent, and in late afternoon trading, Germany's DAX index was down 2 percent.