Nasdaq hits another
high; Dow falls shy

The tech-heavy index posts
its 5th straight record while
the blue chips end off 7.21

NEW YORK -- Blue-chip stocks beat back a bout of profit taking from yesterday's record run and technology stocks led the Nasdaq composite index to its fifth straight record today on Wall Street.

A late-afternoon rally helped the Dow Jones industrial average recover from an earlier 118-point drop. The index of 30 blue-chip stocks ended the day off 7.21 points to close at 9,537.76.

Some investors were selling shares to lock in profits after the Dow leaped 233.78 points yesterday to a record-high 9,544.97 in the third day of a New Year's buying spree.

The market was also slightly spooked after Goldman Sachs & Co. market strategist Abby Joseph Cohen, a noted bull, slightly lowered her recommendation for the percentage of stocks investors should hold in their portfolios.

"Equity valuation is less attractive today than in September, when stock prices were roughly 30 percent lower," Cohen wrote to Goldman Sachs' clients.

"But we do not view valuation as excessive nor as an impediment to higher stock prices."

Cohen recommended investors trim their exposure to stocks to 70 percent from 72 percent.

But Cohen's slightly pessimistic turn could not slow the seemingly unstoppable rally in technology stocks. The technology-heavy Nasdaq composite index rose 5.23 points to close at 2,326.09, its fifth straight closing record.

Decliners led advancers by a 3-to-2 margin on the New York Stock Exchange, with 1,137 up, 1,956 down and 479 unchanged. NYSE volume totaled 850.89 million shares vs. 976.33 million yesterday. Other broad-market indexes were mixed.

The Standard & Poors 500 index fell 2.60 to 1,269.74; the NYSE composite index dropped 1.82 to 609.19; the American Stock Exchange rose 2.51 to 703.98; and the Russell 20000 gained .04 to 427.83.

In London, profit-takers pushed share prices down, despite a modest interest rate cut. The Financial Times-Stock Exchange 100-share index fell 47.6 points, or 0.8 percent, to 6,101.2, after jumping 3.2 percent yesterday.

"After a day like yesterday, I expect we'll see a day of consolidation today," said Paul Nesbitt, a technical strategist at broker T. Hoare and Co.

Traders were looking for an announcement of a rate cut, and the Bank of England delivered one at midday, cutting a key lending rate to 6 percent from 6.25 percent.

Other European markets also ended lower. Key market indicators fell 1.5 percent in Paris, 1.8 percent in Frankfurt and 3.9 percent in Amsterdam.

The downturn in Europe came after Asia markets rallied in reaction to yesterday's gains on all Street.

Japan's 225-stock Nikkei index was up 2.4 percent at midday, but closed just 0.51 percent higher at 13,536.56. Singapore's Straits Times Index closed up 3.6 percent at 1,1517.88, and the Hang Seng Index in Hong Kong was up 4.5 percent to 10,693.57.

"Happy days are here again," said Francis Lun, the research manager of Pacific Challenge Securities Ltd. in Hong Kong.

Whether that will continue is another question. Ever since the Asian financial crisis began in 1997, with wild fluctuations in currencies and stocks, the region's markets have often imitated good days on Wall Street, only to see their gains soon fade away, due to profit-taking and more bad economic news.