NEW YORK >> Wall Street ended its best two weeks of the year with profit-taking today in a giveback that was inevitable after a spectacular rally that included triple-digit gains in the Dow Jones industrials and Nasdaq composite index. Wall Street takes
By Lisa Singhania
pause after rally
Associated PressAnalysts weren't alarmed by the losses, which amounted to 1 percent or less on each of the three major indexes.
"Investors should be thrilled if the market retreats and gives up only half of the gains we saw in the last few days," said John Forelli, portfolio manager at Independence Investment LLC. "If we then start inching up from there, that would be a definite victory for the market."
The Dow closed down 113.86 at 10,579.85. The blue-chip index ended the week up 452.91 points, or 4.5 percent. Broader indicators also fell. The Nasdaq slipped 18.73 to 2,163.41, giving it an advance of 201.98 or 10.3 percent for the week.
The Standard & Poor's 500 index slipped 10.72 to 1,242.98, ending the week up 59.48 or 5.0 percent.
The NYSE composite index fell 5.48 to 623.35, the American Stock Exchange composite index gained 0.79 to 898.81 and the Russell 2000 index fell 5.69 to 466.71. Decliners led advancers nearly 5 to 3 on the New York Stock Exchange, with 1,871 down, 1,205 up and 208 unchanged. Volume was 1.5 billion shares, matching yesterday's volume. The Treasury's 10-year note was unchanged at 97 25/32; its yield stayed at 5.29 percent. The 30-year bond fell 1/8 to 94; its yield rose 1 basis point to 5.80 percent.
Losses in the pharmaceutical and financial sectors were especially notable. Merck dropped $4.66 to $73.61, or 6 percent, despite reporting quarterly results in line with analysts' expectations. American Express fell $1.46 to $41.50. Industrial and manufacturing stocks also lagged. 3M slid $4 to $112.50. The tech sector, which enjoyed some of the biggest run-ups this week, was more mixed. Hewlett-Packard fell 80 cents to $31.70. But Microsoft, which reported better-than-expected earnings yesterday, rose 98 cents to $69.
Despite the recovery of the past two weeks, the market's big indicators are still registering losses for the year.
Nonetheless, the Dow has surged about 13 percent since reaching its lowest close for the year, 9,389.48, on March 22. The Nasdaq is up 32 percent since it closed at a low of 1,638.80 on April 4, and the S&P 500 has gained nearly 13 percent since its low close of 1,103.25 that same day.
The market began its recovery two weeks ago, with a 402-point gain in the Dow. It suffered some pullbacks, but slowly gained momentum that sharply accelerated Wednesday, when the Federal Reserve unexpectedly lowered interest rates for a fourth time this year.
Analysts say the market's steady progress, combined with its ability so far to keep most of its gains, suggests that the worst may be over. They do warn that more declines are to be expected, and that more companies may have earnings disappointments, but the growing confidence that earnings and stock prices should improve by next year has buyers returning to the market.
"Investors are leaping out on the faith that the economy is going to correct itself and you're going to have a better 2002 even though the near-term earnings and other fundamentals are terrible," said Jon Brorson, director of equities at Northern Trust. "People are afraid they'll miss out if they don't buy now."