NEW YORK >> Stocks retreated today as investors, still nervous about how companies will perform in the uncertain economic climate, cashed in on this week's brief rally in the technology sector. Weeklong rally
runs out of gasStar-Bulletin wire services
The slight setback after several days of gains was to be expected considering a lingering mentality on Wall Street in which traders feel compelled to pocket profits after market upticks.
"We were up 41/2 percent over the past week and a half, and in this environment that's considered overbought," said Steven Goldman, market strategist at Weeden & Co. in Greenwich, Conn.
The Dow Jones industrial average fell 38.40 to 10,512.78 in relatively light summertime trading. For the week, the Dow still had a gain of 96.11, or less than 1 percent.
Broader stock indicators also fell. The Nasdaq composite index dropped 21.05 to 2,066.33, while the Standard & Poor's 500 index fell 6.40 to 1,214.35.
For the week, the Nasdaq rose 37.26, or 1.8 percent, while the S&P 500 was up 8.53, or less than 1 percent.
So far in 2001, the Dow is down 2.5 percent, the S&P 500 is off 8 percent and the Nasdaq is under water by 16.4 percent.
Decliners led advancers today by a small margin on the New York Stock Exchange, with 1,586 down, 1,448 up and 253 unchanged. Volume was 929.12 million shares vs. 1.22 billion shares yesterday.
The NYSE composite index fell 2.09 to 616.31, the American Stock Exchange composite index lost 4.29 to 887.38 and the Russell 2000 index dropped 1.87 to 487.12.
The Treasury's 10-year note fell 3/32 to 9835/32; its yield rose 1 basis point to 5.16 percent. The 30-year bond fell 3/32 to 9631/32; its yield gained 1 basis point to 5.59 percent.
Chip stocks fell after the sector got a lift Wednesday and yesterday following comments by semiconductor makers and upgrades by Merrill Lynch. The sector was one of the first to fall last year, when the market's downturn began, and any signs of a revival have been short-lived.
"You had a nice run in the Nasdaq over the last couple of days and now you're seeing some profit taking," said Richard A. Dickson, a technical analyst at Hilliard Lyons in Louisville, Ky.
Despite the market's modest overall gains for the week, Dickson said investors shouldn't read too much into the momentum that propelled stocks up and generally kept them there despite today's pullback.
"There are no firm drivers in the market right now," he said.
Intel dropped 41 cents to $31.68. Other tech stocks were weaker as well; IBM dropped 62 cents to $108.18, Dell Computer fell 36 cents to $28.07 and Cisco Systems, which repeats earnings after the market closes on Tuesday, fell 20 cents to $20.05.
Disney rose 10 cents to $26.60 after the company reported earnings that beat analysts' expectations. Dial rose 59 cents, or 3.5 percent, to $17.44 after the company said it would be in its best interests to be bought by a larger firm.
Trading was unaffected by a Labor Department report today that said the unemployment rate was unchanged at 4.5 percent. Analysts thought it would climb to 4.7 percent because of the economic slowdown. Businesses eliminated 42,000 jobs in July after a loss of 93,000 in June.
Today's mood on Wall Street was a shift away from the optimism that ruled for much of the week, when traders sent the Dow up 1.4 percent from Monday through yesterday. The Nasdaq rose 3.4 percent during the same period.
Analysts cautioned today that companies are still having a tough time weathering the sluggish economy.
"Maybe we are starting to stabilize, but you still have a lot of skittishness any time the market pokes its head up," Goldman said.
Economists still expect Fed officials, who meet Aug. 21, to lower the target for overnight bank loans by a quarter-point this month to revive economic growth. It would be the seventh reduction this year, leaving the target at 3.5 percent.
Overseas, Japan's Nikkei stock average dropped 1.3 percent. European stocks also fell. Germany's DAX index dropped 0.7 percent, Britain's FT-SE 100 fell 0.7 percent, and France's CAC-40 was down 1.1 percent.