Dow’s trek toward
10,000 runs into
some resistance

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By Lisa Singhania
Associated Press

Wall Street's efforts to start a new bull market stalled today in an expected pullback as investors sold stocks to preserve profits from their latest rally.

Prices fell despite a better-than-expected Leading Economic Indicators report from the Conference Board. Analysts said the good news wasn't enough to offset doubts that the market's advance might last. They also said some selling was inevitable after such a strong performance.

"There's still little evidence of an economic or business recovery, so this rally has so far been mostly based on expectation. And there's only so much you can invest on expectation before you start to worry you'll lose your profits," said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum.

The Dow Jones industrial average closed down 75.08 to 9,901.38. For a second day, the Dow remained 20 percent above the 2001 low it set on Sept. 21, a gain that fits the technical definition of a bull market. The Standard & Poor's 500 index lost 8.40 to 1,142.66, while the Nasdaq composite index was down 53.91 to 1,880.51.

Declining issues narrowly led advancers on the New York Stock Exchange, with 1,686 down, 1,455 up and 212 unchanged. Trading activity was moderate ahead of the Thanksgiving holiday. Volume came to 1.31 billion compared with nearly 1.30 billion yesterday.

The NYSE composite index fell 1.97 to 582.32, the American Stock Exchange composite index gained 8.26 to 811.03 and the Russell 2000 index fell 3.81 to 453.90.

The Treasury's 2-year note fell 2/32 to 99 20/32; its yield rose 3 basis points to 2.94 percent. The 10-year note fell 17/32 to 101 1/32; its yield rose 7 basis points to 4.87 percent. The 30-year bond fell 1 1/4 to 100 27/32; its yield rose 8 basis points to 5.32 percent.

The losses weren't surprising given the market's recent surge. Investors have been buying gradually since the precipitous selloff that followed the Sept. 11 terrorist attacks. Specifically, market watchers say Wall Street is feeling more optimistic about a business turnaround and the U.S. military victories in Afghanistan has helped restore investors' confidence.

Although the three major indexes have each made double-digit percentage advances in the last two months and have returned to their pre-attack levels, most analysts caution against too much exuberance. They note that much of the recent gain is a rebound from a catastrophic loss, rather than buying on healthy earnings.

Still, there are some encouraging signs. The Index of Leading Economic Indicators, released today, rose 0.3 percent in October. Wall Street had been expecting a flat report, but the report suggested that the economy might be stabilizing. That might make the Federal Reserve less inclined to cut interest rates for the 11th time this year at its next meeting, but analysts were still pleased.

Also today, the Commerce Department reported the U.S. trade deficit narrowed by a record amount in September to $18.7 billion.