Bullish Compaq fails
to lift market

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By Lisa Singhania
Associated Press

NEW YORK >> A stronger-than-expected forecast from Compaq Computer failed to incite buying on Wall Street today as investors, playing it cautious, decided to collect some of their profits from last week's rally.

The market drifted lower in quiet selling that analysts said was not surprising given stocks' recent gains. Although investors are becoming more confident that business is improving, they are still concerned about the near future and questioning whether stock prices are rising too quickly.

"This is just a little consolidation after two vigorous days last Thursday and Friday on the market," said Ralph Acampora, director of technical research at Prudential Securities. "This is a pause that refreshes, nothing more."

The Dow Jones industrial average closed down 62.69, or 0.6 percent, at 10,197.05, snapping a three-session winning streak.

Broader stock indicators also struggled. The Standard & Poor's 500 index fell 7.62, or 0.7 percent, to 1,164.89, while the Nasdaq composite index lost 22.27, or 1.1 percent, to close at 2,037.11.

The Russell 2000 index dropped 6.11 to 493.19. Declining issues narrowly led advancers on the New York Stock Exchange, with 1,682 falling, 1,467 rising and 188 unchanged. Volume came to 1.29 billion shares, compared with 1.51 billion at the same point Friday.

The NYSE Composite Index fell 3.42 to 593.15. The American stock Exchange Composite Index fell 4.11 to 837.33.

The price of the Treasury's 2-year note rose 5.32 to 100 - 11/32, with its yield falling 9 basis points to 3.061. The 10-year note rose 17/32 to 99 - 18/32, with its yield falling 7 basis points to 5.055. The 30-year note rose 23/32 to 98 - 8/32; its yield fell 5 basis points to 5.495.

Compaq rose 29 cents to $11.68 after issuing a statement that its fourth quarter would be profitable and the results would exceed existing estimates. Analysts had predicted a loss for the computer maker, but because investors didn't view Compaq as a high-tech bellwether, the news failed to spark a rally.

"Anything that this particular company says is probably not easily going to be extrapolated toward the rest of the tech sector," said Charles G. Crane, strategist for Victory SBSF Capital Management. "This particular stock doesn't have a halo effect on the rest of the market."

Other tech issues were mixed. Microsoft fell 34 cents to $68.56, while Gateway advanced 43 cents to $10.25.

In the broader market, General Electric fell $1.59 to $39.36, while Boeing climbed 64 cents to $41.

Retailer Circuit City advanced $2.29 at $29.75 after reporting December sales at its electronics stores open at least a year rose 10 percent and that fourth-quarter results should be better than expected.

The market has been moving solidly higher since the new year, with the most noticeable gains in the technology sector. That advance caps a dramatic rebound during the last three months of 2001 from the precipitous selloff that followed the Sept. 11 terror attacks.

Analysts say the key factors for a recovery appear to be coming together. Economic data is stabilizing and the tone of corporate forecasts is more upbeat. Still, many on Wall Street remain cautious. January is historically a good time for the market, and corporate forecasts overall are murky.

Overseas, Japan's Nikkei stock average rose 0.7 percent. In Europe, Germany's DAX index lost 1.5 percent, Britain's FT-SE 100 dropped 0.6 percent, and France's CAC-40 slipped 1.4 percent.