Wall Street takes breather
after recent run-up

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By Seth Sutel
Associated Press

NEW YORK >> Wall Street played it safe today, pausing for mild profit-taking even as more evidence of a recovering economy flowed in.

Analysts said investors, while increasingly optimistic that a turnaround is beginning, are not convinced the market's rally will last. Investors were also concerned that a positive assessment of the economy by Federal Reserve Chairman Alan Greenspan might signal higher interest rates.

The Dow Jones industrial average closed down 48.92 at 10,525.37, losing some ground from a 140-point gain yesterday. The blue-chip indicator had posted triple-digit gains in three out of the previous four sessions. The Standard & Poor's 500 index slipped 5.23 to 1,157.54. The Nasdaq composite index finished down 8.77 at 1,881.63.

The Treasury's 2-year note fell 11/32 to 99 11/32; its yield rose 20 basis points to 3.35 percent. The 10-year note lost 1932 to 97 11/32; its yield gained 17 basis points to 5.22 percent. The 30-year bond lost 1 1532 to 96 2/32; its yield gained 11 basis points to 5.65 percent.

Advancers edged decliners on the New York Stock Exchange, with 1,591 up, 1,578 down and 200 unchanged. Volume came to 1.50 billion shares.

The NYSE composite index fell 2.21 to 600.90, the American Stock Exchange composite index slipped 0.84 to 880.56 and the Russell 2000 index rose 0.12 to 494.92.

"We're seeing some selling, but by and large this is just profit-taking," said Richard A. Dickson, technical analyst at Hilliard Lyons. "There doesn't seem to be any serious underlying problem in the market today. People are just thinking the last couple of days have been pretty good and maybe we should take our profits now, so that if stocks fall back, we won't lose out."

Indeed, after an early uptick, blue chips turned lower as investors collected gains from the sizable advances that had pushed the Dow to its highest level since mid-July.

Financial and manufacturing stocks, which had enjoyed some of the biggest gains in recent sessions, struggled. American Express dropped 23 cents to $39.69, while 3M lost $1.57 to $120.

Conseco tumbled 26 cents to $3.49 after Merrill Lynch cut its rating on the insurer to "reduce/sell," a day after Conseco's financial officer stepped down and Moody's Investors Service questioned whether Conseco can generate enough cash to pay its debt.

And Boeing slid $2.22 to $47.64 although South African Airways decided to purchase 41 aircraft from rival Airbus.

But several retailers were higher, lifted by better-than-expected February sales. J.C. Penney advanced $1.93 at $21.12.

Tech stocks were also mixed. Gateway rose 20 cents to $5.50, while competitor Dell dropped 35 cents to $27.59.

Intel rose 2 cents to $32.98 ahead of a midquarter earnings update. The world's biggest chipmaker later said in a news release prior to a conference call that first-quarter sales will be in line with forecasts, as personal-computer demand drops after a pickup during the holiday sales season. Bloomberg News reported revenue will be $6.6 billion to $6.9 billion, compared with the $6.4 billion to $7 billion range Intel gave in January, the chipmaker said.

Intel, due to report its earnings April 16, is expected by analysts to earn 14 cents a share on sales of $6.77 billion.

Meanwhile, Sun Microsystems, whose server computers run corporate networks and Web sites, reiterated after the market closed that fiscal third-quarter revenue will rise "slightly" from last quarter's $3.11 billion. Sun Chief Financial Officer Mike Lehman repeated that the company expects to return to profitability, excluding some costs, in the fourth quarter ending in June.