Bears regain control
as rally loses steam

---

By Lisa Singhania
Associated Press

NEW YORK >> Wall Street's hopes of a recovery fizzled today after mixed retail reports persuaded investors to play it safe and cash in their gains from the huge rally a day earlier.

Stocks fell sharply, although the major indexes preserved more than half of yesterday's significant gains. A retreat after a big advance is not unusual, but analysts said the declines were a reminder that buyers still don't have enough faith in the business recovery to think that bidding stock prices higher will pay off.

"By and large, this bull is looking like a one-trick pony," said Bryan Piskoroswki, market commentator at Prudential Securities. "We didn't give it all back, but sustainability and follow-through are still big problems for this market."

The Dow Jones industrial average closed down 104.41 at 10,037.42, pulling back from its 305-point gain yesterday.

Broader stock indicators also fell back. The Nasdaq composite index lost 45.80 to 1,650.49. The Standard & Poor's 500 index was down 15.84 at 1,073.01. Yesterday, the Nasdaq soared 122 points, while the S&P gained 39.

Decliners led advancers 3 to 2 on the New York Stock Exchange, with 2,073 down, 1,120 up and 196 unchanged. Volume came to 1.14 billion shares vs. 1.5 billion yesterday.

The NYSE composite index fell 6.50 to 572.72, the American Stock Exchange composite index lost 6.65 to 942.69 and the Russell 2000 index fell 8.37 to 501.38.

The Treasury's 2-year note rose 18 to 100 1/4; its yield fell 7 basis points to 3.24 percent. The 10-year note gained 1 1/32 to 97 2432; its yield lost 5 basis points to 5.17 percent. The 30-year bond jumped 1532 to 96 1032; its yield fell 4 basis points to 5.64 percent.

A slew of mostly unimpressive retail sales reports started the session on a negative note. Consumer spending accounts for two-thirds of the economy, and retail sales are considered one indicator of its strength.

Wal-Mart fell $1.40 to $54.99 and Target lost $2.29 to $42.03 after reporting weaker-than-expected April sales at stores open at least a year. But the Gap rose $1.08 to $15.79 on a smaller-than-expected sales decrease.

"This type of news preys upon people's concern that the consumer side of the economy could be at risk," said Tom Galvin, chief investment officer at Credit Suisse First Boston.

Reports of anthrax in the mail at the Federal Reserve also unnerved the market, although stocks had been falling before the news. Authorities said more tests would have to be done to confirm the finding.

Tech stocks fell as investors collected gains from yesterday's trading. Cisco Systems, whose stronger-than-expected profits triggered the rally, was down 52 cents at $15.75 -- cutting into its 24 percent gain yesterday.

Brokerage firms, which had risen on speculation that the state of New York and Merrill Lynch would soon settle an alleged conflict-of-interest case, were weak. Merrill Lynch fell $1.04 to $42.91. The stock was also hurt by UBS Warburg's decision to reduce its forecast for the brokerage, citing weak merger-and-acquisitions activity.

Profit-taking usually follows big run-ups, but analysts said investors today were continuing their pattern of refusing to commit too much until companies become more confident about future business.