Market shakes off
profit taking

The major indexes end higher
after a wave of selling
that began Friday

---

By Amy Baldwin
Associated Press

NEW YORK >> Investors looking for a reason to buy on Wall Street found one today, as an early decline made prices too attractive to pass up. The resulting rally sent stocks moderately higher.

The advance followed a wave of profit-taking that began Friday. Investors were buying cautiously, but that wasn't surprising given the size of the market's recent advance and analysts' doubts about the durability of the gains.

"Investors are a little hesitant to commit more capital until September passes," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. "We probably aren't going to see a rush of buyers in the next few weeks."

Advancing issues led decliners 5 to 2 on the New York Stock Exchange where volume was light. The Dow Jones industrial average closed up 46.05, or 0.5 percent, at 8,919.01. The Dow dropped 180 points Friday as investors collected profits from five straight weekly gains. Last week, the Dow rose 1.1 percent.

The market's broader gauges were also higher today after shaking off an earlier bout of profit taking. The Standard & Poor's 500 index rose 7.09, or nearly 0.8 percent, to 947.95, having captured a five consecutive weekly advances.

The Nasdaq composite index advanced 11.12, or 0.8 percent, to 1,391.74, having risen three weeks in a row. The Russell 2000 index, which tracks smaller company stocks, rose 7.60, or 1.9 percent, to 407.73.

The price of the Treasury's 10-year note was up 1/16 point today, while its yield held steady at 4.23 percent. Two-year Treasury notes were unchanged with a 2.16 percent yield.

The market's advance solidified late in the session, which analysts attributed to investors wanting to play it safe ahead of the Labor Day holiday weekend and to concerns about the possibility of war with Iraq. Analysts expect investors to continue to trade cautiously in the coming weeks.

"Investors are going to be playing it coolly," said Joseph V. Battipaglia, chief investment officer at Ryan, Beck & Co. LLC. "Given a five-week rally where you can take some profits, it is not surprising."

Whether the market's recent gains are a short-term blip in the bear market or the start of a longer-term, lasting advance remains to be seen. For answers, investors next month will look to see how the market handles the latest round of economic data and third-quarter profit warnings -- whether negative, positive or as expected.

Among today's gainers, Hershey Foods rose $1.77 to $76.80 on a report published in USA Today, saying that Swiss food and beverage conglomerate Nestle is offering $11.5 billion to acquire the nation's largest candymaker, or $82 to $85 a share.

Since the charitable trust that controls Hershey said last month it would put the candy maker up for sale, state lawmakers have opposed the idea because of concern about the impact of potential job losses. One member of the Hershey Trust Co.'s board has said the trust may still end up allowing Hershey to buy back shares rather than sell the 108-year-old company.

Nestle and Hershey spokesmen declined to comment. Kraft Foods Inc., controlled by Philip Morris Cos., is Nestle's biggest rival for Hershey, analysts have said.

Clear Channel Communications rose $1.48 to $34.65 after RBC Capital Markets upgraded the media company.

Hewlett-Packard advanced 15 cents to $14.85 ahead of its fiscal third-quarter earnings due out Tuesday.

But UPS fell 57 cents to $64.71 on a downgrade from Morgan Stanley.

And, Fairchild Semiconductor dropped $1.06 to $13.59 after Bear Stearns downgraded the stock, citing the company's price cuts.

Overseas, Japan's Nikkei stock average finished up 2 percent. In Europe, France's CAC-40 fell 1.6 percent and Germany's DAX index lost 1.2 percent.