NEW YORK >> Wall Street ended a tepid trading session today with a moderate advance after a disappointing outlook from Kimberly Clark left investors questioning prospects for a solid business recovery in 2003. Stocks struggled for much of the session to claim their gains. Stocks show
tepid advanceBy Amy Baldwin
Associated PressTrading paled by comparison with yesterday, when the market rose sharply after the Federal Reserve issued a positive assessment of the economy and left interest rates unchanged on the belief that economic conditions are strengthening.
Advancing issues outnumbered decliners 4 to 3 on the New York Stock Exchange. Trading volume was light.
After falling as much as 86 points earlier, the Dow Jones industrial average closed up 14.88, or 0.2 percent, at 8,589.14, according to preliminary calculations. The Dow rose 100.85 the previous session.
The market's broader gauges were also higher. The Nasdaq composite index rose 5.83, or 0.4 percent, to 1,396.59. The Standard & Poor's 500 index gained 0.51, or 0.05 percent, to 904.96. The Russell 2000 index, the barometer of smaller company stocks, rose 0.41, or 0.1 percent, to 393.88.
The price of the Treasury's 10-year note was up 3/8 point this afternoon, while its yield fell to 4.00 percent from 4.05 percent yesterday. Two-year Treasury notes were up 1/16 point and yielded 1.83 percent, down from 1.88 percent yesterday.
Wall Street was pressured by Kimberly-Clark, which dropped $1.15 cents to $46.78 after lowering its fourth-quarter and 2003 earnings outlooks. The news was upsetting to investors who know that consumer products companies typically are among the safest havens in difficult markets due to a steady demand for their products.
Despite Kimberly-Clark's news, the market fought to climb higher, which analyst attributed to investors believing the the future looks a lot more positive for Wall Street.
"You have an improving picture and a better story for 2003," said Kevin Caron, market strategist, Ryan, Beck & Co., who noted that there have been a number of positive fundamental changes since September.
Among those changes, he said, was the Republican sweep of Congress in November's midterm election, bolstering chances of a $300 billion tax cut over 10 years.
Other analysts believe that with news of corporate scandals dissipating, investors will be paying closer attention to the economy's progress, which bodes well for stocks. And, after three years of declines, prices look appealing especially with better economic conditions.
"My belief is that we have completed the unwinding of the (market) bubble and the stock market will recover with the economy," said Hugh Johnson, chief investment officer at First Albany Corp.
Among today's gainers, retailer Talbots rose $1.05 to $29.49 following an upgrade from Lehman Brothers. Emmis Communications climbed 41 cents to $20.17 after Wachovia Securities raised its rating on the radio operator.
Overseas, Japan's Nikkei stock average finished down 0.9 percent. France's CAC-40 rose 1.5 percent, Britain's FTSE 100 advanced 1.3 percent and Germany's DAX index gained 0.9 percent.
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