Stocks fall
on profit-taking
By Amy Baldwin
Associated Press
NEW YORK >> Weaker-than-expected revenue at Wal-Mart helped incite a round of profit-taking on Wall Street today, leaving stocks with moderate declines.
Analysts said the market had little reaction to overnight attacks in Saudi Arabia, which killed seven Americans.
While investors are growing more confident about the market, analysts expected some retreat after two straight winning weeks for blue-chip stocks and a four-week winning stretch for the broader market.
"It should be a minor pullback," said Steven Goldman, chief market strategist, Weeden & Co. in Greenwich, Conn., noting the more upbeat tone among investors and on Wall Street.
Goldman added: "You have had this surge in the market and this surge is very different than the other rallies (during the three-year bear market). It is very broad-based. Every stock is participating. ... This one has all the earmarks of being a broader-based, sustainable rally, and with that declines tend to be somewhat shallow."
Declining issues outnumbered advancers about 7 to 6 on the New York Stock Exchange. Trading volume was light.
The Dow Jones industrial average closed down 47.48, or 0.5 percent, at 8,679.25. The loss was moderate compared with an advance of 235.51 over the previous two sessions.
The market's broader gauges were mixed. The Standard & Poor's 500 index fell 2.81, or 0.3 percent, to 942.30. The Nasdaq composite index declined 1.72, or 0.1 percent, to 1,539.68. But the Russell 2000 index rose 1.03, or 0.3 percent, to 419.23.
The price of the Treasury's 10-year note closed up 1/4 point, while its yield fell to 3.61 percent from 3.65 percent yesterday. Two-year Treasury notes were down 1/32 point and yielded 1.45 percent, up from 1.43 percent yesterday.
Despite the declines, investors' mood has been much more upbeat than it has been during the three-year bear market, particularly since companies reported surprisingly strong first-quarter profits. Investors had feared another litany of downbeat results, this time due to the buildup to war in Iraq.
Investors' more positive outlook was clear today when they kept the market's declines moderate despite disappointing news from Wal-Mart and news of overnight attacks in Saudi Arabia.
"The overall tone of the market is very good, despite the negative news and concerns that this market is getting overextended," said Brian Bush, director of equity research at Stephens Inc. in Little Rock, Ark.
Still, today, investors punished companies whose results were disappointing. Wal-Mart fell $1.21 to $55.49 after meeting analysts' first-quarter earnings expectations but missing their revenue estimates.
May Department Stores declined 42 cents to $22.17 after missing Wall Street's earnings forecast by 2 cents a share.
Other earnings-related losers included energy concern El Paso Corp., which slipped 16 cents to $7.50 on first-quarter profits that missed analysts' expectations by 5 cents a share.
Overseas, Japan's Nikkei stock average finished down 0.4 percent. In Europe, France's CAC-40 inched up 0.03 percent and Britain's FTSE 100 gained 0.3 percent, while Germany's DAX index lost 0.9 percent.
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