Investors take profits,
sending stocks lower
By Amy Baldwin
Associated Press
NEW YORK >> Investors sold stocks for a second straight day yesterday, collecting profits in the absence of major economic and earnings news. Brokerage house downgrades accounted for most of the market's more notable activity in an otherwise mundane session.
Trading was light and analysts predicted a quiet week as many traders and investors wrap up their summer vacations.
"Volume is so low here that you don't want to read too much into it," said Peter Dunay, market strategist at Wall Street Access, a New York-based brokerage firm.
The Dow Jones industrial average closed down 31.23, or 0.6 percent, at 9,317.64, pulled down in part by downgrades of components Caterpillar and Alcoa.
Despite losing 74.81 on Friday, the Dow had a weekly gain of 0.3 percent. Last week, the blue chips also hit a high close not seen in 14 months.
The Nasdaq composite index fell 1.01, or 0.1 percent, to 1,764.31, following a win of 3.7 percent. Last week, the Nasdaq closed at levels not achieved in 16 months.
But the Standard & Poor's 500 index eked out a gain of 0.65, or 0.1 percent, in the final minutes of yesterday's session, closing at 993.71.
Declining issues outnumbered advancers 4 to 3 on the New York Stock Exchange. Consolidated volume was very light at 1.22 billion shares, well below Friday's 1.66 billion.
The Russell 2000 index, which tracks smaller company stocks, fell 1.64, or 0.3 percent, to 483.87. The NYSE composite index dropped 9.29 to 5,585.64. The American Stock Exchange composite index slipped 1.92 to 9667.01.
Analysts have been quick to point out that the market's selloffs have been minor when compared with the strides its major gauges have made. So far this year, the Nasdaq has surged 32.1 percent, the Dow has gained 11.7 percent and the S&P has advanced 12.9 percent.
The market's strength comes from increasingly positive earnings and economic data, a relief to investors after three years of heavy losses on Wall Street.
"The market has done very well year to date. I don't think there is anything I can really point to that would specifically cause the market to drop," said Matt Brown, head of equity management at Wilmington Trust. "I can only attribute it to a summertime slowdown and that the market has done quite well."
Analysts said yesterday's declines did not indicate investors are less optimistic about the economy. Rather, the market was expected to pull back following its latest gains.
Caterpillar dropped $2.03 to $69.66 after Legg Mason lowered its rating to "hold" from "buy."
Alcoa fell 34 cents to $27.79 after Prudential Securities downgraded it to "hold" from "buy."
Wal-Mart advanced 70 cents to $59.10 after raising its August same-store sales estimate.
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