Profit-Taking Clips Stocks; Crude Oil Prices Pull Back
Stocks slid Tuesday as some investors cashed in on the recent sharp run-up in prices.
In commodity trading, oil prices fell back from Monday’s nine-year highs.
On Wall Street the Dow Jones industrial average fell 93.89 points, or 0.9%, to close at 10,995.63. The index had traded as low as 10,980.
The broad market also was lower. The Nasdaq composite index slumped 49.69 points, or 1.5%, to 3,342.87 after hitting a new high intraday.
Losers topped winners by 26 to 15 on Nasdaq and by 22 to 9 on the New York Stock Exchange, in active trading.
“It’s a buyers’ strike, and people are locking in gains before the lull of the holiday,” said Chris DiEnno, a portfolio manager for BNY Asset Management.
“We’ve had a big run, so it’s not surprising to see some profit-taking. The market’s way overbought,” said Ricky Harrington, senior vice president for technical analysis at Wachovia Securities in Charlotte, N.C.
“But for a down day, the market did well,” he added, pointing out that the major averages closed up from their lows.
Stocks lost ground despite a stable day in the bond market, where yields have been resurging in recent sessions.
The 30-year Treasury bond yields ended unchanged at 6.19%.
In crude oil futures trading, signs that Iraq’s standoff with the United Nations may be short-lived sent oil prices lower, a day after crude soared on news that Iraq would stop pumping oil to protest the terms of its oil-for-food program.
U.N. Secretary-General Kofi Annan, speaking in Geneva, said he expected Iraq to reverse its decision to halt exports, and that “very serious discussions” were taking place in New York to resolve the issue.
Near-term oil futures in New York lost 63 cents to $26.44 a barrel.
Nasdaq was weighed down by declines in some of its leading tech stocks--many of which have been on fire for the last month.
Oracle fell $3.94 to $73.50, Intel lost $1.50 to $79 and Broadcom slumped $15.88 to $192.75.
Also, Extreme Networks, which makes equipment for data networks, plunged $24 to $70.25 after a Morgan Stanley Dean Witter analyst voiced concern about the company’s fourth-quarter sales.
But many Internet stocks remained in buyers’ sights. EBay soared $13.25 to $167.56, DoubleClick jumped $15 to $173 and EToys rose $2 to $59.
Significantly, America Online, which split 2-for-1 on Tuesday, rose $3.31 to close at $85--a new closing high, surpassing the old split-adjusted closing high of $83.75 reached on April 6.
AOL had plunged as low as $41 in August.
Among Tuesday’s highlights:
* Financial and utility stocks continued to weaken, suggesting investors expect higher interest rates ahead.
Golden West Financial led the decline, off $4.31 to $102.06, extending a three-day slide.
Other losers included Bank of America, down $1.63 to $62.63; Merrill Lynch, down $1.38 to $85.69; and Charles Schwab, down $2 to $42.
The Dow utility index fell 1.6% to its lowest since September 1998.
* Most energy stocks fell. Exxon lost $1.25 to $78, Texaco fell $2 to $61.31 and Transocean Offshore slumped $2.19 to $28.56.
* Some telecom stocks remained hot, including Nokia, up $10.25 to $141, and JDS Uniphase, up $10.31 to $238.31. But Ciena slid $5.06 to $45.19.
* Gentia Software’s U.S.-traded shares rose $5.50 to $7.63 after the company announced a product alliance with IBM, whose stock fell $1.81 to $106.06.
* Cellegy Pharmaceuticals fell $6.75 to $4.06 after announcing disappointing phase III trial results for its Anogesic ointment product.
* Microwave Power Devices plunged $7.94 to $7.94 after warning it expects a fourth-quarter loss of 3 cents to 5 cents a share.
* H&R; Block fell $1.06 to $45 despite reporting a second-quarter loss of 46 cents a share, a penny narrower than its estimated loss.
Market Roundup, C11
