Indexes Drop as Stocks End Their Two-Day Rally
Wall Street retreated Friday as investors collected their wins from a two-day rally, but the selling was subdued and focused on the technology sector.
The Dow Jones industrial average closed down 12.74 points, or 0.1%, at 9,907.26. The losses were more significant for the technology-dominated Nasdaq composite index, which fell 22.79 points, or 1.2%, to 1,911.24. The Standard & Poor’s 500 index dropped 8 points, or 0.7%, to 1,122.20. Losers led winners by 9 to 8 on the New York Stock Exchange and by 4 to 3 on Nasdaq in moderate trading.
For the week, the indexes were mixed. The Dow rose 0.7%, Nasdaq fell 1.4% and the S&P; lost nearly 1%.
Friday’s decline followed a dramatic advance Wednesday and Thursday as the market, rebounding from an earlier sell-off, reacted to bargain hunting and an upbeat forecast from the Federal Reserve.
“It used to be ‘Buy the dips and hold’ in the technology sector. Now it is ‘Buy the dips and sell on strength,’” said Charles White, portfolio manager at Avatar Associates.
Sun Microsystems slipped 39 cents to $10.37 on concerns about the competitiveness of its products. Intel dropped 37 cents to $34.67, falling back from gains Thursday prompted by a Merrill Lynch upgrade of the stock. Microsoft lost $1.05 to $62.66.
Financial stocks also were weak. American Express tumbled 75 cents to $35.10, Morgan Stanley Dean Witter fell $1.59 to $53.41 and J.P. Morgan Chase dropped $1.89 to $32.16.
But Disney rose $1.39 to $22.45, after reporting stronger-than-expected quarterly results and announcing it will no longer buy consulting and auditing services from a single company.
A new batch of satisfactory but unimpressive economic data failed to create much excitement.
The Labor Department reported the nation’s unemployment rate unexpectedly dropped to 5.6% in January, the lowest level since before the terrorist attacks. But analysts cautioned that the change occurred not because employment rose but because 924,000 job seekers stopped looking for work.
Similarly, reports on January business activity from the Institute for Supply Management and consumer sentiment from the University of Michigan showed improvement, but were below expectations.
In other highlights:
* Treasury bond yields fell on fears the economy may not rebound as quickly as some had hoped. The yield on the benchmark 10-year Treasury note fell to 4.98%, from Thursday’s close of 5.03%.
* Waste Management fell $3.69 to $25.13 after it trimmed fourth-quarter profit estimates.
* TMP Worldwide dropped $4.36 to $38.21 after Forbes magazine reported that the owner of the Monster.com Web site skimmed over mergers-and-acquisitions expenses to make financial results look better. The firm demanded a correction, calling the reporting “inaccurate and irresponsible.”
* Amgen gained $2.38 to $57.78. The biotech company’s new Neulasta drug will be used during chemotherapy to prevent a drop in infection-fighting white blood cells. Amgen said its older form of the therapy, called Neupogen, had sales of $1.3 billion last year.
Market Roundup: C4, C5
