Stocks Are Mixed in Cautious Trading

From Reuters and Bloomberg News

Some key technology stocks edged up Tuesday, extending the Nasdaq market’s latest advance, but blue-chip shares slipped after surprisingly weak economic data put investors on their guard.

Until a late-session rally, stocks had spent most of the day in negative territory as investors paused for breath after solid gains this month driven by anticipation of improved corporate earnings in 2004.

On Monday, the Nasdaq composite index closed above 2,000 for the first time in almost two years, while the Dow Jones industrial average jumped 125 points to a 21-month high.


But Tuesday’s weaker economic data cooled off the market, said Edgar Peters, chief investment officer at PanAgora Asset Management. “The economic news is somewhat disappointing, and that could set the tone for next month.”

The continuing slump in the dollar and worries about possible terrorist attacks on U.S. targets also contributed to investor wariness.

The blue-chip Dow closed down 24.96 points, or 0.2%, at 10,425.04.

The broader market finished modestly in the black, however. The Standard & Poor’s 500 index gained less than a point to 1,109.64, and the tech-dominated Nasdaq index rose 3.40 points, or 0.2%, to 2,009.88.

Winners led losers by 7 to 5 on the New York Stock Exchange and by about 8 to 7 on Nasdaq. Trading was light, with many Wall Street participants taking vacations over the shortened trading week.

U.S. and many foreign markets will be closed Thursday for New Year’s Day. However, Wall Street will be open for a full session today and Friday.

The Conference Board said Tuesday that consumer confidence deteriorated in December as Americans remained anxious about their job prospects. The private research firm said its index of confidence eased to 91.3 in December from an upwardly revised 92.5 in November.

A separate report showed that business activity in the Midwest expanded in December for the eighth straight month but at a pace that fell short of expectations.

Also, sales of existing homes fell more than expected in November, the National Assn. of Realtors said.

Investors took profits in some of the year’s big gainers. Alcoa fell 80 cents to $38.11, for the biggest drop in the Dow. The stock has surged 67% in 2003.

Other stocks that have led this year’s rally also declined. Citrix Systems, a software maker that’s up 75% this year, fell 34 cents to $21.55. Allegheny Technologies, a maker of specialty materials including stainless steel, lost 48 cents to $13.42 after more than doubling this year.

But some tech shares continued to rise, including Dell, up 25 cents to $34.51, and United Online, up 42 cents to $17.39.

In other trading, the euro currency rose to a record $1.255 on the weak U.S. economic reports, although the greenback edged up against the Japanese yen. Gold rose for a fifth straight session, adding $2.10 an ounce to $416.90 in New York.

Cattle futures fell the daily limit on the Chicago Mercantile Exchange -- losing 5 cents to 76.175 cents a pound -- for the fourth straight session after South Korea said it would keep its ban on U.S. beef imports until it is satisfied the meat comes from herds free of “mad cow” disease.

Since the announcement on Dec. 23 that a cow in Washington state had contracted the disease, cattle futures have fallen 16%, the steepest four-session decline since at least 1986.