Market Stabilizes; Key Indexes Drop Slightly
Wall Street stabilized Tuesday after three days of losses fueled by economic and geopolitical worries.
More stocks rose than fell, although key indexes closed modestly lower as traders were quick to cash in gains from morning and afternoon rally attempts.
Some longer-term investors also were selling: Huntington Beach-based Fabian Investment Resources, an investment advisory service with about 17,000 newsletter subscribers nationwide, advised clients to sell out of their stock mutual funds at the close of trading Tuesday.
Doug Fabian, president of the company, cited concerns that the market’s slide in recent weeks might accelerate.
“I’m of the opinion that there’s a lot of ‘hot money’ in the market now,” he said.
The Dow Jones industrial average eased 1.11 points, or 0.01%, to 10,063.64 after rising as much as 60 points early on.
Through Monday, the index had fallen 6.3% from its 32-month high reached Feb. 11.
The Standard & Poor’s 500 index lost 1.45 points, or 0.1%, to 1,093.95. The Nasdaq composite index fell 8.10 points, or 0.4%, to 1,901.80.
Advancing issues outnumbered decliners by about 5 to 4 on the New York Stock Exchange and by a thinner margin on Nasdaq.
Some analysts argued that the decline in share prices was giving bargain hunters some good options. Stocks have been hit by concerns that U.S. economic growth might slow and by renewed fears about terrorism.
But first-quarter corporate earnings reports, due in April, are expected to be robust and could spark a rally, some analysts say.
“The market right now is probably at the lower end of a fair-value range,” said Kevin Caron, market strategist for Ryan, Beck & Co. in Livingston, N.J.
In the bond market, Treasury yields continued to slip as some investors looked for relative safety for their money. The 10-year T-note ended at 3.70%, down from 3.71% on Monday.
The Treasury will auction $26 billion in new two-year notes today, and traders will be watching to see if demand holds up given talk that the Bank of Japan has been cutting back on its intervention in the currency markets, leaving it with fewer dollars to invest in U.S. debt.
In commodities trading, oil prices rose after Energy Secretary Spencer Abraham reiterated that the government would not halt oil deliveries to the Strategic Petroleum Reserve. Some in Congress have advocated a halt as a way to divert more oil to the market.
May crude futures in New York rose 40 cents to $37.45 a barrel. Prices hit a 13-year high of $38.18 last week.
Among Tuesday’s highlights:
* European markets also stabilized after heavy losses in recent days. The main Spanish index added 0.5%. The German market was nearly unchanged.
* Some healthcare stocks attracted buyers. Novartis gained $1 to $42.30, Merck climbed 37 cents to $43.95, UnitedHealth rose 75 cents to $63.70 and Anthem was up 93 cents to $89.
* Brokerage Goldman Sachs Group reported quarterly earnings far above expectations, but its shares eked out only a small gain of 9 cents to $101.39.
* Selling continued to weigh down some Internet commerce firms, including EBay, off 50 cents at $65.54, and RedEnvelope, down 68 cents to $8.07.
* Walt Disney rose 20 cents to $25.10 a day after six big pension funds demanded an immediate meeting with the company’s board to express their concerns over the direction of the entertainment giant. Comcast, which has made an unsolicited bid for Disney, fell 39 cents to $28.16.
Market Roundup, C5
