Dow Gives Up All-Time High
Try, try again -- that’s what the Dow Jones industrial average will have to do.
The blue-chip index hit a record high during trading Monday, only to surrender all of the rally by the closing bell, amid a broad market decline on the first trading day of the fourth quarter.
The Dow has been struggling for the last few sessions to finish above its all-time closing high of 11,722.98 set Jan. 14, 2000.
The 30-stock index rose as high as 11,726.94 on Monday, then slumped to close with a loss of 8.72 points, or less than 0.1%, to 11,670.35.
The technology-dominated Nasdaq composite index fell the most in almost a month, as a report showing slowing growth in the manufacturing sector heightened concern that the economic expansion was weakening.
Stocks failed to advance despite another slide in oil prices.
Jon Brorson, head of growth equities at Lehman Bros. Asset Management, noted that the start of a new quarter often triggers market cross-currents as some investors rebalance their portfolios.
Blue-chip stocks had led the market rally in the third quarter, and that may have helped spur buying of those shares early in the session Monday as some investors sought to get aboard the recent winners.
But the market pulled back with about two hours to go in the session.
Traders said it wasn’t unusual for the Dow to have trouble surmounting levels that investors believe could be key inflection points for the market overall.
The Nasdaq index slid 20.83 points, or 0.9%, to 2,237.60, its biggest drop since Sept. 6.
The Standard & Poor’s 500 index lost 4.53 points, or 0.3%, to 1,331.32.
Losers topped winners by 2 to 1 on Nasdaq and by a lesser margin on the New York Stock Exchange. Trading was relatively light amid the Jewish holiday Yom Kippur.
The Russell 2,000 index of smaller stocks dropped 0.9%, nearly matching its decline on Friday. The index eked out a mere 0.1% gain last quarter as some investors shied away from smaller issues on worries about the economy.
By contrast, the Dow rose 4.7% last quarter.
In economic news Monday, the Institute for Supply Management said the U.S. manufacturing sector grew at the slowest pace in more than a year in September amid weaker auto sales and a cooling housing market.
“Whenever you have times where the economy is decelerating and where the next moves are unclear -- economic moves and interest-rate moves by the Federal Reserve -- investors get a little nervous,” said John Kattar, chief investment officer at Eastern Investment Advisors in Boston.
Treasury bonds rallied modestly. The yield on the 10-year Treasury note eased to 4.61% from 4.63% on Friday.
Oil prices resumed their summer slide, with near-term futures in New York falling $1.88 to $61.03 a barrel on expectations of a further rise in supplies.
Among Monday’s market highlights:
* Some casino stocks gained after Harrah’s Entertainment received a surprise $15.1-billion, $81-a-share takeover bid from private-equity investors. Harrah’s soared $9.25 to $75.68.
Wynn Resorts rose 74 cents to $68.75, MGM Mirage added $1.20 to $40.69 and Ameristar Casinos was up 54 cents to $22.25.
* Myogen surged $16.36 to $51.44 after drug research company Gilead Sciences said it would acquire the company for $2.5 billion. Gilead slid $4.49 to $64.28.
The deal failed to spark a broad rally in biotech shares. Amgen fell $1.23 to $70.30, Vaxgen lost 4 cents to $4.50 and Myriad Genetics was down 27 cents to $24.38. But Cephalon advanced $1.35 to $63.10.
* Apple Computer fell $2.12 to $74.86 after Citigroup cut its rating on the computer maker to “hold” from “buy,” saying Apple was unlikely to introduce a video iPod with a larger screen and other enhancements before the holidays.
* Wal-Mart Stores lost 88 cents to $48.44, after it reported that September sales at stores open at least a year rose 1.8%. The retailer had expected such sales to rise 1% to 3%.
* LCA-Vision plunged $10.22 to $31.09. The operator of vision-correction laser-surgery centers said it had expected to earn $1.60 to $1.70 a share this year, less than the $1.89 expected by analysts in a survey by Thomson Financial.
* In commodity trading, wheat futures jumped to their highest in 10 years on shrinking global inventories. Near-term futures rose 3 cents to $4.46 a bushel in Chicago.
