Investors optimistic despite renewed fears
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NEW YORK Caution crept back into Wall Street today as fears about terrorism resurfaced, but the nervousness wasn't enough to stop investors from trying to move the market higher.
The major stock indexes fluctuated before ending the session modestly lower, giving up early gains following a midday news conference by U.S. Attorney General John Ashcroft, who reported that three German-based terrorists are being sought for planning the Sept. 11 terrorist assaults on the World Trade Center and Pentagon. Soon after, Washington, D.C., officials confirmed that the deaths of two postal workers were caused by inhalation anthrax.
The news reawakened Wall Street's concerns about national security and how the market will fare as the United States retaliates for the attacks.
But the downturn wasn't surprising given the Dow Jones industrials' 172-point surge yesterday, which was triggered by largely lackluster earnings reports. While a number of companies today reported satisfactory results, analysts said that wasn't enough to sustain a rally given investors' fears about terrorism.
The Dow closed down 36.95 at 9,340.08, according to preliminary calculations.
The broader market also finished lower. The Nasdaq composite index slipped 3.69 to 1,704.39, while the Standard & Poor's 500 index fell 5.12 to 1,084.78.
Analysts weren't too concerned about the slippage, noting there are signs of strength in the market. One positive has been in the way stocks have held up despite a fairly tepid earnings season, which began in earnest last week. Amid Tuesday's selling, the market displayed some stability, evident in that as many stock prices rose as fell on Wall Street.
The market entered earnings season in decent health, having recovered substantially from its sharp decline in the first week of trading after the attacks. The Dow has regained about 80 percent of the 1,369 points it lost that week. The Nasdaq is 9 points above its pre-attack level; the S&P 500, is 8 points below its Sept. 10 level.
"That has to be construed as extremely bullish," said Al Mirman, market strategist at V Finance in Sarasota, Fla.
Still, the market's recent strong gains combined with the news from the terrorism front gave still skittish investors reason to sell, particularly those companies that disappointed them.
"There may be inclinations to take some profits. ... When we're not going to have the support of the better earnings, the market is going to be more headline driven," said Jon Brorson, director of equities at Northern Trust in Chicago.
Agriculture company Monsanto tumbled $4.23 to $32.56, on a loss that was 2 cents a share higher than Wall Street had anticipated.
Pharmacia slid $4.37 to $38.39 after projecting 2002 per-share earnings to be in a range of $1.91 to $1.96, below the $2 Wall Street was expecting.
Lucent fell 26 cents to $6.64 after posting a wider-than-expected loss today.
SBC Communications was the weakest Dow industrial for the second straight session, falling $2.62 to $38.78. Yesterday, SBC missed earnings expectations by a penny a share.
DaimlerChrysler rose 83 cents to $35.86 after beating analysts' forecasts and affirming its full-year targets.
Consumer products maker Kimberly-Clark, which met expectations, advanced $1.14 to $54.36.
Amazon.com rose 78 cents to $9.55, while Compaq Computer slipped 25 cents to $9.40.
Advancing issues matched decliners on the New York Stock Exchange. Volume was 1.3 billion shares, ahead of the 1.1 billion shares traded yesterday.
The Russell 2000 index, the barometer of smaller company stocks, fell 3.14 to 427.36.