Posted on: Tuesday, August 27, 2002
Dip in stocks sparks moderate buying rally
By Amy Baldwin
Associated Press
NEW YORK — Investors looking for a reason to buy on Wall Street found one yesterday, as an early decline made prices too attractive to pass up. The resulting rally sent stocks moderately higher.
The advance, which came on extremely light volume, followed a wave of profit-taking that began Friday. Investors were buying cautiously, but that wasn't surprising given the size of the market's recent advance and analysts' doubts about the durability of the gains.
"Investors are a little hesitant to commit more capital until September passes," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. "We probably aren't going to see a rush of buyers in the next few weeks."
The Dow Jones industrial average, down more than 116 points at midday, closed up 46.05, or 0.5 percent, at 8,919.01. The Dow dropped 180 points Friday as investors collected profits from five straight weekly gains.
Yesterday's turnaround indicated how much market sentiment has shifted toward buying rather than selling. Still, analysts said investors are cautious ahead of the Labor Day weekend and amid concerns about the possibility of war with Iraq.
Hershey Foods yesterday rose $1.77 to $76.80 on a report that Swiss conglomerate Nestle is offering $11.5 billion to acquire the nation's largest candymaker.
UPS fell 57 cents to $64.71 on a downgrade from Morgan Stanley.
Advancing issues led decliners 5 to 2 on the New York Stock Exchange. Volume was very light at 1.28 billion shares.
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