Posted at 12:12 p.m., Tuesday, February 12, 2002
Market loses steam on profit-taking
By Amy Baldwin
The Dow Jones industrial average closed down 21.04, or 0.2 percent, at 9,863.74, according to preliminary calculations. The Dow climbed 259.34 in the previous two sessions.
The broader market was also modestly lower. The Nasdaq composite index fell 12.44, or 0.7 percent, to 1,834.22, and the Standard & Poor's 500 index declined 4.44, or 0.4 percent, to 1,107.50.
Today's trading fit into Wall Street's pattern so far this year. Caution has dominated stock trading as companies reported lackluster earnings and offered few positive predictions about the future. The major indexes are in negative territory for 2002, led by the Nasdaq, down 5.9 percent. The S&P has fallen 3.5 percent; the Dow, off 1.6 percent.
The December collapse of Enron, brought on by irregular accounting practices, has made investors more careful.
"Essentially, what we are left with is: What do the earnings numbers look like? And, can we trust the numbers?" said Alan Ackerman, executive vice president of Fahnestock & Co. "And, the jury is still out on whether the economy has hit bottom. It's enough to make one duck the market."
A congressional appearance today by former Enron chairman Kenneth Lay, who declined to answer questions before the Senate Commerce Committee, increased investors' uneasiness. The Enron debacle has raised questions about the truthfulness of other companies' books.
"People are worried about what other accounting bombs might be out there," said Richard A. Dickson, technical analyst for Hilliard Lyons in Louisville, Ky. "It doesn't help to hear all this congressional testimony going on, all these Enron guys taking the Fifth (Amendment protection). It sets a sour mood."
Investors sold Nortel, down 42 cents at $6.42, after chief financial officer Terry Hungle abruptly resigned yesterday, because of investments he made in the company's 401(k) retirement plan. Following Enron, investors have been more skeptical of how corporate executives profit from trading their companies' stock.
Most of the market's losses centered on the tech sector. Microsoft fell 99 cents to $60.14, and Intel stumbled 60 cents to $32.97.
There were some gainers, typically in safer, blue chip sectors. Procter & Gamble climbed $1.84 to $83.55, while Merck rose 77 cents to $60.22.
Declining issues narrowly outnumbered advancers 15 to 14 on the New York Stock Exchange. Volume was light.
The Russell 2000 index, the barometer of smaller company stocks, inched up 0.69, or 0.2 percent, to 472.01.
Overseas, markets were mixed with Japan's Nikkei stock average finishing up nearly 2.0 percent. But in Europe, France's CAC-40 and Britain's FT-SE 100 each ended down 0.3 percent, while Germany's DAX index fell 1.1 percent.