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The Honolulu Advertiser

Posted at 11:58 a.m., Monday, November 18, 2002

Dow rally cut short by investor concerns

Hawai'i Stocks
Updated Market Chart

By Hope Yen
Associated Press

NEW YORK ­ Wall Street pulled back today as investors tried to extend six weeks of blue chip gains but were stymied by war concerns and a tepid Wal-Mart outlook.

Analysts said trading was light as investors had little significant economic news to digest, leading to more accentuated price swings. Selling to cash in profits from October's big rally also depressed prices.

"What we're seeing is some skittishness from investors in the near term about the prospects of war with Iraq," said Kevin Caron, market strategist at Ryan, Beck & Co. "But I caution that we've already discounted a great deal of anxiety in the market."

"We're beginning a recovery process, and we think we've got significant room to move off these levels. I wouldn't be terribly concerned" about some moderate declines, he said.

The Dow Jones industrial average declined 92.52, or 1.1 percent, to close at 8,486.57, according to preliminary calculations, snapping a four-day winning streak. Earlier in the day, blue chip stocks rose as much as 57 points.

The broader market also finished lower. The Nasdaq composite index fell 17.43, or 1.2 percent, to 1,393.71. The Standard & Poor's 500 index dropped 9.47, or 1 percent, to 900.36.

Wal-Mart fell $1.81 to $53.68 after the retailer said it expected November sales to fall at the low end of its estimates.

Analysts say investors have been upbeat following October's rally and have faith in a strengthening economic recovery, leading to six straight weeks of Dow advances, the longest weekly winning streak in 31/2 years.

Indeed, stocks got a big boost last week on stronger-than-expected retail sales and consumer sentiment, raising hope of continued consumer spending, which accounts for about two-thirds of the nation's economic activity.

But analysts caution that terrorism concerns and a war with Iraq continue to weigh on investors' minds, likely limiting gains in the coming weeks, particularly now that the better-than-expected earnings reports are largely complete.

AT&T dropped 35 cents to $13.51 after Lehman Brothers cut the company's stock rating to "underweight" from "equal weight."

Gainers included UAL, which jumped 55 cents to $3.50, after the parent of United Airlines said it expected to cut 9,000 more jobs as part of a restructuring to return to profitability.

Declining issues outnumbered advancers 5 to 4 on the New York Stock Exchange. Volume was light. The Russell 2000 index, a barometer of smaller company stocks, fell 3.33, or 0.9 percent, to 382.59.