Posted at 11:02 a.m., Friday, November 29, 2002
Decline not enough to derail Dow gains
By Hope Yen
Analysts said today's drop on light trading wasn't particularly surprising after blue-chip stocks surged 255 points Wednesday on better-than-expected economic data, the Dow's best day before Thanksgiving ever.
Wall Street was closed yesterday for the holiday.
"The market is really hanging in there pretty well," said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee.
The Dow fell 35.59, or 0.4 percent, to close at 8,896.09.
The broader market also finished lower. The Nasdaq composite index dropped 9.16, or 0.6 percent, to 1,478.78. The Standard & Poor's 500 index fell 2.56, or 0.3 percent, to 936.31.
For the week, the Dow gained 1 percent to post its eighth winning week, a feat not seen since the period ended March 20, 1998. The Nasdaq climbed 0.7 percent and the S&P 500 rose 0.6 percent, their seventh week of advances in eight weeks.
The Dow's two-month gain of 17.2 percent also was the largest since January to February of 1987, when blue-chips climbed 17.3 percent.
Analysts said investors remain optimistic about the strength of the economic recovery, leading to eight straight weeks of Dow gains. Since hitting a five-year low on Oct. 9, blue chip stocks have gained about 1,600 points, or 22 percent.
Still, they caution that stocks remain vulnerable to declines on profit-taking. In addition, many investors are closely watching to see how retailers fare today, the traditional opening of the holiday shopping season. Tensions with Iraq also continue to weigh on the market.
"It would be unlikely to have the market go straight up without having some kind of a test," said Berman. "Hopefully, it's going to hold above the October lows."
UAL, the parent of United Airlines, slid 84 cents, or 23.1 percent, to $2.79 after its machinists union rejected wage concessions that were part of the company's effort to stay out of bankruptcy.
Gainers included EP Medsystems, surging $2.52, or 105 percent, to $4.92 after the company said the Food and Drug Administration gave it approval to market its Alert catheter system in the United States.
Declining issues narrowly outnumbered advancers on the New York Stock Exchange. Consolidated volume was light at 849 million on what is traditionally the slowest trading day of the year.
The Russell 2000 index, which tracks smaller company stocks, fell 3.88, or 1 percent, to 406.36.
Overseas, Japan's Nikkei stock average finished 0.4 percent higher.
In Europe, Germany's DAX index was down 1.2 percent, France's CAC-40 declined 0.1 percent, and Britain's FTSE 100 declined 0.4 percent.