honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser

Posted at 10:55 a.m., Monday, October 14, 2002

Dow edges up despite lingering concerns

Hawai'i Stocks
Updated Market Chart

By Hope Yen
Associated Press

NEW YORK ­ Stocks managed to post a third straight day of gains today in tepid trading following last week's big market rally and a weekend bomb attack in Indonesia.

Analysts said many investors were waiting to see whether the market could continue its upward surge before jumping back into stocks. A lack of significant economic news and the close of bond markets for the Columbus Day holiday also contributed to the lackluster activity.

"People are trying to decide whether to take profits," said Brian G. Belski, fundamental market strategist at US Bancorp Piper Jaffray. "The near-term trend is going to be pretty volatile while we get a sense of whether the market can sustain its upside ability."

The Dow Jones industrial average rose 27.11, or 0.4 percent, to close at 7,877.40, according to preliminary calculations, after gaining 4.3 percent last week to snap a six-week losing streak. Earlier in the day, blue-chip stocks dropped as much as 105 points.

The broader market also finished higher. The Nasdaq composite index rose 10.06, or 0.8 percent, to 1,220.52, having surged 6.2 percent last week. The Standard & Poor's 500 index gained 6.12, or 0.7 percent, to 841.44, following a weekly advance of 4.3 percent.

Last week's rally boosted the Dow 564 points in two days and followed six weeks of market declines that pushed the Dow to a five-year low and the Nasdaq to a six-year low. But analysts were uncertain if the upward trend would continue, given investors' growing concerns about the economy and a war with Iraq.

Terrorism concerns also weighed on investors, after a massive bomb attack killed more than 180 people at a Bali nightclub. President Bush and Indonesia's defense minister today blamed al-Qaida for the attack.

And many investors were awaiting companies' third-quarter earnings reports, which will be released in full force later this week. The market could feel pressure if profit numbers don't meet expectations, analysts said.

"It's sort of a half-holiday mentality in the equity markets," said Ronald J. Hill, investment strategist at Brown Brothers Harriman & Co. "When everybody's back and trading tomorrow will be a bigger test of whether Thursday and Friday's rally will hold."

Gainers included Merck, which rose $2.30 to $49.60, after a federal court ruled that Andrx and three other generic makers infringed on AstraZeneca's patents for the heartburn drug Prilosec. AstraZeneca climbed $4.05 to $36.60, while Andrx fell $7.99 to $12.

Auto stocks took a hit on a brokerage downgrade of several industry companies from Merrill Lynch. General Motors declined $1.56 to $33.26, while Ford dropped 39 cents to $7.93.

Declining issues were even with advancers on the New York Stock Exchange. Volume was light. The Russell 2000 index, a barometer of smaller company stocks, rose 1.60, or 0.5 percent, to 346.53.

Germany's DAX index was down 2.8 percent, France's CAC-40 fell 0.6 percent, and Britain's FTSE 100 dropped 0.6 percent. Japan's financial markets were closed today for a national holiday.