Posted at 12:02 p.m., Monday, October 28, 2002
Profit-taking puts pressure on market
By Hope Yen
"The market is apparently taking a little bit of a breather here," said Charles G. Crane, strategist for Victory SBSF Capital Management. "There were no particularly important economic statistics released today. We got through the bulk of the earnings season.
"So I think investors came into work today thinking what might happen with the elections next week and what has happened with the market the last three weeks," he said.
The Dow Jones industrial average fell 75.95, or 0.9 percent, to close at 8,368.04, according to preliminary calculations, having gained 1.5 percent last week. Earlier in the day, the blue chips gained as much as 87 points.
The Nasdaq composite index declined 15.37, or 1.2 percent, to 1,315.76, after climbing 3.4 percent last week. The Standard & Poor's 500 index dropped 7.44, or 0.8 percent, to 890.21, after last week's 1.5 percent gain.
Analysts say investors are more upbeat about stocks following three weeks of gains on better-than-expected earnings. Since hitting a five-year low on Oct. 9, the Dow has climbed more than 1,100 points.
But analysts say stocks are vulnerable to profit-taking as investors fret about the market's long-term strength. Concerns about a war with Iraq and the economic recovery also may pressure stocks.
Indeed, some analysts expect stocks to drift lower on profit-taking until economic reports on unemployment and manufacturing are released later this week. The numbers will help investors gauge the likelihood of an interest rate cut when the Federal Reserve meets next week.
Decliners included Kellogg, which fell $2.13 to $33.02, after the cereal maker beat third-quarter earnings estimates but said it expected to earn between $1.86 and $1.90 per share for 2003. Analysts were expecting $1.90 per share.
Gainers included Citigroup, which rose 60 cents to $36.30, after Lehman Brothers raised the bank's stock rating to "overweight," the equivalent of a "buy" rating.
Declining issues outnumbered advancers 8 to 5 on the New York Stock Exchange. Volume was moderate.
The Russell 2000 index, which tracks smaller company stocks, fell 3.63, or 1 percent, to 369.01.
Overseas, Japan's Nikkei stock average finished today up 0.4 percent. In Europe, France's CAC-40 was up 2.1 percent, Britain's FTSE 100 rose 1 percent, Germany's DAX index jumped 2.7 percent.