January rally erased by economy, war fear

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Associated Press

NEW YORK — Wall Street gave up all but the last of its New Year's rally today, falling for a fifth straight session as investors unloaded shares following tepid earnings from J.P. Morgan Chase and Eastman Kodak.

The Dow Jones industrials, which had risen 500 points in early January on hopes of better prospects for 2003, fell 124 points and sacrificed the last of its advance. The Dow's gains were wiped out over the last five days amid growing pessimism of a sluggish economy ahead.

The Standard & Poor's 500 index, the benchmark followed by professional traders, also lost all of its gains for the year.

"Weighing heavily is not so much the earnings, but a sour look from many CEOs and companies in the way they view the following year," said Charles Pradilla, chief investment strategist at SG Cowen Securities.

The Dow closed down 124.17, or 1.5 percent, at 8,318.73, for a five-day loss of 524 points. The S&P 500 fell 1.5 points below its Dec. 31 level, losing 9.26, or 1 percent, to 878.36.

But the Nasdaq composite index clung to 24 points of its 2003 advance, although it fell 4.67.

Dow industrial Eastman Kodak dropped $4.41 to $33.18 after the photography company reported quarterly earnings that missed Wall Street's estimates.

J.P. Morgan, another Dow stock, declined 72 cents to $24.70 after the financial company reported a quarterly loss wider than analysts expected.

Stocks have slid in recent days amid growing tensions with Iraq and tepid profit outlooks.

"We had a more optimistic tone into the new year, but now we're getting into earnings season and we haven't been getting enough guidance to sink our teeth into," said Bryan Piskorowski, market commentator at Prudential Securities. "But the inertia really stems from Iraq," he added. "Not only Wall Street but corporate America has their hands tied from the situation in Iraq."

Declining issues outnumbered advancers 9 to 5 on the New York Stock Exchange.