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The Honolulu Advertiser
Posted at 12:35 p.m., Friday, June 20, 2003

Blue chips rebound, tech shares drop

Hawai'i Stocks
Updated Market Chart

By Amy Baldwin
Associated Press

NEW YORK — Blue chips staged a moderate comeback from a two-day sell-off today, rising amid investors' growing confidence in the economy and their anticipation of another interest rate cut next week. But technology shares, the biggest gainers in Wall Street's recent rally, succumbed to profit taking.

The market began retreating from larger gains in afternoon dealings due to a technical factor called quadruple witching and jitters that perhaps stock prices had risen too high, too fast.

"Given that the market has had the runup that it has had, it is probably just taking a bit of a breather here. It might be a sign that the market is getting a little tired or is overextended," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia.

After climbing as much as 96.98 during the day, the Dow Jones industrial average closed up 21.22, or 0.2 percent, at 9,200.75. The moderate gain followed a two-day loss of 143.49, its first multiple-day loss in a month. Wednesday's 114.27-point drop was the Dow's biggest one-day decrease in a month.

The market's broader indicators were mixed. The Standard & Poor's 500 index rose 0.99, or 0.1 percent, to 995.69, having gained as much as 7.39 earlier. The Nasdaq composite index fell 3.91, or 0.2 percent, to 1,644.73, retreating from an earlier advance of 11.83.

But all three gauges ended the week higher. The Dow rose 0.9 percent, the Nasdaq advanced 1.1 percent and the S&P gained 0.7 percent. It was the fourth straight winning week for the Dow and S&P.

Trading was choppy, with stocks posting robust gains in the early going but then pulling back in the afternoon due to quadruple witching, the quarterly expiration of index futures and options as well as individual stock futures and options.

Still, analysts say investors' optimism in the economy and the market is indeed growing. Investors are particularly hopeful that the Federal Reserve's Open Market Committee, meeting next week, will again lower interest rates.

"The undercurrent is positive. Chances are growing that we are going to have a good year," said A.C. Moore, chief investment strategist for Dunvegan Associates in Santa Barbara, Calif.

Thomas F. Lydon Jr., president of Global Trends Investments in Newport Beach, Calif. said: "I am starting to hear from people about their 401(k) and their brokerage statements again. People are actually opening them up, for the first time in a year or so. That is a very encouraging sign."

Further proof of investors' more upbeat mood can be found in the stellar progress the major indexes have made since March 11, when the rallies began. The tech-focused Nasdaq has surged 29.4 percent since then, while the S&P has climbed 24.4 percent and the Dow has risen 22.3 percent.

Investment company A.G. Edwards rose 44 cents to $33.64 on quarterly earnings that surpassed analysts' expectations by 5 cents a share.

Advancing issues managed a narrow lead over decliners on the New York Stock Exchange. Due to the quadruple witching, volume was on the heavy side, coming in at 1.69 billion shares, ahead of Thursday's 1.52 billion shares.

The Russell 2000 index, the barometer of smaller company stocks, slipped 0.77, or 0.2 percent, to 449.56.