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The Honolulu Advertiser
Posted at 12:23 p.m., Friday, May 23, 2003

Stocks gain slightly ahead of long weekend

Hawai'i Stocks
Updated Market Chart

By Amy Baldwin
Associated Press

NEW YORK — Wall Street went into the holiday weekend quietly, with stocks edging higher amid a lack of economic and earnings news.

Analysts, who said the market's advance was limited by profit-taking, were encouraged to see stocks make any gains.

"This market has been pretty resilient," said Michael Murphy, head trader of Wachovia Securities in Baltimore. "The feeling is the economy has finally bottomed out."

The Dow Jones industrial average closed up 7.36, or 0.1 percent, at 8,601.38, according to preliminary calculations.

The broader market was also slightly higher. The Nasdaq composite index rose 2.54, or 0.2 percent, to 1,510.09. The Standard & Poor's 500 index advanced 1.35, or 0.1 percent, to 933.22.

But the major gauges ended the week lower, breaking a three-week winning stretch.

For the week, the Dow lost 0.9 percent, the Nasdaq shed 1.9 percent and the S&P gave up 1.2 percent.

Advancing issues outnumbered decliners slightly more than 2 to 1 on the New York Stock Exchange.

Trading was light as many traders were absent ahead of the long Memorial Day weekend.

"Investors are looking at markets that are basically, not fully, but very reasonably valued. We really need growing conviction of the second-half (economic) recovery to withstand a long advance here," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank.

By the end of today's session, the Nasdaq was up 18.8 percent from where it stood on March 11, when the market's major indicators were at their lowest levels since hitting multi-year lows in October. The Dow has risen 14.3 percent from that point, while the S&P has regained 16.5 percent.

Analysts said investors were also digesting the $350 billion tax-cut bill Congress approved today. The market rallied yesterday when President Bush said he will sign the compromise legislation, which is just under half the $726 billion package he wanted. The package includes accelerated income-tax cuts and reduced tax rates on stock dividends and capital gains.

"I think some people are going to be asking ... how the proposed changes really will affect their portfolios," Caffrey said. "It is a bit too early for investors to change their portfolios."

Among today's gainers, Aeropostale advanced 69 cents to $20.27 after Fulcrum upgraded the clothing retailer to "buy" from "neutral." Walt Disney rose 12 cents to $18.24 on news that it might sell its money-losing chain of retail stores in North America and Europe.

But Freddie Mac fell $1.45 to $57.90 after JMP Securities lowered its rating on the mortgage company to "market perform" from "strong buy."

Wynn Resorts declined 34 cents to $18.64 after Thomas Weisel downgraded the casino and resort operator to "peer perform" from "outperform."

The Russell 2000 index, the barometer of smaller company stocks, rose 3.31, or 0.8 percent, to 418.40.

Japan's Nikkei stock average finished today up 1.7 percent. France's CAC-40 declined 0.2 percent, Britain's FTSE 100 lost 0.3 percent and Germany's DAX index fell 1.5 percent.