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The Honolulu Advertiser

Posted at 11:55 a.m., Monday, March 8, 2004

Acquisitions unable to inspire investors

Hawai'i Stocks
Updated Market Chart

By Michael J. Martinez
Associated Press

NEW YORK — Another lackluster trading session sent stocks lower today despite a wave of corporate deals that underscored the economy’s overall health. Technology issues led the selling as investors moved to less risky stocks.

Investors appeared focused on the lingering disappointment over the country’s slow job growth, even though a fresh wave of acquisitions showed corporate America was still betting on a growing economy. The government on Friday reported that the nation’s payrolls grew by just 21,000 in February, leaving the unemployment rate stuck at 5.6 percent.

"If nothing else the jobs figure shows that companies are keeping costs down, and that’ll help earnings," said Peter Dunay, chief market strategist at Wall Street Access. "At least in the near-term, corporate profitability will be a key driver in this market."

According to prelminary calculations, the Dow Jones industrial average lost 66.07, or 0.6 percent, to 10,529.48, hitting it’s lowest level since Feb. 5.

Broader stock indicators also fell. The Standard & Poor’s 500 index dropped 9.66, or 0.8 percent, to 1,147.20, and the Nasdaq composite index was down 38.85, or 1.9 percent, at 2,008.78.

Some investors may have felt that tech stocks, which drove the 2003 rally, were overvalued, especially with mixed outlooks on 2004 sales, analysts said. That moved investors to more defensive positions in large-cap, blue chip stocks.

"What you’re seeing here is a move out of technology, led by semiconductors, and into defensive stocks," said Michael Sheldon, chief market strategist at Spencer Clarke LLC. "There’s nothing else pushing the market right now. We’ve run out of gas."

BellSouth Corp. announced it would sell its stake in 10 Latin American wireless operations to Spain’s Telefonica SA for $4.2 billion in cash and $1.5 billion in assumed debt. The deal will help BellSouth as Cingular Wireless, a joint venture with SBC Communications Inc., prepares its $41 billion acquisition of AT&T Wireless Services Inc.

BellSouth shed 4 cents to $28.80 and AT&T Wireless was down 12 cents at $13.44.