Posted on: Tuesday, February 8, 2005
Lack of catalyst cited as stocks take slight dip
By Michael J. Martinez
Associated Press
NEW YORK — Stocks dipped lower yesterday despite a sharp drop in oil prices and new strength in the dollar as investors worried about the market's ability to hold its gains after last week's rally.
"The question now is whether last week was just a technical bounce, or if there's something here that we can trade on to the upside," said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati. "So today, you have people waiting to see whether these gains stick."
There was no catalyst to keep buyers in the market yesterday. President Bush released his $2.57 trillion budget proposal, which slashed spending across a wide swath of programs, but also included a record deficit.
Even a new three-month high for the dollar and a sharp drop in crude oil futures failed to move stocks. A barrel of light crude closed at $45.28, down $1.20, on the New York Mercantile Exchange.
The dearth of news yesterday led to very little movement in the indexes. They blipped higher after Bush released the budget, then settled back down again for most of the session.
Declining issues barely outnumbered advancers on the New York Stock Exchange, where consolidated volume came to 1.75 billion shares, compared with 2.10 billion Friday.
Investors hoped the new week would extend an advance forged on mostly positive fourth-quarter earnings reports and reassuring economic data. Instead, yesterday's light trading meant that many players kept to the sidelines, uncertain if the rally had staying power, particularly in light of the market's poor performance in January.
