‘Tired’ Dow Decides To Regroup
A second day of profit-taking weighed down the blue-chip sector, but most stocks rose Friday after a report showing that the economy’s growth still hasn’t aggravated inflationary pressures.
The Dow Jones industrial average fell 57.04 to 8,602.52, trimming the week’s gain to 33.13. The blue-chip index nearly crossed 8,700 for the first time with an early 39-point gain, reaching 8,698.42, but then embarked on a steady decline.
“The market got a little tired after a pretty joyful week,” said Jim Weiss, deputy chief investment officer for equities at State Street Research and Management in Boston, noting that the Dow closed at record highs on Tuesday and Wednesday. “Rather than pour more money in, I think money managers just wanted to take the weekend to regroup and think about where they want to go next week.”
The Standard & Poor’s 500 also turned lower, halting a three-session streak of new highs, but the Russell 2000 index of smaller companies posted its third straight record close after a five-month drought. The Nasdaq composite index, weighed down by profit warnings by leading technology names, flirted with a new high for the first time in two weeks, but came up short.
Stocks opened higher amid news that wholesale prices fell for the fourth straight month in February. The Labor Department reported that prices paid to producers such as factories and food-processing plants fell 0.1 percent last month after a 0.7 percent plunge in January.
Interest rates rose in the inflation-sensitive bond market, however, as the February decline in wholesale prices was a shade smaller than expected.
“The market didn’t react much because there’s no news there. There’s a growing recognition that inflation in the United States is tame, but the U.S. economy hasn’t shown any sign of slowing from Asia,” said Robert J. Barbera, chief economist at Hoenig & Co. of Rye Brook, N.Y.
“The question of the hour is, ‘Will the economy slow or will we begin to see some reversal in some of these spectacular inflation numbers?,”’ said Barbera.
Advancing issues outnumbered decliners by a small margin on the New York Stock Exchange, where volume totaled 597.80 million shares, nearly even with Thursday’s tally of 594.94 million.
The S&P fell 1.33 to 1,068.59, and the NYSE composite index fell 0.73 to 557.17. Both measures closed at record highs on Tuesday, Wednesday and Thursday.
The Nasdaq composite rose 7.60 to 1,771.66, moving within 6 points of its record close of 1,777.11, set on Feb. 26. Oracle rose 1-1/2 to 29 3/16 as the most active Nasdaq issue after late Thursday’s better-thanexpected profit report by the database software company.
The Russell 2000 rose 1.00 to 468.77, and the small-company dominated American Stock Exchange composite index rose 1.36 to 715.81, about 6 points shy of a full recovery from the market selloff in late October.
Overseas, Tokyo’s Nikkei stock average rose 2.6 percent, Frankfurt’s DAX index rose 1.0 percent and London’s FT-SE 100 fell 0.2 percent.