Market Investors Take A Breather

Stocks fell modestly today, erasing earlier gains as investors turned their focus to declining corporate profits and an overheating U.S. economy.

The Dow Jones industrial average fell 13.96 at 8,782.12. It was the fourth day of losses for the blue-chip index, which rose nearly 32 points in the first hour of trading today before sliding back.

Broad-market indexes also fell today.

Wall Street today was dragged down by mounting concerns that the Asian economic crisis will hurt corporate profits but won’t slow the U.S. economy enough to prevent inflationary pressures.

Those worries were heightened today by a stronger-than-expected Commerce Department report showing that sales of new single-family homes jumped 4.8 percent in February to a record-breaking, seasonally adjusted rate of 893,000.

Market participants worry that the Federal Reserve in coming months will have to raise interest rates to slow the economy and keep inflation in check. The Fed meets Tuesday, but investors don’t expect a rate hike yet.

In addition, many investors stayed on the sidelines today, holding on to the profits they’ve generated since the beginning of the year. The Dow has climbed more than 11 percent this year, almost crossing the 9,000 mark last week.

“We began to stall last week and now everyone is just ready for a pause,” said Larry Wachtel, market analyst at Prudential Securities. “We have to remember how far we’ve come already this year.”

Some of the stocks that were moving substantially or trading heavily Monday:

NYSE

Coca-Cola, rose 3-1/8 to 78-3/16.

The Atlanta-based soft-drink giant said it expects a 13 to 14 percent surge in worldwide unit case volume in the first quarter. The company also said it expects a similar increase in worldwide gallon sales.

Luxottica Group, rose 5-7/16 at 93-5/8.

The maker of eyeglass frames said it received approval for its proposed five-for-one stock split.

NASDAQ

Koo Koo Roo, rose 1-15/32.

The owner of the Koo Koo Roo California Kitchen fast-food chain named board member and former Chrysler Corp. Chairman Lee Iacocca as the company’s acting chairman.

American Safety Razor, fell 4-3/4 to 18-1/8.

The company expects its first-quarter earnings, before charges, would be up to 43 percent short of their year-earlier level.