- The Washington Times - Thursday, October 3, 2002

NEW YORK (AP) Wall Street retreated yesterday as wary investors followed a now-familiar pattern of locking in profits after a huge rally. The Dow Jones industrials had their eighth straight triple-digit move, falling more than 180 points and wiping out more than half their gain of the previous session.
An earnings warning from Dow Chemical gave investors another reason to sell. But the decline was unsurprising given investors' worries about earnings and the fact that the market has been unable to hang on to gains.
Investors have also been concerned about the potential of war with Iraq.
"There is an awful lot of indecision, a lack of clarity as to where are we headed," said Tim Leach, chief investment officer for Wells Fargo's Private Client Services, about both the economy and Iraq.
Indeed, there was much indecision on Wall Street yesterday. The Dow was down more than 100 points in early trading, recovered to an advance of 30 points in the afternoon, and then turned sharply lower during the afternoon.
The Dow closed down 183.18, or 2.3 percent, at 7,755.61, after surging 346 points in the previous session, its biggest one-day gain in two months and eighth-largest ever. The blue chips have been in a pattern of having one huge up day for every two or three big drops.
Before Tuesday's rally, the Dow suffered a two-day 406-point loss. Of the Dow's eight straight triple-digit moves, five have been to the downside.
The broader market was also lower. The Nasdaq Composite Index fell 26.42, or 2.2 percent, to 1,187.30. The Standard & Poor's 500 index fell 20, or 2.4 percent, to 827.91. The Russell 2000 index fell 7.87, or 2.1 percent, to 360.22.
Earnings woes have fueled much of the market's recent sell-offs as analysts' growth estimates for companies have fallen to about 8 percent from about 20 percent. Throughout September, companies scaled back their profit expectations, prompting investors to unload stocks.
The market's challenge in October is getting past third-quarter results themselves, which firms will begin releasing next week.
"We are still in [earnings] preannouncement season and warnings are outpacing upwards guidance by about 2 to 1," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia.
Investors sold off stocks with disappointing earnings news yesterday. Dow Chemical fell $2.55 to $27.25, after the nation's second-largest chemical company cut its third-quarter earnings estimate. Competitor DuPont declined $2.32 to $37.31.
Swiss banking giant Credit Suisse fell $1.76 to $18.29 after warning it will post a third-quarter loss because of shortfalls at its investment bank and insurance units.
Advent Software fell 79 cents to $10.81 after warning that revenue for the third and fourth quarters will miss analysts' expectations.
But Dell Computer rose 64 cents to $25.32, after raising its third-quarter sales forecast and reaffirming its earnings outlook late Tuesday.
Clothing retailer Chico's climbed 38 cents to $16.31 on news that September sales were stronger than expected and that the company was reiterating its third-quarter outlook.
"As we negotiate through earnings season, if companies can give us information that suggests maybe earnings are beginning to improve that is the thing that the market wants to see," said Mike Weiner, managing director of equities at Banc One Investment Advisors in Columbus, Ohio.
Declining issues outnumbered advancers slightly more than 9 to 4 on the New York Stock Exchange. Volume totaled 1.66 billion shares, below Tuesday's 1.73 billion.
Overseas, Japan's Nikkei stock average finished yesterday down 1.2 percent. In Europe, France's CAC-40 climbed 4 percent, Britain's FTSE 100 rose 2.8 percent and Germany's DAX index gained 2.2 percent.

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