- The Washington Times - Wednesday, October 24, 2001

NEW YORK (AP) Caution crept back into Wall Street yesterday as fears about terrorism resurfaced, but the nervousness wasn't enough to stop investors from trying to move the market higher. The major stock indexes fluctuated before ending the session with modest declines.
The market gave up early gains after a midday news conference by U.S. Attorney General John Ashcroft, who reported that three German-based terrorists are being sought for planning the Sept. 11 terrorist assaults on the World Trade Center and Pentagon.
Soon after, Washington officials confirmed that the deaths of two postal workers were caused by inhalation anthrax.
The news reawakened Wall Street's concerns about national security and how the market will fare as the United States retaliates for the attacks.
But the market's performance wasn't surprising given the Dow Jones Industrial Average's 172-point surge on Monday.
While a number of companies yesterday reported satisfactory results, analysts said that wasn't enough to sustain a rally, especially given investors' fears about terrorism.
The Dow closed yesterday's session down 36.95 at 9,340.08.
The broader market also finished lower. The Nasdaq Composite Index slipped 3.64 to 1,704.44, while the Standard & Poor's 500 index fell 5.12 to 1,084.78.
Analysts weren't too worried about the slippage, noting there are signs of strength in the market.
One positive has been in the way stocks have held up despite a fairly tepid earnings season, which began in earnest last week.
Amid yesterday's trading, the market displayed some stability, evident in that nearly as many stock prices rose as fell on Wall Street.
The market entered earnings season in decent health, having recovered substantially from its sharp decline in the first week of trading after attacks.
The Dow has regained about 80 percent of the 1,369 points it lost that week. The Nasdaq is 9 points above its preattack level; the S&P; 500 is 8 points below its Sept. 10 level.
"That has to be construed as extremely bullish," said Al Mirman, market strategist at V Finance in Sarasota, Fla.
Still, the market's recent strong gains combined with the news about terrorism gave still skittish investors reason to sell, particularly those companies that disappointed them.
"There may be inclinations to take some profits. … When we're not going to have the support of the better earnings, the market is going to be more headline-driven," said Jon Brorson, director of equities at Northern Trust in Chicago.
Among yesterday's losers, agriculture company Monsanto tumbled $4.23 to $32.56, on a loss that was 2 cents a share higher than Wall Street had anticipated.
Pharmacia slid $4.37 to $38.39 after projecting 2002 per-share earnings to be in a range of $1.91 to $1.96, below the $2 Wall Street was expecting.
The drug maker's negative outlook overshadowed its third-quarter earnings, which met expectations, and its backing of its 2001 targets.
Lucent fell 26 cents to $6.64 after posting a wider-than-expected loss yesterday.
SBC Communications was the weakest Dow industrial for the second straight session, falling $2.62 to $38.78. On Monday, SBC missed earnings expectations by a penny a share.
Winners included companies that surpassed or met analysts' earnings expectations. DaimlerChrysler rose 83 cents to $35.86 after beating analysts' forecasts and affirming its full-year targets.
Consumer products maker Kimberly-Clark, which met expectations, advanced $1.14 to $54.36.
Investors were cautious in dealing with companies including Amazon.com and Compaq Computer that were due to release earnings at the end of the day.
Amazon, which rose 78 cents to $9.55, fell 54 cents in extended-hours trading after meeting expectations, posting a loss of 16 cents a share, but indicating the business remains difficult.
The Internet retailer announced 1,300 job cuts and said fourth-quarter sales will range from flat to up 10 percent.
Compaq lost a penny more than analysts had estimated, but its stock was unchanged in after-hours trading.
Compaq ended regular trading down 25 cents at $9.40.
Declining issues narrowly outnumbered decliners 16 to 15 on the New York Stock Exchange. Volume was 1.3 billion shares, ahead of the 1.1 billion shares traded Monday.
The Russell 2000 index, the barometer of smaller-company stocks, fell 3.13 to 427.37.
Stocks traded sharply higher overseas yesterday. Japan's Nikkei stock average ended the day up 2.8 percent.

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