- The Washington Times - Tuesday, April 16, 2002

NEW YORK (AP) Mixed earnings from Citigroup and Eli Lilly set off more selling on Wall Street yesterday as investors, still unimpressed by first-quarter reports, shied away from commitments to stocks.

Trading volume was light, a reflection of investors' unwillingness to participate until corporate forecasts become less murky. Analysts said that until companies start to express confidence that business is improving, a rally is unlikely.

"So far, earnings have not created a catalyst. There's no dramatic guidance to think the future's going to be better, and then you have this overhang in the Middle East," said Larry Wachtel, a market analyst at Prudential Securities. "No one is emboldened to step up to the plate in an environment like this."

The Dow Jones Industrial Average closed down 97.15, or 1 percent, at 10,093.67. It was the blue-chip gauge's lowest close since Feb. 22, when the index was at 9,968.15.

Broader stock indicators also struggled. The Standard & Poor's 500 Index fell 8.46, or 0.8 percent, to 1,102.55, while the technology-focused Nasdaq Composite Index lost 2.41, or 0.1 percent, to 1,753.78.

The sell-off was the latest in a series of pullbacks caused by investors' growing pessimism. First-quarter earnings reports this month were supposed to show business was turning around, but so far they have been a disappointment. Although the numbers themselves have been satisfactory, most companies have been reluctant to say a turnaround has started, and that has raised concerns that profits won't be robust enough to support higher stock prices.

Investors had hoped that this week's reports, which include some of the nation's biggest and most important companies, would provide some momentum. That didn't happen yesterday.

Citigroup fell $1.18 to $45.92 after its first-quarter results fell below Wall Street's expectations owing to losses in its Argentine holdings.

Drug maker Eli Lilly gained $1.78 to $75.20 after meeting analysts' expectations for the first quarter despite its third consecutive quarterly earnings decline of more than 20 percent.

General Electric, which reported disappointing results last week, fell $1.70, or 5.1 percent, to $31.85 after a New York Times article questioned the company's earnings prospects.

"Investors are wanting a recovery, hoping for a recovery, but day by day, they're getting these disappointments and setbacks," said Tim Leach, chief investment officer for Wells Fargo's Private Client Services.

The losses were less severe for tech stocks. Intel lost 37 cents to $28.02 a day before its earnings were to be reported. The chip-maker is considered a bellwether for the sector, and many people are waiting to hear what it has to say about business and the future.

After the market closed, Texas Instruments reported first-quarter results slightly above expectations, and expressed optimism that its business was turning around. The stock rose 87 cents to $33 in late trading, adding to a 33-cent gain during the regular session

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