- The Washington Times - Thursday, April 25, 2002

NEW YORK (AP) Lower prices and a bright outlook from Amazon.com failed to sustain what had been a respectable rally on Wall Street yesterday, and prices ended by falling for the third straight day.
It was also the market's fifth losing session in the past six. Stocks have been hard-pressed to hold on to gains amid generally lackluster earnings reports and disappointing forecasts.
"Investors just need more to be convinced. We need to see the scales tipping to profit recovery," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. "Right now, we are kind of balanced between optimism about recovery and fears of backsliding back into recession."
The Dow Jones Industrial Average closed down 58.81, or 0.6 percent, at 10,030.43, giving back an earlier advance of 74.18. The Dow, which dropped 167 points the previous two sessions, on Tuesday hit its lowest close since Feb. 22 when it stood at 9,968.15.
The broader market followed the same path as the blue chips. The Nasdaq Composite Index fell 16.95, or 1.0 percent, to 1,713.34, having risen 16.23 earlier. The Standard & Poor's 500 Index declined 7.82, or 0.7 percent, to 1,093.14 after advancing 7.50.
Mr. Kleintop attributed the late sell-off to weak money flows from mutual fund investors, who account for many of Wall Street's largest trades. By late afternoon, institutional investors, including those who buy for mutual funds, didn't have "the fuel to go out there and buy stocks," he said.
While there was Amazon's positive-earnings news, analysts said much of the earlier upturn was based largely on lower prices since the recent sell-off. For a certifiable rally, more companies must produce upbeat outlooks and profits.
"The market remains in a very nervous state. Investors are not willing to rush in. That's what this is all about," said Peter Cardillo, president and chief strategist of Global Partner Securities Inc. "The missing link for a sustained rally is earnings growth."
Indeed, the market seemed to have a hard time deciding how to react to the Commerce Department's report that orders to U.S. factories for big-ticket items fell 0.6 percent in March because of waning demand for cars and computers. It was the first such decline in four months, and worse than the flat reading analysts expected.
Computer and car makers were among yesterday's losers. IBM fell 83 cents to $86.50, and Ford declined 23 cents to $16.22.
But the market's losses were spread across a variety of sectors. Microsoft fell 97 cents to $53.02, Citigroup stumbled 80 cents to $44.70, and Wal-Mart declined 60 cents to $57.45.
And, Exxon Mobil, which Tuesday missed first-quarter earnings expectations by 8 cents a share, fell $1.05 to $40.30.
There were few earnings-related winners, the biggest being Amazon. The Internet retailer surged 19.4 percent, up $2.73 at $16.79, after raising its 2002 revenue estimates and posting a smaller-than-expected first-quarter loss. Additionally, Amazon said sales rose 21 percent over the first quarter of last year.
The market kept a close watch on AOL Time Warner, up 19 cents at $19.30, ahead of its earnings due later.
After the market closed, AOL reported earnings of 3 cents a share. Wall Street had expected earnings of 14 cents a share, but that number did not reflect a one-time charge of $54.2 billion to account for the decline in the company's market value since the $106 billion merger of America Online and Time Warner was announced in January 2000.

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