- The Washington Times - Tuesday, August 13, 2002

NEW YORK (AP) Wall Street stalled yesterday as investors took profits from last week's big rally and considered the possibility that the Federal Reserve might not cut interest rates after all. Blue chips pulled back slightly, while technology shares managed a small gain.
Analysts said would-be buyers wanted to see what retail earnings and other economic data looked like, and whether companies would meet a government deadline to certify financial statements later this week.
The Dow Jones Industrial Average closed down 56.56, or 0.7 percent, at 8,688.89, cutting short a four-session winning streak and into its 432-point gain last week.
Broader stock indicators were mixed. The Standard & Poor's 500 Index slipped 4.84, or 0.5 percent, to 903.80. The Nasdaq Composite Index was little changed, rising 0.72 to 1,306.84.
Although the market's losses narrowed late in the day, analysts were hesitant to read too much into the move, noting that trading volume was light suggesting most investors were staying away or locking in gains from last week's powerful rally.
"There's just not much going on today. People are just waiting to see what the Fed is going to do Tuesday, who does or doesn't sign their financial documents on the 14th and to see if market can continue its uptrend," said Robert Streed, portfolio manager of Northern Select Equity Fund in Chicago.
Stocks rose steadily last week on a mix of bargain hunting after a huge sell-off and hope that the Fed might cut interest rates further because of data suggesting that the economy is faltering. The Fed's Open Market Committee is scheduled to meet today, but by yesterday most analysts were downplaying the possibility of a reduction.
"At one time the market had hoped they were going to cut, I don't think the Fed is going to. They're going to remain on the sidelines," said Mike Kayes, chief investment officer at Eastover Capital.
US Airways' decision to file for bankruptcy over the weekend soured the session for the airlines sector. UAL, United Airlines' parent, fell $1.40 to $3.80, a decline of 26.9 percent, on concerns the airline might be the next carrier forced into bankruptcy. US Airways shares did not trade on the New York Stock Exchange yesterday.
Boeing, which makes airplanes, fell 50 cents to $40.50.
Technology stocks, which had enjoyed sizable gains last week, struggled. Intel fell 33 cents to $17.53 after Salomon Smith Barney reduced its estimates on the stock, citing soft demand. Applied Materials, which counts Intel as one of its biggest customers, slipped 28 cents to $13.58 ahead of earnings due out today.
Imclone rose 68 cents to $8.02 after a not guilty plea yesterday by founder and Chief Executive Officer Samuel Waksal to insider-trading charges. Mr. Waksal also said he still believed his company's highly touted cancer drug, Erbitux, has the potential to help thousands of cancer victims.
Investors were also focused on retailers, many of whom are expected to report earnings today including J.C. Penney and Wal-Mart. Penney rose 12 cents to $16.75, while Wal-Mart fell 79 cents to $48.41.
Also this week, investors will be watching to see whether the companies required to certify their financial reports meet the Securities and Exchange Commission's deadline tomorrow. Among the companies certifying results yesterday were J.P. Morgan Chase and Kellogg, but that failed to boost their stock prices. J.P. Morgan Chase fell 89 cents to $25.46, while Kellogg dropped 2 cents to $34.70.
Analysts say the main issue for the market remains the prospects for improving profits at companies, many of whom so far have been hesitant to say business is getting better.
"We're going to bounce around until we get a clear picture about whether the economy is going to accelerate in the second half or consumer spending will slow," Mr. Kayes said.
Declining issues led advancers 8 to 7 on the NYSE. Volume came to 1.03 billion shares.

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