- The Washington Times - Wednesday, August 21, 2002

NEW YORK (AP) A burst of profit-taking sent stocks lower yesterday as investors cashed in some of their winnings after two weeks of sizable gains. The Dow Jones industrials fell nearly 119 points.
"The market seems a little tired," said Michael Murphy, head trader at Wachovia Securities. "We've had a pretty good mood the last eight days. So some sort of pullback or digestion of the recent gains would be in order."
The Dow closed down 118.72, or 1.3 percent, at 8,872.07, following a 213-point, or 2.4 percent, advance Monday. The broader market was also lower. The Nasdaq Composite Index fell 17.95, or 1.3 percent, to 1,376.59, having risen 2.5 percent in the previous session. The Standard & Poor's 500 index declined 13.27, or 1.4 percent, to 937.43, after a gain of 2.4 percent.
The Russell 2000 index, which tracks smaller-company stocks, fell 3.45, or 0.9 percent, to 397.84.
Among the losers were companies that posted disappointing earnings results. Agilent Technologies, down $1.24 at $16.20, and pharmaceutical company Andrx, down 26 cents at $23.82, fell on bigger-than-expected losses.
But analysts said investors were still fairly upbeat, a sentiment that has allowed the market's three major indexes to advance for two weeks in a row, the first time they've managed that feat since the two-week period ending March 8.
Still, they say stocks remain vulnerable to sell-offs in the coming weeks, especially as some companies issue third-quarter profit warnings that will remind investors that the economy continues to struggle. The market's upside is limited until there are concrete signs of an economic turnaround, analysts said.
"The lack of real economic news is basically setting the stage for the market to retreat and consolidate its gains," said Stephen Carl, principal and head of equity trading at the Williams Capital Group.
The Commerce Department reported that the U.S. trade deficit decreased marginally to $37.2 billion in June amid a surge in exports. But the report had little, if any, effect on trading. The deficit was still the country's second-largest ever.
Yesterday's gainers included retailer Home Depot, rising $1.22 to $30.25 on better-than-expected second-quarter earnings.
Martha Stewart Living Omnimedia rose 91 cents to $9.05 as its chief executive and namesake prepared to meet a congressional deadline to deliver documents relating to the sale of her ImClone stock.
ImClone, however, fell 5 cents to $8.21, as former CEO Samuel Waksal faced an end-of-the-month deadline for turning his travel, phone and expense records over to congressional investigators.
Declining issues outnumbered advancers 9 to 5 on the New York Stock Exchange. Consolidated volume was light at 1.65 billion shares, compared to 1.61 billion on Monday, as many investors were away on vacation.


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