- The Washington Times - Thursday, August 22, 2002

NEW YORK (AP) Investors resumed buying stocks yesterday, sending prices moderately higher after a bout of profit-taking ran its course. Technology was the session's biggest winner, giving the Nasdaq Composite Index its first close above 1,400 in six weeks.
"The market is a little stretched so you're going to see some backing and filling," said Steven Goldman, chief market strategist with Weeden & Co. in Greenwich, Conn. "Today, after pulling back, you're seeing no signs of exhaustion."
The Nasdaq Composite Index closed up 32.66, or 2.4 percent, to 1,409.25, having last finished above 1,400 on July 8. Yesterday's finish was the Nasdaq's best since July 5 when it stood at 1,448.36.
The market's other major gauges were also higher. The Dow Jones Industrial Average climbed 85.16, or 1 percent, to 8,957.23, after falling 118 on Tuesday. The blue-chip index has rebounded more than 1,200 points since hitting a low of 7,702.34 on July 23.
The Standard & Poor's 500 index advanced 11.93, or 1.3 percent, to 949.36. The Russell 2000 index, the barometer of smaller company stocks, rose 8.95, or 2.3 percent, to 406.79.
Investors have been generally upbeat after two straight weeks of gains. A lack of major negative news so far this week has also helped stocks move higher. Despite Tuesday's decline amid profit-taking, the market's indexes have netted gains so far for the week.
But analysts said stocks are still vulnerable to profit-taking, particularly when companies start issuing third-quarter profit warnings later this month and in early September.
"We had a recent run-up in the market that was impressive," said Alan Ackerman, executive vice president at Fahnestock & Co. "A sustainable advance may take time to develop."
Technology got a boost from Internet Security Systems, which rose 73 cents to $18.15 after an upgrade from the investment firm Raymond James.
Despite forecasting a third-quarter loss, chip-equipment maker Newport Corp. rose 79 cents to $19.04 after announcing it will lay off between 225 and 275 employees.
Tech bellwethers were also strong with Microsoft rising $1.24 to $52.28 and Intel advancing 59 cents to $19.56.
The market also owed part of its advance to specialty retailers that posted better-than-expected earnings. Gymboree rose $1.45 to $16.35 and Talbots climbed 89 cents to $33.20.
AOL Time Warner Inc. gained 97 cents to close at $14.33, while AT&T; Corp. rose $1 to $12.18 after AOL said it will pay AT&T; $3.6 billion in cash and stock and give AT&T; a stake in its cable business to regain full ownership of the HBO network and Warner Brothers film studio.
Daktronics Inc. rose 76 cents to $10.57 after reporting first-quarter earnings of 16 cents a share, surpassing analysts' expectations by 3 cents. The company designs and manufacturers display systems such as scoreboards and shot clocks.
On the downside, RadioShack fell 16.4 percent, down $4.74 at $24.21, after lowering its third-quarter earnings and sales outlook.
BJ's Wholesale Club Inc. slipped 5 cents to $26.65 after UBS Warburg downgraded its shares to "hold" from "buy."
Brokerage stocks were weak after a downgrade by Salomon Smith Barney. Lehman Brothers dropped $2.20 to $58.98, and Bear Stearns fell 33 cents to $65.79.
Advancing issues outnumbered decliners 5-to-2 on the New York Stock Exchange. Volume was light at 1.32 billion shares, but ahead of Tuesday's 1.30 billion shares.
Overseas, Japan's Nikkei stock average finished up 0.2 percent. In Europe, France's CAC-40 advanced 1.3 percent, Britain's FTSE 100 slipped 0.1 percent, and Germany's DAX index climbed 2.6 percent.

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