- The Washington Times - Tuesday, August 27, 2002

NEW YORK (AP) Investors looking for a reason to buy on Wall Street found one yesterday, as an early decline made prices too attractive to pass up. The resulting rally sent stocks moderately higher.
The advance, which came on extremely light volume, followed a wave of profit-taking that began Friday. Investors were buying cautiously, but that wasn't surprising given the size of the market's recent advance and analysts' doubts about the durability of the gains.
"Investors are a little hesitant to commit more capital until September passes," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia. "We probably aren't going to see a rush of buyers in the next few weeks."
The Dow Jones Industrial Average, down more than 116 points at midday, closed up 46.05, or 0.5 percent, at 8,919.01. The Dow dropped 180 points Friday as investors collected profits from five straight weekly gains.
Broader market gauges were also higher yesterday after shaking off an earlier bout of profit-taking. The Standard & Poor's 500 index rose 7.09, or nearly 0.8 percent, to 947.95, having captured five consecutive weekly advances.
The Nasdaq Composite Index advanced 11.12, or 0.8 percent, to 1,391.74, having risen three weeks in a row.
The Russell 2000 index, which tracks smaller company stocks, rose 7.60, or 1.9 percent, to 407.73.
The market's turnaround, which solidified late in the session, indicated how much market sentiment has shifted toward buying rather than selling. Still, analysts said investors are still cautious and want to play it safe ahead of the Labor Day holiday weekend and because of concerns about the possibility of war with Iraq.
Analysts expect investors to continue to trade cautiously in the coming weeks.
"Investors are going to be playing it coolly," said Joseph V. Battipaglia, chief investment officer at Ryan, Beck & Co. LLC. "Given a five-week rally where you can take some profits, it is not surprising."
Whether the market's recent gains are a short-term blip in the bear market or the start of a longer-term, lasting advance remains to be seen. For answers, investors next month will look to see how the market handles the latest round of economic data and third-quarter profit warnings whether they be negative, positive or as expected.
Among Monday's gainers, Hershey Foods rose $1.77 to $76.80 on a report published in USA Today saying that Swiss food and beverage conglomerate Nestle is offering $11.5 billion to acquire the nation's largest candy maker.
Clear Channel Communications rose $1.48 to $34.65 after RBC Capital Markets upgraded the media company.
Hewlett-Packard advanced 15 cents to $14.85 ahead of its fiscal third-quarter earnings due out today.
But UPS fell 57 cents to $64.71 on a downgrade from Morgan Stanley.
And Fairchild Semiconductor dropped $1.20 to $13.45 after Bear Stearns downgraded the stock, citing the company's price cuts.
Advancing issues led decliners 5-to-2 on the New York Stock Exchange. Consolidated volume was very light at 1.28 billion shares, below 1.35 billion on Friday.
Overseas, Japan's Nikkei stock average finished up 2 percent. In Europe, France's CAC-40 fell 1.6 percent and Germany's DAX index lost 1.2 percent. Markets in London were closed for a holiday.

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