- The Washington Times - Thursday, August 29, 2002

NEW YORK (AP) A hodgepodge of bad news on Wall Street prompted investors to collect profits again yesterday, sending prices sharply lower for a second straight day.
Analysts said the news ranging from job cuts at Nortel Networks to a downbeat brokerage report on Sun Microsystems contributed to the sell-off that has followed gains for the past five weeks. Light preholiday trading exacerbated the price swings.
"More or less you're looking at a situation where stocks are in for a pause and investors are responding to a more negative tint on the tape," said Jack Caffrey, vice president and equity strategist for JP Morgan Private Bank.
The Dow Jones Industrial Average closed down 130.32, or 1.5 percent, at 8,694.09, after dropping 1.1 percent Tuesday.
The broader market also finished lower. The Nasdaq Composite Index declined 33.40, or 2.5 percent, to 1,314.38, having fallen 3.2 percent Tuesday, the worst one-day drop in three weeks.
The Standard & Poor's 500 Index fell 16.95, or 1.8 percent, to 917.87, following a loss of 1.4 percent a day earlier.
Analysts said bursts of profit-taking like yesterday's are expected, given Wall Street's recent gains as well as the lack of any significant good news that could add to the upward momentum. Since the Dow closed above 9,000 on Aug. 22, the first time in six weeks it accomplished that feat, it has lost 360 points, an indication of how cautious investors remain after the market's protracted decline.
Light volume, as many investors take the week off before the Labor Day weekend, also affected trading.
Investors are concerned about the strength of the economic recovery. But despite the latest pullback, analysts said the market's tone is still generally good, now that accounting scandals appear to be fading.
Several technology stocks declined again yesterday, with Semtech falling $4.87, or 25.7 percent, to $14.05 after reporting it was seeking to resolve a customer dispute over whether its integrated circuit caused some product failures.
Nortel dropped 19 cents to $1.04 after announcing it would cut 7,000 jobs and lowering its third-quarter revenue outlook. Sun Microsystems fell 28 cents to $3.96 after Goldman Sachs said it didn't expect the company to meet estimates.
UAL shares plunged 61 cents to $3.28 on fears its United Airlines unit may declare Chapter 11 bankruptcy.
Gainers included Philip Morris, which climbed $1.41 to $49.31, after the company raised its quarterly dividend and named Chief Executive Officer Louis Camilleri chairman to replace Geoffrey Bible.

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