- The Washington Times - Tuesday, December 3, 2002

NEW YORK (AP) A strong start to the holiday shopping season sent stocks soaring briefly yesterday, with the Dow Jones industrials climbing above 9,000 for the first time since summer, only to be brought down by another disappointing economic report. Prices were mixed, with tech stocks again one of the market's strongest sectors.
Stocks fell back after a weaker-than-expected reading on manufacturing.
Analysts said investors also second-guessed the weekend's retail sales figures, wondering whether the strength was artificial.
"The market is still looking for any reason to keep on going up. That is why it seized on a very strong retail-sales number. But then you had questions: Was it strong because the [shopping] season is a week shorter this year? Or was it strong because retailers were putting things on sale?" said Tony Cecin, director of institutional trading at US Bancorp Piper Jaffray in Minneapolis.
The Dow closed down 33.52, or 0.4 percent, at 8,862.57, having gained as much as 147.28 earlier when it moved past 9,000. The Dow, up for eight straight weeks, last traded above 9,000 Aug. 27, when it hit 9,040.04, but has not closed above that mark since Aug. 22, when it traded at 9,053.64.
The market's broader gauges, up for seven of the past eight weeks, were mixed. The Nasdaq composite index rose 6.02, or 0.4 percent, to 1,484.80. The Standard & Poor's 500 index fell 1.78, or 0.2 percent, to 934.53.
"We have had a nice little rally. It can't go up by dramatic amounts every day," said Susan L. Malley, chief investment officer for Malley Associates Capital Management in New York.
Investors were conflicted yesterday tempted to take profits from weeks of rallies but also tempted to buy stocks after Dow Jones News reported that retail sales hit an estimated $7.4 billion during the weekend, a 12.3 percent increase over a year ago.
Among yesterday's winners, Wal-Mart rose 22 cents, to $54.38, falling back from an earlier gain of $2.77. Wal-Mart set a record for one-day sales Friday, generating $1.43 billion.
J.C. Penney, which also reported record sales for the Thanksgiving weekend, advanced 84 cents, to $24.57, retreating from an earlier gain of $1.49.
The market gave back much of yesterday's big gains after the Institute of Supply Management reported that its manufacturing business index rose to 49.2 in November from 48.5 in October. The reading was weaker than economists predicted.
A reading below 50 this being the third in a row also points to contraction in the manufacturing sector.
Manufacturing stocks fell after the news. Caterpillar declined 68 cents, to $49.22, and 3M fell $1.50, to $128.35.
Tech stocks including Intel, up 17 cents at $21.05, and Advanced Micro Devices, up 43 cents at $8.93 rose after upgrades by Lehman Brothers.
During the past two months, technology has reveled in the biggest gains on Wall Street, a sign that investors are growing more confident about the market and the economy. Investors' recent optimism is owed largely to surprisingly strong third-quarter profits and hopes for 2003.
In other economic news, the Commerce Department reported that construction spending rose 0.3 percent in October, slightly better than expected.
Advancing issues outnumbered decliners about 7 to 6 on the New York Stock Exchange. Volume was moderate at 1.54 billion shares, ahead of 637.53 million Friday, when the market had only a half-day of trading.
The Russell 2000 index, which tracks smaller company stocks, rose 2.18, or 0.5 percent, to 408.54.
Overseas, Japan's Nikkei stock average finished down 0.5 percent.

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