- The Washington Times - Saturday, July 13, 2002

NEW YORK (AP) Conflicting economic reports frustrated investors yesterday, prompting them to bail further out of the stock market. The Dow Jones Industrial Average fell as much as 201 points before trimming its loss to 117, its fourth triple-digit drop in five sessions.

It marked the eighth-straight losing week for Wall Street, and the 695 points the Dow lost this week was its largest weekly point decline since Sept. 21 when it plummeted 1,367.

The market's three major indexes have not finished a week higher since mid-May. Rather, stocks have tumbled on persistent worries over corporate bookkeeping practices and earnings.

Yesterday's selling accelerated by late afternoon, derailing what had been a solid technology rally earlier in the day on a positive forecast from Dell Computer.

Investors were shaken by a drop in a measure of consumer confidence and a downgrade of Home Depot. As trading wore on, they were less soothed by positive forecasts from Dell Computer and General Electric.

"What the market is saying is: Be very defensive," said Gary Kaltbaum, market technician for Investors' Edge Partners in Orlando, Fla.

Trading was volatile, especially for the Dow, which swung from a gain of 47 points to a loss of 201.

The Dow closed down 117, or 1.3 percent, at 8,685. The blue-chip index ended the week with four triple-digit declines. The Dow's total weekly loss: 695, or 7.4 percent.

The market's broader indicators also recorded losses for yesterday and the overall week. The Nasdaq Composite Index slipped 0.93, or 0.07 percent, to 1,374. For the week, the Nasdaq lost 75, or 5.2 percent.

The Standard & Poor's 500 index fell six points, or 0.6 percent, to 921. The S&P ended the week down 68, or 6.8 percent.

Analysts attributed yesterday's volatility to program trading, when computers generate "buy" orders when stocks fall to a specified level and "sell" orders when stocks rise.

"The tone is still bearish," said Larry Wachtel, market analyst at Prudential Securities.

Investors were disappointed by news about consumers, whose spending accounts for two-thirds of the economy. The University of Michigan's consumer sentiment index for mid-July registered a reading of 86.5, down from 92.4 in June.

That drop in consumer sentiment overshadowed a positive report from the Commerce Department, which said retail sales rose 1.1 percent in June, better than the 0.7 percent increase analysts had forecast. Analysts said that the market is more concerned about how investors are feeling now, rather than how much they spent last month.

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