- The Washington Times - Friday, March 15, 2002

NEW YORK (AP) Caution dominated stock trading yesterday as investors made modest purchases of blue chips but also collected profits, limiting the market's advance and giving the tech sector a losing session.

Wall Street's gains grew out of news from the government that companies are rebuilding their inventories.

But analysts said investors were also cashing in wins from the past month as they pondered whether stocks have more potential for rallies ahead of first-quarter earnings results due out in April.

"The theme here is that the economic recovery is taking hold," said John C. Forelli, portfolio manager for Independence Investment LLC in Boston. "Everyone is trying to guess the pace of the recovery and which sectors will do best."

The Dow Jones Industrial Average closed up 15.29, or 0.2 percent, at 10,517.14 after falling 130.50 Wednesday.

The Dow has gained 5 percent in the past month, and on Tuesday hit its highest closing level of the year, 10,632.35.

"It was real, serious buying that brought us to these levels. We are waiting for new breakthrough buying to bring us to the next levels," said Ronald J. Hill, investment strategist at Brown Brothers Harriman & Co.

Broader market indicators declined. The technology-dominated Nasdaq Composite Index fell 7.89, or 0.4 percent, to 1,854.14. Trading in technology has been sluggish with the Nasdaq essentially flat with its level of four weeks ago.

The Standard & Poor's 500 index slipped 1.05, or 0.1 percent, to 1,153.04.

The Commerce Department said businesses rebuilt inventories by 0.2 percent in January, the first such increase in a year and another optimistic sign that the recession will soon be over.

But technology stocks still fell. Analysts said high-tech companies are waiting for their corporate customers to increase their capital spending.

Microsoft fell 88 cents to $61.22, and Intel stumbled 37 cents to $30.97.

Oracle declined 45 cents to $13.44, and after the close reported fiscal third-quarter profits that met analysts' expectations. The software maker, which also said spending on technology is lagging, gained 4 cents in the extended-trading session.

Other losses came from companies whose earnings results disappointed investors.

Lands' End dropped 14 percent, down $7.70 at $46.99 after missing fourth-quarter expectations by a penny a share.

Wall Street's biggest gains came out of "old economy" sectors, such as manufacturing, which often are the first to emerge from recession.

Caterpillar climbed $1.17 to $58.66, while 3M rose $1.09 cents to $120.59. Both are Dow industrials.

Eastman Kodak, also a Dow stock, rose $1.35 to $32.35 after reaffirming its first-quarter and full-year outlook.

Advancing issues outnumbered decliners 17 to 13 Thursday on the New York Stock Exchange. Volume totaled 1.2 billion shares, below Wednesday's 1.34 billion shares.

The Russell 2000 index, which measures the performance of smaller-company stocks, rose 2.31, or 0.5 percent, to 497.76.

Overseas, Japan's Nikkei stock average closed Thursday up 1.3 percent. In Europe, Germany's DAX index gained 0.6 percent and France's CAC-40 rose 0.5 percent, while Britain's FT-SE 100 fell 0.2 percent.

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