- The Washington Times - Tuesday, November 19, 2002

NEW YORK (AP) Wall Street pulled back yesterday as investors tried to extend six weeks of blue-chip gains but were stymied by war concerns and a tepid Wal-Mart outlook.
Analysts said investors had little significant economic news to digest, resulting in light trading volume and somewhat exaggerated price swings. Selling to cash in profits from October's big rally also depressed the market.
"What we're seeing is some skittishness from investors in the near term about the prospects of war with Iraq," said Kevin Caron, market strategist at Ryan, Beck & Co. "But I caution that we've already discounted a great deal of anxiety in the market."
"We're beginning a recovery process, and we think we've got significant room to move off these levels. I wouldn't be terribly concerned" about some moderate declines, he said.
The Dow Jones Industrial Average declined 92.52, or 1.1 percent, to close at 8,486.57, snapping a four-day winning streak. Earlier in the day, blue-chip stocks rose as much as 57 points.
The broader market also finished lower. The Nasdaq Composite Index fell 17.45, or 1.2 percent, to 1,393.69. The Standard & Poor's 500 index dropped 9.47, or 1 percent, to 900.36.
Wal-Mart fell $1.81 to $53.68 after the retailer said it expected November sales to fall at the low end of its estimates.
Analysts say investors have been upbeat since October's rally and have faith in a strengthening economic recovery, leading to six straight weeks of Dow advances, the longest weekly winning streak in 3 years.
Indeed, stocks got a big boost last week on stronger-than-expected retail sales and consumer sentiment, raising hopes of continued consumer spending, which accounts for about two-thirds of the nation's economic activity.
"I think what the market feared as far as retail sales going into the holiday is not going to happen," said Scott Wren, equity strategist for A.G. Edwards & Sons. "People are still going to be out there spending money. I think that's one reason why we've been able to hang on to these levels in the Dow."
But analysts caution that terrorism concerns and a war with Iraq continue to weigh on investors' minds and are likely to limit gains in the coming weeks, particularly now that the better-than-expected earnings reports are largely complete.
U.N. inspectors met with Iraqi officials yesterday as they prepared to search for weapons of mass destruction, a mission that could determine whether there is war. Investors are also nervous after the FBI warned last week that al Qaeda was likely to attempt a "spectacular" attack.
"It's never going to be a straight line, but I think we have moved from a position of decidedly negative activity in the market, where you generally saw falling stock prices," Mr. Caron said. "You've now turned the corner, where you're seeing more positive weeks than negative weeks."
AT&T; dropped 35 cents to $13.51 after Lehman Brothers cut the company's stock rating to "underweight" from "equal weight."
Home improvement retailer Lowe's declined $1.80 to $40.70 despite third-quarter earnings that beat expectations by 3 cents.
Gainers included UAL, which jumped 55 cents to $3.50 after it, the parent of United Airlines, said it expected to cut 9,000 more jobs as part of a restructuring to return to profitability.

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