- The Washington Times - Tuesday, April 22, 2003

NEW YORK (AP) Wall Street dipped lower yesterday as investors played it safe and cashed in some gains from last week's rally despite encouraging earnings from 3M and Merck.
Analysts said many traders were watching and waiting in advance of a rush of earnings news due out this week. Volume also was light after the long weekend. U.S. markets were closed Friday for the Easter holidays, and many traders took yesterday off as well.
"We had a nice rally last week, so now we're seeing a little bit of profit-taking," said Todd Leone, managing director of equity trading at SG Cowen Securities.
"It's more of a market not going in a straight line up anymore. Investors are trying to figure out which way to go."
The Dow Jones Industrial Average closed down 8.75, or 0.1 percent, at 8,328.90, having gained 1.6 percent last week.
Earlier in the day, the blue chips rose as much as 60 points.
The broader market also fell slightly. The Nasdaq Composite Index dropped 1.13, or 0.1 percent, to 1,424.37, after a weekly advance of 4.9 percent. The Standard & Poor's 500 index lost 1.57, or 0.2 percent, to 892.01, after climbing 2.9 percent.
With the war largely over, investors are turning their attention to the strength of corporate profits. While first-quarter earnings have generally been better than expected, the market remains concerned about the economic outlook.
Charles White, vice chairman and portfolio strategist at Avatar Associates, said some investors were avoiding making major purchases until key reports Friday on the nation's gross domestic product and consumer confidence.
"Investors are looking for some indication that sustainable economic growth is coming," he said. "Earnings are OK, but most of the guidance [on future quarters] offers no visibility. … And there's nothing really meaningful coming out on the economy until the end of the week."
Meanwhile, a report yesterday forecasting a drop in economic activity pressured the market. The New York-based Conference Board said its Index of Leading Economic Indicators fell by 0.2 percent last month, to 110.6.
The result was in line with analysts' expectations.
Dow component 3M fell 15 cents to $129.83 after the diversified manufacturer reported first-quarter earnings that beat Wall Street's estimates. It also reaffirmed its outlook for the year.
Southwest Airlines fell 36 cents to $15.16 despite reporting first-quarter earnings that met Wall Street expectations.
And AMR slid $1.15, or 23 percent, to $3.85 after flight attendants at its American Airlines unit said they want a new vote on a package of concessions in light of the carrier's plans, now dropped, to guarantee executives large bonuses. The move renewed fears of a bankruptcy filing.
Gainers included Dow component Merck, which rose $1.07 to $56.96, after the pharmaceutical company posted quarterly profits that were in line with analysts' expectations.
Whirlpool rose $1.05 to $54.73 after the appliance maker notched a first-quarter profit but also lowered its 2003 outlook, citing the uncertain economy.
Advancing issues outnumbered decliners 5 to 4 on the New York Stock Exchange. Volume came to 1.11 billion shares, compared with 1.38 billion traded Thursday.
Overseas, Japan's Nikkei stock average finished 1.2 percent higher yesterday. The European markets remained closed for the Easter holidays.

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