- The Washington Times - Friday, December 26, 2003

NEW YORK (AP) — Stocks finished higher on Wall Street yesterday as investors picked up bargains in an abbreviated post-Christmas session. The Dow Jones Industrial Average and the Standard & Poor’s 500 Index advanced for a fifth straight week.

Despite the overall market gains, stocks of companies that process or sell meat took a further beating on news of the nation’s first case of mad cow disease.

At the close of regular trading, the Dow was up 19.48, or 0.2 percent, at 10,324.67. It was up 0.5 percent for the week.

Broader stock indicators also rose yesterday. The Standard & Poor’s 500 Index advanced 1.85, or 0.2 percent, to 1,095.89 for a gain of 0.7 percent for the week. The Nasdaq Composite Index was up 3.91, or 0.2 percent, at 1,973.14 and was up 1.1 percent for the week.

Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee, Wis., said the advance appeared to be the continuation of a “Santa Claus rally” that boosted stocks in recent days.

“Wednesday’s news about mad cow [disease] had kind of taken the wind out of the sails,” he said, noting that most of the selling Wednesday was in companies that process or sell beef and beef products. “The market today is bouncing back from that, though volume is really light so you don’t want to read a lot into it.”

Investors responded to reports from retailers that Christmas sales were up modestly.

Wal-Mart Stores Inc. rose 8 cents to $52.52 after the world’s largest retailer said last-minute holiday sales were good, although not good enough to lift same-store sales growth above the low end of its projected 3-percent to 5-percent range. Same-store sales reflect business at stores open at least a year and are considered the best yardstick of a retailer’s strength.

Sharper Image Corp. rose $2.42 to $32.39 after the San Francisco-based specialty retailer raised its fourth-quarter earnings estimates. Amazon.com Inc., the online seller, reported its best holiday season ever, and its shares advanced 15 cents to $53.47.

Confirmation that a Holstein cow in Washington state had the deadly mad cow disease continued to depress the stocks of companies in the meat industry, which suffered widespread losses on Wednesday. But restaurant shares staged a bit of a recovery.

Jack Caffrey, vice president and an equity strategist for J.P. Morgan Private Bank, said investors were making a distinction between processors, which may face higher testing and distribution costs for beef in the near-term, and restaurants, which typically have diversified menus.

“You can go to Wendy’s for the chicken, the salad and other things, too,” Mr. Caffrey said.

He said he expected “more differentiation of results” going forward. While processors may be the first to face higher costs in dealing with mad cow fallout, those costs eventually could be passed on and affect the profits of restaurants and food retailers.

Tyson Foods fell 31 cents to $12.59 after Morgan Stanley cut its investment rating to “equal weight” from “overweight” and cut its profits outlook. ConAgra Foods Inc. dropped 12 cents to $26.01, while Smithfield Foods was down 24 cents at $21.91.

McDonald’s Corp., a Dow index component hard-hit in Wednesday’s selling, opened down but later rose, gaining 13 cents on the day and closing at $24.09. Wendy’s International rose 20 cents to $37.99.

Companies that specialize in meat purification processes gained. Bio-Rad Laboratories Inc. of Hercules, Calif., which sells diagnostic instruments, was up $2.33, or nearly 4 percent, to $62.15. Bio-Rad is the market-leading provider of tests for mad cow disease worldwide.

Shares in Biopure Corp. of Cambridge, Mass., fell 39 cents to $2.43 after the developer of an artificial blood product said it expected civil charges against it by the Securities and Exchange Commission over disclosure of its communications with drug regulators.

The Russell 2000 Index of smaller companies advanced 2.55 to 554.90.

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