- The Washington Times - Friday, May 23, 2003

NEW YORK (AP) — Wall Street went into the holiday weekend quietly, with stocks edging higher amid a lack of economic and earnings news.

Analysts, who said the market’s advance was limited by profit-taking, were encouraged to see stocks make any gains.

“This market has been pretty resilient,” said Michael Murphy, head trader of Wachovia Securities in Baltimore. “The feeling is the economy has finally bottomed out.”

The Dow Jones Industrial Average closed up 7.36, or 0.1 percent, at 8,601.38.

The broader market also inched higher. The Nasdaq Composite Index rose 2.54, or 0.2 percent, to 1,510.09. The Standard & Poor’s 500 index advanced 1.35, or 0.1 percent, to 933.22.

But the major gauges ended the week lower, breaking a three-week winning stretch. For the week, the Dow lost 0.9 percent, the Nasdaq shed 1.9 percent and the S&P; gave up 1.2 percent.

Trading was light yesterday as many traders were absent ahead of the long Memorial Day weekend. Profit-taking after weeks of rallies based on surprisingly strong first-quarter profits also held the market back.

“Investors are looking at markets that are basically, not fully, but very reasonably valued. We really need growing conviction of the second half [economic] recovery to withstand a long advance here,” said Jack Caffrey, equities strategist at J.P. Morgan Private Bank.

By the end of yesterday’s session, the Nasdaq was still up 18.8 percent from where it stood on March 11, when the market’s major indicators were at their lowest levels since hitting multiyear lows in October. The Dow had risen 14.3 percent from that point, while the S&P; had regained 16.5 percent.

Analysts said investors were digesting the $350 billion tax-cut bill Congress approved yesterday. The market rallied Thursday when President Bush said he would sign the compromise legislation, which is just under half the $726 billion package he wanted. The package includes accelerated income-tax cuts and reductions to the tax rates on stock dividends and capital gains.

“I think some people are going to be asking … how the proposed changes really will affect their portfolios,” Mr. Caffrey said. “It is a bit too early for investors to change their portfolios.”

Among yesterday’s gainers, Aeropostale advanced 69 cents to $20.27 after Fulcrum upgraded the clothing retailer to “buy” from “neutral.”

Walt Disney rose 12 cents to $18.24 on news it was considering selling its money-losing retail stores in North America and Europe.

But Freddie Mac fell $1.45 to $57.90 after JMP Securities lowered its rating on the mortgage company to “market perform” from “strong buy.”

Wynn Resorts declined 34 cents to $18.64 after Thomas Weisel downgraded the casino and resort operator to “peer perform” from “outperform.”


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