- The Washington Times - Tuesday, May 6, 2003

   NEW YORK (AP) — The stock market stalled yesterday, held back by a reported investigation of Boeing and profit-taking from Wall Street’s recent rally. Shares closed mixed in lackluster trading.
   Analysts said investors played it safe after several weeks of strong earnings and in advance of the Federal Reserve’s meeting today on interest rates.
   “We’re in between major events,” said Steve Kolano, an equity trader at Boston Co. Asset Management. “We had a really good rally on Friday behind strong volume. Right now, we’re stuck in a range because there’s not a lot of evidence yet to take the market higher.”
   The Dow Jones Industrial Average closed down 51.11, or 0.6 percent, at 8,531.57, having gained 3.3 percent last week to hit its highest level since January.
   The broader market finished narrowly mixed. The Nasdaq Composite Index rose 1.16, or 0.1 percent, to 1,504.04, after a weekly advance of 4.8 percent to its best close in 10 months. The Standard & Poor’s 500 index fell 3.53, or 0.4 percent, to 926.55, having risen 3.5 percent.
   Boeing dropped $1 to $27.62 after the Wall Street Journal reported the Justice Department is investigating whether the defense contractor improperly used a competitor’s documents to win a military contract.
   Stocks have surged in recent weeks on investor optimism after better-than-expected first-quarter earnings. But analysts say that trading is likely to be choppy in the near future unless there is more solid evidence of an economic recovery.
   “It’s a mixed bag on short-term economic news,” said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. “The market has been moving really well in the face of negative news. But there’s a feeling that at some point it will need fundamentals to support it.”
   A better-than-expected report on the U.S. services sector, meanwhile, temporarily lifted the Dow into positive territory early yesterday, but the blue chips soon lost momentum.
   The Institute for Supply Management reported that its non-manufacturing index came in at 50.7 in April, up from 47.9 in March, according to Dow Jones Newswires. A reading above 50 indicates growth in the sector. Analysts were expecting a reading of 49.0.
   Analysts said investors also were avoiding major bets before today’s Fed meeting. Fed policy-makers are expected to leave interest rates unchanged, but investors are eager to see their accompanying comments on the state of the economy.
   In addition, an earnings report from Cisco Systems set to be released after the close of markets today will provide an indication of whether the technology sector is set to boost capital spending in the second half of the year, Mr. Kolano said.
   “There’s a mixed feeling about where the economy is headed. So investors are in a wait-and-see mode,” he said.
   Gainers included Oxford Health Plans, which climbed $3.55, or 11.7 percent, to $33.90, after the health insurer said first-quarter profit rose despite charges from a legal settlement.
   Several big technology stocks also rose, including Juniper Networks, which increased 80 cents to $11.95, and Lucent Technologies, which gained 19 cents to $2.04.
   Advancing issues outnumbered decliners 5 to 4 on the New York Stock Exchange. Volume was moderate at 1.42 billion shares, compared with 1.54 billion traded Friday.
   The Russell 2000 index, a barometer of smaller company stocks, rose 2.13, or 0.5 percent, to 409.80.
   In Europe, France’s CAC-40 climbed 1.1 percent, and Germany’s DAX index rose 0.9 percent. Britain’s markets were closed for a bank holiday, and Japan’s exchange was closed for Children’s Day.

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