- The Washington Times - Tuesday, November 11, 2003

NEW YORK (AP) — Wall Street extended its declines into a third day yesterday as investors opted to collect profits after mixed news from PeopleSoft Inc. and EchoStar Communications Corp.

Volume was light, with the bond market closed for Veterans Day. The stock market was open for a full session.

“Investors are looking to reposition their portfolios and lock in gains that they generated,” said Jack Caffrey, equity strategist with the J.P. Morgan Private Bank. “Given the losses most investors have from the prior years, you have some fuel to take those gains.”

“There’s also been some mixed news at the corporate level, although these will largely be seen as company issues rather than indicative of broader trends,” he said.

The Dow Jones Industrial Average closed down 18.74, or 0.2 percent, at 9,737.79 after a two-day loss of 100 points.

The broader market also declined. The Nasdaq Composite Index dropped 10.89, or 0.6 percent, to 1,930.75. The Standard & Poor’s 500 index slipped 0.54, or 0.1 percent, to 1,046.57.

Stocks have climbed since mid-March in anticipation of a strong economic recovery. But after eight months of gains, the market might not have momentum to move significantly higher in the absence of unexpectedly good economic data, analysts say.

This week, the federal government is set to release reports on weekly jobless claims and international trade tomorrow, and retail sales, the producer price index and industrial production on Friday.

“The investors I deal with are being thoughtful,” Mr. Caffrey said. “They are being comforted by the fact that the recovery people have been anticipating has been gaining some acceleration. … At the same time, they’re looking at valuations, which aren’t cheap anymore.

“That sets up for a period of consolidation from the gains we generated and volatility over the next several weeks,” he said.

Steven Goldman, chief market strategist at Weeden & Co. in Greenwich, Conn., agreed. He said much of the economic recovery has been already priced into the market, which could result in largely sideways trading until the second half of 2004.

“It’s not going to be straight up as it has been the past eight to nine months,” he said. “Investors should be more prudent as we turn to the second or third quarter of next year.”

PeopleSoft fell 43 cents to $21.62 after reports that software company Oracle Corp. might drop its $7.3 billion takeover bid for the company. Oracle slipped 3 cents to $12.54.

EchoStar dropped $4.75, or 12.9 percent, to $32.05 after the satellite broadcaster notched third-quarter profits that came in lower than analysts’ predictions.

Gainers included May Department Stores Co., which rose 18 cents to $29.58, after the retailer reported quarterly profits that beat Wall Street’s forecasts.

Declining issues outnumbered advancers about 8 to 5 on the New York Stock Exchange. Volume came to 1.16 billion shares, compared with 1.23 billion traded Monday.

The Russell 2000 index fell 4.64, or 0.9 percent, to 528.57.

Overseas, Japan’s Nikkei stock average finished 2.8 percent lower. In Europe, France’s CAC-40 fell 0.6 percent, Britain’s FTSE 100 edged up 0.1 percent and Germany’s DAX index declined 0.4 percent.

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