- The Washington Times - Tuesday, September 30, 2003

NEW YORK (AP) — Disappointing reports on consumer confidence and business activity in the Midwest sent stocks back into a downward slide yesterday, leaving Wall Street with a loss for the month of September. But the market nonetheless ended a solid third quarter, with the Nasdaq Composite Index rising 10 percent for its fourth straight quarterly gain.

The Dow Jones Industrial Average and the Standard & Poor’s 500 Index each scored a second consecutive quarterly advance.

Still, yesterday was the fourth down day for the market out of the last five.

“Any negative news corporate or economic is just another excuse to take profits. … We have had a dramatic move up in almost every sector of the market,” said Brian Bush, director of equity research at Stephens Inc. in Little Rock, Ark.

The Dow closed yesterday down 105.18, or 1.1 percent, at 9,275.06. The loss more than erased Monday’s gain of 67.16.

The market’s other gauges were also sharply lower. The Nasdaq dropped 37.62, or 2.1 percent, to 1,786.94. The S&P; fell 10.61, or 1.1 percent, to 995.97.

Analysts said the market’s declines were owed in part to the end of the quarter. While institutional investors, including mutual fund managers, often buy stocks at the end of the quarter to dress up their portfolios, they also sell to lock in gains. Selling often occurs at the end of the third quarter in particular because mutual funds end their fiscal year at the end of October.

Yesterday’s economic news also contributed to the market’s losses.

The Conference Board reported that consumer confidence, which had rebounded in August, took a bigger than expected dive in September because of a sluggish job market. The group’s Consumer Confidence Index fell to 76.8, a five-point decrease from the revised 81.7 registered in August. The reading was also well below the 80.5 economists had predicted.

Soon after, the Purchasing Management Association of Chicago said its index of area business activity fell to 51.2 in September on a seasonally adjusted basis from 58.9 in August. Economists were expecting a much smaller decrease to 57.0. The Nasdaq claimed its fourth consecutive quarterly advance, a run not seen since the six-quarter run-up that ended March 31, 2001. The technology-dominated index ended the third quarter up 10.1 percent.

The Dow and S&P; achieved their second straight winning quarters — feats not seen since the fourth quarter of 2001 and first quarter of 2002 for the Dow and since the fourth quarter of 1999 and first quarter of 2000 for the S&P.; The Dow’ quarterly gain totaled 3.2 percent, while the S&P;’s came to 2.2 percent.

But the market ended down during September, historically one of the weakest months for stocks. For the Nasdaq, it was the end of a seven-month streak, while for the Dow and S&P; it marked the end of a six-month rally. The Nasdaq lost 1.3 percent in September; the Dow, 1.5 percent, and the S&P;, 1.2 percent.

Tech stocks were among yesterday’s losers, having risen the most during the market’s six-month rally. Microsoft Corp. fell $1.03 to $27.80.

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