- The Washington Times - Wednesday, February 25, 2004

NEW YORK (AP) — A small rally halted Wall Street’s five-day losing streak yesterday, but a lack of market-moving news and light volume meant there was little conviction behind the gains. Technology stocks, which bore the brunt of the market’s recent selling, regained the most ground.

Even with Federal Reserve Chairman Alan Greenspan reiterating his bullish economic outlook on Capitol Hill, many investors seemed to be holding back until next week’s job and payroll reports, which are expected to give a clearer picture of the economic recovery. Only bargain hunters and a small number of institutional buyers seemed to fuel the advance.

“It’s a very mild rally at this point,” said Brian Pears, head equity trader at Victory Capital Management. “Everybody understood that the market got ahead of itself, which is why we had the selling. But today, it’s more of an absence of selling rather than a lot of buying driving things.”

The Dow Jones Industrial Average rose 35.25, or 0.3 percent, to 10,601.62.

Broader stock indicators were also higher. The Standard & Poor’s 500 Index was up 4.58, or 0.4 percent, at 1,143.67, and the tech-dominated Nasdaq Composite Index gained 17.54, or 0.9 percent, to 2,022.98.

With the Dow still more than 100 points off its recent high of 10,714.88, set on Feb. 17, stocks aren’t expected to move much higher in the coming weeks, especially with earnings season over and no big economic news expected.

“We may have seen a little bounce from Greenspan, but not much,” said Stephen Sachs, director of trading for Rydex Investments. “February is historically one of the weakest months of the year, and the last week of the month is the weakest week. There’s not a lot driving things right now.”

Stocks managed the advance despite some disappointment over the National Association of Realtors’ report that existing-home sales fell 5.2 percent in January to 6.04 million from 6.37 million in December. Analysts had been expecting 6.25 million for the month.

There was better news about mortgages. According to the Mortgage Bankers Association of America, consumers are still responding to historically low interest rates. The association’s mortgage application index rose 2.1 percent for the week, while its refinancing index climbed 1.9 percent.

New mortgages and refinancing are considered barometers of economic growth, as consumers feel comfortable enough to take on more debt and, in the case of refinancing, have more money to put back into the economy.

“We’ve had good news, but that won’t necessarily translate into market gains anymore,” said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons. “It’s a double-edged sword, because at this point, the better the economy gets, the more likely we’ll start to see higher interest rates.”

Lucent Technologies Inc. and Cisco Systems Inc. revealed a new Internet-based method for handling mobile-phone calls, which could make mobile calls cheaper. Lucent gained 9 cents to $4.13 and Cisco climbed 53 cents to $23.58.

H&R; Block Inc. tumbled $4.09 to $54.41 after the tax and financial services company reported a 19 percent drop in quarterly profits because of lower mortgage-asset sales.

High-end retailer Tiffany & Co. posted a 24 percent rise in profits for the latest quarter and gave a bright outlook for 2004. Tiffany surged $2.36 to $39.48.

Yahoo Inc. lost 42 cents to $43.34 after Goldman Sachs released a bullish research report on the stock, reiterating its “outperform” rating.

The Russell 2000 Index of smaller companies gained 7.17, or 1.2 percent, to 579.04.

Advancing issues outnumbered decliners by more than 3 to 2 on the New York Stock Exchange, where consolidated volume came to 1.75 billion shares, compared with 1.98 billion Tuesday.

Overseas, Japan’s Nikkei stock average inched up 0.1 percent. In Europe, Britain’s FTSE 100 closed up 0.2 percent, France’s CAC-40 gained 0.5 percent for the session and Germany’s DAX index closed 0.1 percent higher.

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