- The Washington Times - Friday, January 30, 2004

NEW YORK (AP) — Wall Street ended January on a down note yesterday following disappointing gross domestic product figures. But stocks still eked out modest gains for the month, extending the market’s 2003 run.

The 4 percent annual growth rate in the fourth-quarter GDP report showed an expanding economy, but the number was lower than the 4.8 percent analysts expected. The figure was a slowdown from the third quarter’s 8.2 percent, but no one had expected that rate of growth to be sustained.

“I think the 4 percent GDP number is a terrific performance,” said Joseph Battipaglia, chief investment officer at Ryan Beck & Co. “There’s still a lot of upside to this market, but there’s a fair amount of short-term investment money that’s pulling momentum to the sell side.”

The Dow Jones Industrial Average fell 22.22, or 0.2 percent, to close at 10,488.07. It was the second straight week of losses for the Dow, which was down 80.22, or 0.8 percent, for the week.

Broader stock indicators also fell. The Standard & Poor’s 500 Index was down 2.98, or 0.3 percent, at 1,131.13, finishing the week 10.42, or 0.9 percent, lower and snapping a nine-week stretch of gains. The Nasdaq Composite Index was down 2.08, or 0.1 percent, at 2,066.15, losing 57.72, or 2.7 percent, on the week, its second straight decline.

January started with a surge in buying throughout the market amid high expectations for the latest round of earnings reports. But investor enthusiasm dropped when the Federal Reserve changed its stance this week, opening the door for a possible interest rate hike later this year. The resulting sell-off put a big dent in the month’s gains.

For the month, the Dow rose 34.15, or 0.3 percent; the Nasdaq rose 62.78, or 3.1 percent, and the S&P; climbed 19.21, or 1.7 percent.

The overall uptick in January — marked by weeks of buying followed by a sell-off this week — is good news to those who believe in the “January barometer.” The barometer holds that a January rise in the S&P; will make for a bullish year, and a lower S&P; for January means a bear market is at hand. Since 1950, the barometer has been wrong only five times, with three of those years blamed on world events such as the Vietnam War and the September 11 attacks.

“Whatever your read is on January, there’s still good news to be had on the economy, especially with the solid corporate earnings we’re seeing,” said Brian Bruce, director of global investments for PanAgora Asset Management Inc. “I think it will take a very solid economic report, or a series of positive reports, to assure people that things aren’t as bad as the selling seems to reflect.”

For the short term, the negative reaction to the GDP report pulled down shares that otherwise would be buoyed by positive earnings news. ChevronTexaco Corp. was down 96 cents to $86.35 despite reporting a 91 percent jump in fourth-quarter profits.

Wendy’s International Inc. was up 3 cents to $39.73 after reporting a 28 percent rise in profits, beating analysts’ expectations by 2 cents per share.

Struggling computer maker Gateway Inc. rose 63 cents to $4.72 after it met forecasts by posting an operating loss of 15 cents per share for the fourth quarter late Wednesday. The company also announced it would buy privately held eMachines Inc. for $235 million, creating the nation’s third-largest personal computer maker.

Telephone equipment maker Nortel Networks Corp. posted its first annual profit since 1997, sending shares $1.24 higher to $7.82. The stock was up 46 percent for the month.

General Motors Corp. dropped $1.03 to $49.68 after Goldman Sachs cut its rating on the stock.

The Walt Disney Co. fell 45 cents to $24.00 after a distribution deal between the entertainment giant and Pixar film studios, maker of the popular films “Toy Story” and “Finding Nemo,” was not renewed. Pixar, now free to find other distributors, was up $2.19 at $66.39.

Advancing issues barely outnumbered decliners on the New York Stock Exchange. Volume on the floor of the Big Board came to 1.64 billion shares as of 4 p.m., down from 1.93 billion in the previous session.

The Russell 2000 index of smaller companies was up 0.90, or 0.2 percent, at 580.76.

Overseas, Japan’s Nikkei stock average was flat. Britain’s FTSE 100 closed down 0.5 percent, France’s CAC-40 finished 0.7 percent lower and Germany’s DAX index closed down 0.9 percent.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide