- The Washington Times - Friday, April 8, 2005

NEW YORK (AP) — Investors locked in profits after a week of gains yesterday, sending stocks lower even as oil prices fell for a fifth straight day and two big cable operators reportedly agreed to bid for bankrupt Adelphia Communications Corp.

Wall Street welcomed news that Time Warner Inc. and Comcast Corp. teamed up in an $18 billion bid for Adelphia, in which a combined Time Warner/Adelphia cable company would be spun off into a public company. A private equity firm also announced a $1 billion offer for retailer ShopKo Stores Inc., further bolstering enthusiasm over the year’s healthy merger activity.

But even as crude prices continued their decline, investors shifted their holdings and took profits ahead of first-quarter earnings announcements, which begin in earnest next week, and economic reports that could shed light on inflation.

“Why wouldn’t you take the money off the table, especially after seeing the market go down as low as it did last month?” said Brian Williamson, an equity trader at the Boston Company Asset Management. “I think some people are taking some profits, but volume is very low, and it’s very quiet, so any move we have here today you have to take with a grain of salt.?

The Dow Jones Industrial Average fell 84.98, or 0.81 percent, to 10,461.34.

Broader stock indicators also lost ground. The Standard & Poor’s 500 Index was down 9.94, or 0.83 percent, at 1,181.20, and the Nasdaq Composite Index lost 19.44, or 0.96 percent, to 1,999.35.

Despite yesterday’s losses, all three indexes finished the week higher for the first time since March 4, buoyed by the largest weekly decline in oil prices since December. For the week, the Dow rose 0.55 percent, the S&P; 500 climbed 0.71 percent, and the Nasdaq gained 0.73 percent.

Crude oil futures dropped for a fifth straight day yesterday, though investors seemed skeptical that oil futures may, at least in the short term, have hit a ceiling. A barrel of light crude settled at $53.32, down 79 cents, on the New York Mercantile Exchange.

Bonds traded in a narrow range, with the yield on the 10-year Treasury note falling slightly to 4.48 percent from 4.49 percent late Thursday. The dollar fell against most major currencies after remaining higher most of the session, and gold prices fell as well.

Despite soaring energy prices and the stock market’s downturn in March, consumer confidence remained steady for the past month, according to the latest AP-Ipsos consumer confidence index. The index rose narrowly to 84.5 in April, compared to March’s reading of 84.2.

According to newspaper reports, Time Warner and Comcast are offering $12 billion to $13.5 billion in cash for Adelphia, along with stock valued between $4.5 billion and $5.6 billion. Comcast would swap its 21 percent stake in Time Warner for 2 million Adelphia subscribers. Time Warner could then combine the rest of Adelphia with its cable unit for a public offering. Time Warner was up 9 cents at $17.97 on the news, while Comcast lost 21 cents to $33.07.

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