- The Washington Times - Monday, March 20, 2006

NEW YORK (AP) — Wall Street’s four-day rally paused yesterday, with the major indexes finishing mixed as optimism over a potential end to the Federal Reserve’s string of interest rates clashed with investors’ desire to take profits after the run higher.

With slowing economic growth and little evidence of inflation, the market is getting more optimistic that the Fed, which meets next Tuesday, would stop raising rates by May. Investors looked ahead to Fed Chairman Ben Bernanke’s speech last night to the Economic Club of New York for further evidence of a halt to rate increases.

However, with stocks up for four straight sessions last week and the Dow Jones industrials and Standard & Poor’s 500 Index at highs not seen since May 2001, confidence in the market’s ability to keep advancing could be faltering. And the impetus to lock in profits ahead of the Fed meeting could prove tempting for cautious investors.

“There’s really not a lot of information here to work with, and I think the market’s taking a rest,” said Jack Ablin, chief investment officer at Harris Private Bank. “We’re still a few weeks away from first-quarter earnings, so all you have to focus on is a slowing economy and interest rates.”

The Dow Jones Industrial Average fell 5.12, or 0.05 percent, to 11,274.53.

Broader stock indicators were narrowly mixed. The S&P; lost 2.17, or 0.17 percent, to 1,305.08, and the Nasdaq Composite Index rose 7.63, or 0.33 percent, to 2,314.11.

Bonds were higher, with the yield on the benchmark 10-year Treasury note falling to 4.66 percent from 4.67 percent late Friday. The dollar rose against most major currencies, while gold prices also moved higher.

Oil prices tumbled, helping to mitigate the stock market’s losses. A barrel of light crude settled at $60.42, down $2.32, on the New York Mercantile Exchange.

The Conference Board’s index of leading economic indicators slipped last month, falling 0.2 percent after January’s 0.5 percent rise. The January figure was revised from 1 percent as well — a signal that the economy could be slowing down. While a slowing economy bodes well for fewer rate increases, it also shows that economic growth has already begun to slow, which could affect future corporate earnings.

Analysts noted that the market’s mixed day could be a sign of the market’s long-term health, since the indexes were not barreling higher unchecked, and profit-taking after last week’s gains was light.

In company news, Wal-Mart Stores Inc. gained $1.07 to $47.76 after press reports of the retailer’s ambitious plan to add 150,000 new employees in China over the next five years in a push to grab market share in that country’s rapidly expanding economy.

Fellow Dow industrial General Motors Corp. sold off again as press reports said the company’s board of directors was demanding answers from top executives after Friday’s disclosure of a $2 billion earnings restatement. GM lost 28 cents to $20.85.

Williams-Sonoma Inc. fell 18 cents to $42.28 after the home and kitchen retailer saw profits rise 6 percent for the fourth quarter, on par with Wall Street’s expectations. The owner of the Pottery Barn and West Elm brands also initiated its first quarterly dividend.

Oracle Corp. added 12 cents to $13.72 ahead of its quarterly results, expected after the session. The software maker earned 19 cents per share for the quarter, a penny better than Wall Street’s forecasts.


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