Dec 13, 2002 3 min read

By Amy Baldwin AP Business Writer

NEW YORK (AP) – A bout of second-guessing left stocks mixed Thursday, as Wall Street questioned whether its autumn rally came too fast, too soon. Investors, once again cautious, largely dismissed reports of strong retail sales and positive outlooks from Amgen and other companies.

“Having already worked in two months of solid performance, the market looks a little tired here,” said Bryan Piskorowski, market commentator for Prudential Securities.

The Dow Jones industrial average closed down 51.22, or 0.6 percent, at 8,537.92, according to preliminary calculations.

The market’s broader gauges were narrowly mixed. The Nasdaq composite index rose 2.71, or 0.2 percent, to 1,399.30. The Standard & Poor’s 500 index declined 3.43, or 0.4 percent, to 901.53.

The Commerce Department reported that sales at the nation’s retailers rose 0.4 percent in November, the best reading in three months and inline with analysts’ expectations. But the news failed to trigger a burst of buying, perhaps because it wasn’t surprising as many retailers had already announced that late November sales were strong.

Analysts said the market’s lackluster performance Thursday didn’t mean that investors were ignoring improving fundamentals, such as sales and earnings, but that stocks simply were vulnerable to some profit taking after two months of rallies.

Some disappointing economic news contributed to Thursday’s air of caution. The Labor Department reported that new claims for unemployment benefits soared last week by a seasonally adjusted 83,000 to 441,000, the highest level since the week ending April 13.

Among Thursday’s decliners, Kimberly-Clark, which lowered its fourth quarter and 2003 earnings estimates, fell 73 cents to $46.05.

Bristol-Myers Squibb dropped $1.80 to $25.35 on a report in The Wall Street Journal saying the drug maker used accounting techniques to reach its financial targets in recent years.

Analysts said it was understandable that investors would cash in their gains and trade cautiously before the economic and earnings recoveries that they are hoping to see in 2003 actually materialize.

“Next year is likely to be a better year for the economy and for the market, but not necessarily a year where we can be sure that the bear market has been left behind,” said Alan Ackerman, executive vice president of Fahnestock & Co.

Upbeat outlooks produced some winners Thursday. Amgen climbed $3.18 to $50.45 after the biotech firm said it expects to exceed analysts’ 2003 earnings expectations because of strong product sales.

Ciena advanced $1.02 to $6.20 after the networker announced it expects revenue in the first quarter to increase by as much as 10 percent from the fourth quarter.

Advancing issues outnumbered decliners nearly 4 to 3 on the New York Stock Exchange. Trading volume was light.

The Russell 2000 index, the barometer of smaller company stocks, rose 1.48, or 0.4 percent, to 395.36.

Overseas, Japan’s Nikkei stock average finished Thursday off 0.2 percent. In Europe, France’s CAC-40 fell 1.7 percent, Britain’s FTSE 100 declined 1 percent, and Germany’s DAX index lost 2.6 percent.

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