Stocks trade lower, investors take profits from recent gains
By Amy Baldwin AP Business Writer
NEW YORK (AP) – Investors sold stocks for a second straight day Monday, collecting profits in the absence of major economic and earnings news. Brokerage house downgrades accounted for most of the market’s more notable activity in an otherwise mundane session.
Trading was light and lackluster, with analysts predicting a quiet week as many traders and investors wrap up their summer vacations.
“Volume is so low here that you don’t want to read too much into it,” said Peter Dunay, market strategist at Wall Street Access, a New York-based brokerage firm.
The Dow Jones industrial average closed down 31.23, or 0.6 percent, at 9,317.64, according to preliminary calculations. The Dow was pulled down in part by brokerage house downgrades of components Caterpillar and Alcoa.
Despite losing 74.81 on Friday, the Dow had a weekly gain of 0.3 percent. Last week, the blue chips also hit a high close not seen in 14 months.
The Nasdaq composite index fell 1.01, or 0.1 percent, to 1,764.31, following a win of 3.7 percent. Last week, the Nasdaq closed at levels not achieved in 16 months.
But the Standard & Poor’s 500 index eked out a gain of 0.65, or 0.1 percent, in the final minutes of the session, closing at 993.71.
Analysts have been quick to point out that the market’s selloffs have been minor when compared with the strides it has made. So far this year, the Nasdaq is up 32.1 percent, while the Dow is up 11.7 percent and the S&P is up nearly 12.9 percent.
The market’s strength comes from increasingly positive earnings and economic data, a relief to investors after three years of heavy losses on Wall Street.
“The market has done very well year to date. I don’t think there is anything I can really point to that would specifically cause the market to drop,” said Matt Brown, head of equity management at Wilmington Trust. “I can only attribute it to a summertime slowdown and that the market has done quite well.”
Analysts said Monday’s declines did not indicate investors are less optimistic about the economy. Rather, the market was expected to pull back following its latest gains.
Caterpillar dropped $2.03 to $69.66 after Legg Mason lowered its rating to “hold from “buy.”
Alcoa fell 34 cents to $27.79 after Prudential Securities downgraded it to “hold” from “buy.”
Wal-Mart advanced 65 cents to $59.05 after raising its August same-store sales estimate. The discount retailer now sees sales at stores open at least one year rising this month between 4 percent and 6 percent compared with last August. Wal-Mart’s previous estimate called for same-store sales, the best gauge of a retailer’s health, to increase between 3 percent and 5 percent.
Advanced Micro Devices rose 18 cents to $10.09 after Soundview Technology raised its rating on the chipmaker to “outperform” from “neutral.”
Declining issues outnumbered advancers about 8 to 5 on the New York Stock Exchange. Trading volume was very light.
The Russell 2000 index, which tracks of smaller company stocks, fell 1.64, or 0.3 percent, to 483.87.
Overseas, Japan’s Nikkei stock average finished Monday off 0.04 percent. In Europe, France’s CAC-40 forfeited 1.1 percent and Germany’s DAX index lost 1.4 percent. Britain’s market was closed for a holiday.
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AP-ES-08-25-03 1612EDT