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Markets
Stocks fall as investors gather profits

By Michael J. Martinez
The Associated Press

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The Dow Jones industrial average fell 43.63 to 10,694.07, a day after the Dow gained 123 points on Federal Reserve Chairman Alan Greenspan's upbeat economic report.

Microsoft, one of the 30 Dow stocks, fell 20 cents to close at $26.95 per share. Boeing, also a Dow stock, slipped 12 cents to $44.37.

Broader stock indicators were also lower. The Standard & Poor's 500 index was down 5.65 at 1,152.11, and the Nasdaq composite index slid 16.05 to 2,073.61.

Before trading opened, the Commerce Department reported a 0.3 percent dip in retail sales last month due to a sharp drop in auto sales — though without those sales, the retail figure would be up 0.9 percent for the month. Economists had been expecting a flat performance.

First-time unemployment claims for the first full week of this month were at 363,000, more than the 345,000 expected by Wall Street and 6,000 higher than the previous week.

"What we're seeing is a little profit-taking after what was a favorable response to the comments the Fed made," said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons. "Some of the stocks that moved aggressively Wednesday were very cyclical companies, and now you're seeing rotation back into more defensive positions."

Investors were continuing to weigh Comcast's hostile takeover bid for Walt Disney Co. Comcast was down $1.17 at $30.06, while Disney gained 40 cents to $28.00.

"Speaking broadly, more mergers can be a comforting indicator from an investor's perspective," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. "It shows that companies are comfortable with their own operations, their own management and their own finances."

Trading of ImClone Systems was halted on the Nasdaq Stock Market yesterday afternoon just before the Food and Drug Administration approved the company's colon-cancer drug, Erbitux.

The last ImClone trade before the halt was at $34.00, down $9.10, after the stock had been trading narrowly between $42 and $44 for most of the day.
 
The halt, issued due to the pending news, lasted through the close of trade. The stock reopened for after-hours trading at 4:20 p.m., and shares climbed to $44.91 in the extended session.

The FDA declined the original application for Erbitux in 2001, which prompted a stock-trading scandal that led company co-founder Sam Waksal to plead guilty and to federal charges against domestic entrepreneur Martha Stewart.

Gold/oil

In U.S. trading, gold gained $3.50 to $414.20 per ounce as precious metals continued to benefit from investors' perception that the Federal Reserve was in no rush to raise interest rates and saw little harm in the weak dollar.

Oil added 18 cents to $33.18 per barrel.

Material from Reuters is used in this report

Copyright © 2004 The Seattle Times Company