Sun, May 25, 2003 - Page 10 News List

Wall Street finishes on a high note prior to US' Memorial Day weekend


Wall Street went into the holiday weekend quietly, with stocks edging higher amid a lack of economic and earnings news.

Analysts, who said the market's advance was limited by profit-taking, were encouraged to see stocks make any gains.

"This market has been pretty resilient," said Michael Murphy, head trader of Wachovia Securities in Baltimore. "The feeling is the economy has finally bottomed out."

The Dow Jones Industrial Average closed up 7.36, or 0.1 percent, at 8,601.38.

The broader market was also slightly higher. The Nasdaq composite index rose 2.54, or 0.2 percent, to 1,510.09. The Standard & Poor's 500 index advanced 1.35, or 0.1 percent, to 933.22.

But the major gauges ended the week lower, breaking a three-week winning stretch. For the week, the Dow lost 0.9 percent, the Nasdaq shed 1.9 percent and the S&P gave up 1.2 percent.

Trading was light Friday as many traders were absent ahead of the long Memorial Day weekend. The markets will be closed tomorrow for the holiday.

"Investors are looking at markets that are basically, not fully, but very reasonably valued. We really need growing conviction of the second half [economic] recovery to withstand a long advance here," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank.

By the end of Friday's session, the NASDAQ was up 18.8 percent from where it stood on March 11, when the market's major indicators were at their lowest levels since hitting multi-year lows in October.

The Dow had risen 14.3 percent from that point, while the S&P had regained 16.5 percent.

Analysts said investors were also digesting the US$350 billion tax cut bill the US Congress approved Friday.

The market rallied Thursday when US President George W. Bush said he would sign the compromise legislation, which is just under half the US$726 billion package he wanted.

The package includes accelerated income tax cuts and reductions to the tax rates on stock dividends and capital gains.

"I think some people are going to be asking ... how the proposed changes really will affect their portfolios," Caffrey said. "It is a bit too early for investors to change their portfolios."

Among Friday's gainers, Aeropostale advanced US$0.69 to $20.27 after Fulcrum upgraded the clothing retailer to "buy" from "neutral."

Walt Disney rose US$0.12 cents to US$18.24 on news that it was considering selling its money-losing chain of retail stores in North America and Europe.

But Freddie Mac fell US$1.45 to US$57.90 after JMP Securities lowered its rating on the mortgage company to "market perform" from "strong buy."

Wynn Resorts declined US$0.34 to US$18.64 after Thomas Weisel downgraded the casino and resort operator to "peer perform" from "outperform."

Advancing issues outnumbered decliners slightly more than 2 to 1 on the New York Stock Exchange. Volume was an extremely light 1.20 billion shares, below Thursday's already thin 1.45 billion.

The Russell 2000 index, the barometer of smaller company stocks, rose 3.31, or 0.8 percent, to 418.40.

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