US stock prices decline on profit-taking

Investors collected profits on Wall Street today, ever aware of the uncertain economy and taking no chances after two days of sizable gains.

The market’s slippage was not surprising as buyers had been lured to stocks by bargain prices, not a renewed faith in an economic turnaround.

The Dow Jones industrial average closed down 21.04, or 0.2%, at 9,863.74. The Dow climbed 259.34 in the previous two sessions.

The broader market was also modestly lower. The Nasdaq composite index fell 12.44, or 0.7%, to 1,834.22, and the Standard & Poor’s 500 index declined 4.44, or 0.4%, to 1,107.50.

Today’s trading fitted into Wall Street’s pattern so far this year. Caution has dominated stock trading as companies reported lacklustre earnings and offered few positive predictions about the future. The major indexes are in negative territory for 2002, led by the Nasdaq, down 5.9%. The S&P has fallen 3.5%; the Dow, off 1.6%.

The December collapse of Enron, brought on by irregular accounting practices, has made investors more careful.

A congressional appearance today by former Enron chairman Kenneth Lay, who declined to answer questions before the Senate Commerce Committee, increased investors’ uneasiness. The Enron debacle has raised questions about the truthfulness of other companies’ books.

Investors sold Nortel, down 42 cents at dlrs 6.42, after chief financial officer Terry Hungle abruptly resigned on Monday, because of investments he made in the company’s retirement plan. Following Enron, investors have been more sceptical of how corporate executives profit from trading their companies’ stock.

Most of the market’s losses centred on the tech sector. Microsoft fell 99 cents to dlrs 60.14, and Intel stumbled 60 cents to dlrs 32.97.

There were some gainers, typically in safer, blue chip sectors. Procter & Gamble climbed dlrs 1.84 to dlrs 83.55, while Merck rose 77 cents to dlrs 60.22.

Declining issues narrowly outnumbered advancers by 15 to 14 on the New York Stock Exchange. Volume was light.

The Russell 2000 index, the barometer of smaller company stocks, inched up 0.69, or 0.2%, to 472.01.