US stocks dip

Investors retreated modestly on Wall Street today, collecting profits after a six-day advance in the Dow Jones industrials.

Analysts believed the dip was not surprising, especially after the Dow’s 116-point advance on Monday.

The market also lacked the kind of galvanising news that sent stocks surging in the previous session – encouraging economic data and solid news from retailers about Thanksgiving weekend sales.

“After a run-up like we saw Monday, it’s normal for people to say, ’I don’t want to pay those prices, I’m going to pull back’,” said Barry Berman, head trader for Robert Baird & Co in Milwaukee.

On Wall Street, the Dow closed down 45.41, or 0.5%, at 9,853.64. Over the previous six trading days, the blue chips gained 279.63.

The broader market gauges also closed lower. The Nasdaq composite index ended the day down 9.75, or 0.5%, at 1,980.07. The Standard & Poor’s 500 index lost 3.50, or 0.3%, to close at 1,066.62 .

The market rallied on Monday after the Institute for Supply Management reported better-than-expected growth in the US manufacturing sector and retailers said they had a successful first weekend of the holiday shopping season. Many analysts were optimistic the gains would hold despite today’s dip, and they noted that the end of the year is traditionally a time of strength for Wall Street.

“I don’t think investors are comfortable being on the sidelines at this point,” said Richard Cripps, chief market strategist for Legg Mason of Baltimore. “For those people who were saying the market was due for a correction ... this is a real decision time.”

Some investors remain sceptical about the strength of the recovery, and may be inclined to closely guard their gains.

Viacom gained 7 cents to close at 39.64 following news it was nearing a decision to sell its majority interest in video rental company Blockbuster. UBS rated Viacom at a “buy” after The Wall Street Journal reported the company was poised to unload the unit. The video store chain lost 29 cents to close at 16.94.

AT&T ended the day down 8 cents at 20.27 after Betsy Bernard stepped down as president to pursue other opportunities. The company named William Hannigan, chairman and chief executive of Sabre Holdings, to succeed her.

PepsiCo declined 57 cents to 48.14 after announcing it would cut 750 jobs and close a Frito-Lay plant in Kentucky as part of a plan to streamline its operations. The soft drink and snack food company reaffirmed its outlook through the end of the year and forecast double-digit growth in earnings per share for 2004.

Vivendi Universal SA closed down 21 cents at 23.11 after the French media and telecommunications company reported third-quarter profits that beat expectations, but warned its end-of-year performance would not be as strong.

Texas Instruments lost 7 cents to close at 30.11 after selling its remaining stake in Micron Technology. Gains related to the sale were expected to raise the Dallas-based chipmaker’s fourth-quarter net income by 125 million. Micron declined 29 cents to end the day at 12.76.

Advancers slightly outnumbered decliners on the New York Stock Exchange. Volume was light, with 1.38 billion shares, compared with 1.35 billion shares traded on Monday.

The Russell 2000 index, which tracks smaller company stocks, closed down 0.99, or 0.2%, at 553.60.