NEW YORK, (Reuters):
STOCKS ENDED a touch lower yesterday, a day after closing at fresh 2003 highs, as early optimism over solid earnings from technology bellwether Intel Corp. faded amid concerns that share prices already reflect strong quarterly results.
"We are getting to a point where good news is anticipated," said Angel Mata, managing director of listed equity trading at Legg Mason Wood Walker. "In order for something like Intel to have a significant effect on the market, it would have to be something that is so profound that there is no question that we are seeing an economic recovery."
Major market gauges opened higher after Intel reported that net income more than doubled, but stocks weakened later in the day. Investors have anticipated an improving economy and robust earnings for months now, and some are growing concerned that stock prices have run up too far, too fast.
The Nasdaq Composite Index ended down 4.09 points, or 0.21 percent, at 1,939.10, based on the latest available figures. The technology-stuffed index had reached a new 52-week peak of 1,966.87 in earlier trading.
The blue-chip Dow Jones industrial average eased 9.93 points, or 0.10 percent, to 9,803.05, after hitting a fresh 52-week high of 9,850.01 earlier in the day.
The broad Standard & Poor's 500 was down 2.72 points, or 0.26 percent, at 1,046.76, also off a new 52-week high of 1,053.79 reached earlier.
On Tuesday, all three major stock indexes ended at fresh closing highs for 2003, with the Dow at 9,812.98, the Nasdaq at 1,943.19 and the S&P 500 at 1,049.48.
Trading was active with about 1.5 billion shares changing hands on the New York Stock Exchange and almost 2 billion on Nasdaq. Decliners outpaced advancers by a ratio of 5 to 3 on the Big Board and about 3 to 2 on Nasdaq.
INTEL CLIMBS
Intel, the world's largest microchip maker, said its third quarter was among its strongest despite only early signs of a recovery in the hard-hit semiconductor sector.
Intel finished up 68 cents, or 2.2 percent, at $31.76 and ranked as the most actively traded stock on the Nasdaq. Its shares climbed as high as US$32.78 earlier in the session, hitting an 18-month high.
IBM's stock ended down 16 cents at US$92.74, erasing earlier gains.
After the regular session's close, IBM reported third-quarter earnings rose as growth in technology services helped offset losses in its microchip business. IBM's stock fell to US$90.01 in after-hours trading on Instinet electronic brokerage after its CEO said there are signs the economy has stabilized, but the technology sector has not yet rebounded.
A government report earlier in the day showed that shoppers took a break in September as U.S. retail sales dipped for the first time since April. But upward revisions to July and August sales mean third-quarter economic growth could be the strongest in several years, analysts said.
Economists closely watch retail sales because they make up a substantial portion of overall consumer spending, which accounts for about two-thirds of U.S. economic activity.
A separate report by the Federal Reserve Bank of New York on Wednesday showed manufacturing in that state on an upturn as well. The New York Fed's index rose to a record 33.7 in October from 18.35 in September.
