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By Bill Rigby
NEW YORK (Reuters) - Blue-chip stocks fell on Thursday as fierce fighting
and a spate of kidnappings in Iraq (news - web sites) pushed investors
to take a cautious stance and sell stocks before the three-day holiday
weekend.
Disappointment over Wal-Mart Stores Inc.'s (NYSE:WMT - news) profit
prospects forced the Dow lower, while technology stocks held onto slight
gains driven by a jump in earnings from Yahoo Inc. (NasdaqNM:YHOO -
news) and a bullish revenue forecast by Dell Inc. (NasdaqNM:DELL - news).
"We started on a very positive note, but with the holiday weekend,
there is a tendency to take a little money off the table," said
Peter Dunay, chief market strategist at brokerage Wall Street Access.
On the eve of the anniversary of Baghdad's capture, U.S.-led forces
were locked in open urban warfare in Iraq's central Sunni town of Falluja,
the Shi'ite shrine city of Kerbala and Abu Ghraib on the western outskirts
of the capital, witnesses said.
In addition, a number of South Koreans, Japanese and one Briton were
involved in separate kidnapping incidents.
"The more this escalates, the worse this will be," said Dunay.
"It is in the back of investors' minds."
Thin trading exaggerated the market's moves, with Wall Street modestly
staffed through the Passover and Easter holidays. U.S. financial markets
will be closed on Friday in observance of Good Friday.
After a seesaw session, the Dow Jones industrial average (^DJI - news)
ended down 38.12 points, or 0.36 percent, at 10,442.03. The Standard
& Poor's 500 Index (^SPX - news) closed down 1.21 points, or 0.11
percent, at 1,139.32, based on the latest available figures. The technology-focused
Nasdaq Composite Index (^IXIC - news) rose 2.64 points, or 0.13 percent,
to 2,052.88.
For the week, the Dow fell 0.3 percent, while the S&P 500 and Nasdaq
each shed about 0.2 percent. Each of the major indexes rose last week.
Trading was very light, with 1.2 billion shares changing hands on the
New York Stock Exchange (news - web sites), below the 1.4 billion daily
average for last year. About 1.7 billion shares were traded on Nasdaq,
below the 1.8 billion daily average last year.
Decliners outnumbered advancers by 5 to 3 on the NYSE and by about 8
to 7 on Nasdaq.
The relatively slow trading magnified movements during the session,
said Chris Wolfe, head of equities at J.P. Morgan's private bank.
"These downdrafts are institutions exiting positions in front of
the long weekend," he said.
Wal-Mart was the biggest drag on the Dow and the S&P 500 as the
world's biggest retailer dashed hopes it would raise its profit forecast
after some of its peers raised theirs. Its shares fell $1.29, or 2.2
percent, to $56.69.
General Electric Co.'s (NYSE:GE - news) stock spent much of the session
lower, but ended up 1 cent at $31.41 after it said quarterly earnings
rose slightly on higher orders for industrial products. But GE also
said investors will have to wait until 2005 for double-digit earnings
growth.
Technology stocks fared better.
Internet bellwether Yahoo surged $7.86, or 16 percent to $56.21 after
it reported a quarterly profit that more than doubled over last year,
easily beating Wall Street's forecasts.
No. 2 personal computer maker Dell Inc. (DELL.O) rose after boosting
its revenue forecast late on Wednesday, adding on Thursday that large
corporations are spending more on technology, reinforcing the view that
a broad rebound in demand is under way. Dell shares closed up 81 cents,
or 2.3 percent, at $35.63. (Additional reporting by Vivian Chu and Elizabeth
Lazarowitz)
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