Dow Ends Down on Iraq Fears, Nasdaq Gains
 
 

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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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