Stocks were moderately lower today, as investors hopeful about a year-end rally battled a temptation to cash in profits from nearly seven weeks of blue-chip gains.
At 1 p.m., the Dow Jones industrial average was down 7.68 at 8,837.47. On Thursday, blue chips closed at 8,845.15 following a two-day surge of 370 points, the highest close since August.
The broader market was also lower. The Nasdaq composite index fell 5.36 to 1,462.19, after closing Thursday at a level not seen since July. The Standard & Poor's 500 index declined 1.31 to 932.45.
For the week, the Dow has climbed 3.2 percent and is headed toward a seventh-straight weekly advance, its longest such streak since 1998. The S&P 500 has risen 2.4 percent and the Nasdaq 3.5 percent. Both are headed toward a sixth gain in seven weeks.
Analysts said investors have been optimistic after nearly seven straight weeks of Dow gains and are looking to buy since the end of the year traditionally has been the strongest time for stocks.
But they caution that Wall Street remains vulnerable to declines due to profit-taking as well as concerns about terrorism and a war with Iraq.
Salomon Smith Barney advised investors to sell software makers PeopleSoft Inc. and Siebel Systems, while Brocade Communications Systems said sales and earnings will miss analysts' estimates.
"We're convinced there will be a recovery but we're not convinced on the timing," said James Gribbell, who runs the $200 million Babson Growth Fund. "Anybody who's buying stocks right now has to be convinced there will be a recovery in early 2003."
Siebel fell 30 cents to $8.37, and PeopleSoft lost $1.16 to $19.87. Salomon Smith Barney analyst Heather Bellini cut the companies to "underperform" from "inline." She said in a note to clients that investors likely will be disappointed by flat to lower revenue expectations for software makers next year.
Brocade Communications slid $1.79, or 24.6 percent, to $5.49 after the data storage networking company warned of lower-than-expected first-quarter revenue.
QLogic, another manufacturer of switches for data-storage systems, fell $1.57 to $42.93. McData Corp., which also competes with Brocade, shed 56 cents to $8.29.
Cisco Systems, the biggest maker of computer-networking equipment, slid 38 cents to $14.86.
Nvidia declined 52 cents to $15.62. UBS Warburg analyst Alex Gauna lowered the maker of computer graphics chips to "reduce" from "hold," citing potential market share losses and sliding pricing power.
Research In Motion Ltd. slid $1.56 to $13.59. The maker of BlackBerry pagers must pay $23.1 million for using NTP Inc.'s technology without permission, a U.S. jury decided. Closely held NTP said it may ask the judge to order Research In Motion to stop selling BlackBerry pagers in the U.S. Research In Motion said it would appeal.
ConocoPhillips dropped $1.99 to $47.95. The company said it will produce less oil and natural gas next year and has targeted asset sales of as much as $4 billion as the third-largest U.S. oil company seeks to trim debt and improve returns.
Exxon Mobil, the biggest publicly traded oil company, declined 59 cents to $34.27.
Myriad Genetics declined $1.56 to $19.83. The biopharmaceutical company said it will sell 3 million shares to raise $57.3 million. The transaction will dilute the value of the company's 23.9 million previously outstanding shares by 13 percent.
Alltel Corp. dropped 91 cents to $52.75. Morgan Stanley analyst Simon Flannery downgraded the provider of wireless, local- and long-distance phone service in 26 U.S. states to "equal- weight" from "overweight."
ADC Telecommunications shed 28 cents to $2.16. The maker of equipment that boosts the capacity of telephone and cable networks said it expects to be dropped from the Nasdaq-100 Index at the end of the year, based on its falling market value.
Gainers included Tivo, which rose 43 cents to $6.67, after the digital video recording company reported a narrower-than-expected loss in the third quarter.
Safeway rose 83 cents to $22.87, and Kroger advanced 40 cents to $15.90.
Krispy Kreme Doughnuts climbed $1.36 to $38.31. The operator of doughnut shops in the U.S. and Canada earned 17 cents a share in the third quarter, 1 cent more than analysts' forecast, and raised its full fiscal year profit forecast by a penny to 65 cents a share.