Investors pause after profitable week

AP Business WriterNEW YORK (AP) -- Wall Street meandered Monday, making mostly modest and mixed moves amid profit-taking from last week's big rally and in the absence of any news to influence trading.

The market's few gains came late in the session, but analysts were still encouraged. They said that while investors are cautious, they are confident enough that they aren't cashing out their positions for fear the market's advance will falter.

The Dow Jones industrial average closed up 38.75, or 0.4 percent, to 10,611.24, according to preliminary calculations, after spending much of the day at a loss.

Broader market indicators were also weak. The Standard & Poor's 500 index advanced 3.95, or 0.3 percent, at 1,168.26, while the Nasdaq composite index slipped 0.18, virtually unchanged, at 1,929.49.

"This is good. I'd feel very uncomfortable if we were seeing 1.5 percent or 2 percent up days every day because that would mean we're getting euphoric again," said Rafael Tamargo, director of equity research at Wilmington Trust. "Grinding it out like this is kind of what we need to see. It shows that investors still have questions and are acting carefully."

Stocks enjoyed a big rally last week -- including a 7 percent surge on the Nasdaq and a 2 percent gain on the Dow -- after Federal Reserve Chairman Alan Greenspan said recovery from the recession "is already well under way" and several economic reports supported his assessment.

Still, the market's recent strength has made some investors uneasy. After two years of unsustainable rallies and tumbling stock prices, there are concerns that some issues have become too expensive given the modest projections for the future. They want to hear more companies report improving results before committing too much to stocks.

First-quarter earnings reports due out next month could provide some of those answers. Wall Street also wants companies to say their business is improving and that results due out later this year will be better.

"The mood is improving. But people have found you after to be prudent," said Jack Francis, managing director at UBS Warburg. "They don't want stock prices to go too high until they're sure that there's something underneath to support them."

There wasn't much news Monday, but investors still found reason to buy financial stocks -- one of the sectors that has gotten the biggest boost in recent days. J.P. Morgan rose $1.56 to $36.30.

Earnings were also in focus. Retailer Williams-Sonoma dropped $2.64 to $46.40 after the upscale kitchen-goods chain missed its fourth-quarter earnings target and said first-quarter earnings would not be as strong as analysts expected.

Tech stocks were also mixed.

Qwest Communications International fell 25 cents to $9.46 after the company said the Securities and Exchange Commission had opened an informal inquiry into its accounting practices.

But Ciena climbed $1.02, or 11 percent, to $10.29.

Monday also marked the six-month anniversary of the Sept. 11 terrorist attacks that shuttered Wall Street for nearly a week and sent stocks falling sharply when the markets reopened. The Dow has climbed 28.9 percent since its post-attack lows, the Nasdaq is up 35.6 percent and the S&P has advanced nearly 21.0 percent.

Advancing issues narrowly led decliners on the New York Stock Exchange. Volume came to 932.82 million shares, compared with 1.11 billion shares Friday.

The Russell 2000 index advanced 0.90 to 500.75.

Overseas, Japan's Nikkei stock average closed up 0.3 percent. In Europe, Germany's DAX index fell 0.4 percent, Britain's FT-SE 100 lost 0.5 percent, and France's CAC-40 slipped 0.9 percent.

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