Las Vegas Sun

December 3, 2009

Currently: 49° | Complete forecast | Log in

Three-year bear market ends with stocks up after ‘03 recovery

Wednesday, Dec. 31, 2003 | 11:36 a.m.

SUN WIRE REPORTS

NEW YORK -- Wall Street pulled back modestly today as investors opted to cash in some gains after a remarkable stock recovery in 2003 that ended a grueling three-year bear market.

In morning trading, the Dow Jones industrial average edged up 3.70, or 0.04 percent, at 10,428.74, having declined nearly 25 points in the previous session. On Monday, the blue chip average reached its highest level since March 2002.

But the broader market was lower. The Nasdaq composite index declined 7.24, or 0.4 percent, to 2,002.64. The Standard & Poor's 500 index fell 0.47, or 0.04 percent, to 1,109.17.

The Labor Department reported today that new jobless claims fell last week by a seasonally adjusted 15,000 to 339,000. It was the third straight week of declines that left claims at their lowest level in nearly three years.

Stocks have gained in recent days on investor optimism for the strong earnings growth in 2004. But with the main gauges trading at their highest levels in nearly two years, analysts say valuations might be getting a bit high.

Gainers included Dow component Merck & Co., which rose 45 cents to $45.95, after the drug company filed a new application with the Food and Drug Administration for its Arcoxia pain reliever.

US Airways added 3 cents to $6.22 after the airline said it would lay off more than 550 flight attendants next month to help cut costs.

But Murphy Oil Corp. dropped $2.55 to $65.47 after the oil company lowered its 2004 earnings outlook below Wall Street's estimates.

Advancing issues outnumbered decliners 7 to 5 on the New York Stock Exchange. Volume came to 93.43 million shares, compared with 117.78 million traded at the same point Tuesday.

The Russell 2000 index, which tracks smaller company stocks, fell 5.67, or 1 percent, to 559.80.

In Europe, Britain's FTSE 100 and France's CAC-40 rose 0.2 percent. Financial markets in Japan and Germany were closed Wednesday for the New Year holidays.

Stocks rebounded in 2003, with the S&P 500, Dow and Nasdaq poised for their first annual increases since 1999 amid optimism economic growth will boost company profits. The S&P 500 is up 26 percent this year. The Dow is up 25 percent and the Nasdaq has climbed 50 percent.

"It's been one hell of a market this year," said Donald Ross, president and chief investment officer at National City Investment Management Co. in Cleveland, which has $28 billion in assets. "We still are more optimistic. Nominal growth is strong, revenue is good, margins will explode. We're looking for a 15 percent gain in earnings next year."

The Dow has surged 6.6 percent this month, the biggest monthly advance since October 2002 and best December since 1991. The S&P 500 has added 4.8 percent for its ninth monthly gain in 10. The Nasdaq is up 2.1 percent, its 10th advance in 11 months.

"The economy will drive higher profit growth in 2004, and that bodes very well for the stock market," said James Gribbell, who helps manage $1.5 billion at David L. Babson & Co. in Cambridge, Mass. "The growth in employment will continue to improve as the recovery unfolds," next year, said Gribbell. He expects the S&P 500 to rise 10 percent to 11 percent in 2004.

archive

  • Most Read
  • Discussed
  • Most E-mailed

Calendar »

  • 3 Thu
  • 4 Fri
  • 5 Sat
  • 6 Sun
  • 7 Mon