Profit-Takers Move In, Pull Dow Down 27.48
Stocks closed with moderate losses today, with profit-taking hitting the market after Monday’s strong gains.
The Dow Jones average of 30 industrials closed 27.48 points lower at 2,874.75, after gaining 71.54 points on Monday. In the broader market, declining issues outpaced advancers by about 10 to 9 on heavy New York Stock Exchange volume of 256.16 million shares.
Traders said the market was taking a break after its sharp gains over the last week.
Today’s loss also indicated the market was consolidating to allow lower-risk issues to close a wide gap that emerged with the top performers in the three-week-old rally, said George Boyd, managing director of Kidder, Peabody & Co.
Boyd described the trend as a “balancing act, trying to keep all these sectors close in relative valuation.”
“It’s probably a breathing spell here,” he said.
Other analysts observed a sell-off as investors took profits in the lull of the broad-based rally. Since Jan. 9 the Dow Jones industrials have soared 431.93 points, or 17.5%.
Participants said no single piece of news was contributing to the market’s behavior.
But some investors became nervous when they realized market averages were reaching the all-time highs of last summer. Also sending prices lower was an early sell-off by foreign traders.
“I think it just ran so much that it was time to take it back a bit,” said Tom Walsh, vice president of Nikko Securities Co. International Inc. Walsh and other analysts said they saw no pattern in the sell-off, which he described as “helter-skelter.”
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