- NEW YORK (Reuters) - Stocks
fell on Tuesday, giving back some recent gains that lifted the market to
5-week highs, as investors mulled mixed corporate earnings and negative
calls from Wall Street analysts.
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- "It's August, it's really slow, the indexes had
some nice rallies and everyone is taking a wait-and-see attitude and catching
their breath," said Kevin Cohen, senior trader with Wedbush Morgan
in Los Angeles.
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- Investors decided to cash out some gains after the broad
Standard & Poor's 500 index .SPX has risen 9 percent in about one month
after a sell-off in the spring and summer sent stocks to levels not seen
since mid-1997.
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- "The market has moved up 1,500 points in a very
short period of time, so we are in for a breathing spell," said Alan
Ackerman, market strategist at Fahnestock & Co., referring to the Dow
Jones industrial average. "Techs, telecoms and financials are under
some profit-taking pressure, but on balance the market continues to show
remarkable resilience."
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- He noted that among factors pressuring the market was
the uncertainty over whether the United States was planning to strike Iraq.
Oil prices topped $30 a barrel for the first time in 15 months.
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- Blue chips took a hit as a downgrade by UBS Warburg sent
shares of the three largest local U.S. telephone companies, including SBC
Communications Inc. SBC.N , down. Home Depot HD.N lent some support with
its rosy corporate results.
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- The Dow Jones industrial average .DJI fell 118.72 points,
or 1.32 percent, to 8,872.07, according to the latest available figures.
The broader Standard & Poor's 500 Index .SPX slipped 13.27 points,
or 1.40 percent, to 937.43. The technology-laced Nasdaq Composite Index
.IXIC was down 17.95 points, or 1.29 percent, at 1,376.59.
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- Chip and chip-equipment stocks dragged on the Nasdaq
market, retreating after a string of gains that have helped drive the Nasdaq
Composite Index up nearly 4 percent and the Philadelphia Stock Exchange's
semiconductor index .SOXX up almost 7 percent so far this month.
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- Chip equipment makers like Novellus Systems Inc. NVLS.O
and KLA Tencor Corp. KLAC.O also took a hit. Novellus fell $1.52 to $29.27,
and KLA Tencor dropped $2.08 to $38.74. Many major technology stocks also
fell. Intel Corp. INTC.O fell 49 cents to $18.97, and Microsoft Corp. MSFT.O
. sagged 96 cents to $51.04.
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- The market was pressured after news that about 70 people
were being decontaminated in McAllen, Texas, after they were exposed to
an unidentified white powder sent to a Hotels.com office. The powder turned
out not to be hazardous, a fire department spokesman said later.
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- "The market traded down a little on the fear that
it could be something like anthrax," said Brian Pears, head of equity
trading at Victory Capital Management. "It's quiet and we will be
subject to rumors and seemingly unimportant stories that still impact the
market."
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- Shares of SBC Communications, BellSouth Corp BLS.N and
Verizon Communications VZ.N -- also known as the Baby Bells -- fell after
UBS Warburg downgraded the stocks and cut their earnings and price targets.
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- SBC, a Dow component, fell $2.19 to $27.68, BellSouth
fell $1.21 to $25.50 and Verizon lost $1.79 to $31.80.
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- Cisco Systems CSCO.O , the No. 1 maker of equipment that
directs Internet traffic, said it will buy Andiamo Systems Inc., in a deal
that puts it in direct competition in the storage switch market with Brocade
Communications Systems Inc. BRCD.O and McData Corp. MCDT.O . Brocade shares
lost more than 2.7 percent, or 44 cents at $15.74, and McData shares lost
2 percent, or 21.1 cents at $10.149, while Cisco shares moved sideways
and were last up 1 cent at $14.73.
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- Shares of Agilent Technologies A.N lost $1.24 at $16.20,
or 7 percent. The electronics and testing equipment maker reported a steep
quarterly loss on Monday.
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- Home improvement giant Home Depot, up $1.22 at $30.25,
or 4.2 percent, helped underpin the Dow. The home-improvement retailer
reported higher earnings, aided by cost controls and low mortgage rates,
which spurred consumer home purchases.
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- Qwest Communications International Q.N soared 31.7 percent,
or 71 cents to $2.95 after it agreed to sell its directory publishing business,
QwestDex, to two private investment funds for $7.05 billion. The deal would
give the troubled telephone company some much needed cash as it attempts
to work through a number of regulatory and financial concerns.
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- Style guru Martha Stewart agreed to turn over phone and
e-mail records to a U.S. House of Representatives panel probing whether
she had inside information when she sold shares of ImClone Systems Inc.
IMCL.O a day before the firm disclosed bad news.
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- Shares of Stewart's publishing and merchandising company,
Martha Stewart Living Omnimedia. MSO.N , hit in recent weeks by the questions
surrounding her, surged 11 percent, or 91 cents at $9.05.
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- Worries about corporate corruption have faded a bit since
the Aug. 14 deadline passed for the top brass at hundreds of companies
to swear their companies' books are accurate, but have not been wiped completely
from investors' minds.
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- Washington state prosecutors are working with other U.S.
states to investigate possible lending abuses by Household International
Inc. HI.N , the No. 2 U.S. consumer finance company, according to a spokesman
in the Washington attorney general's office. Shares of Household, which
declined to comment, skidded $1 to $36.75.
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