Subject: [NEXTEL-1] Consumer report sparks selloff on Wall Street- Morgan Stanley downgrads Nextel

From: Marcelrf <[email-masked]>
Date: Tue, 24 Feb 2004 23:54:26 -0500

Consumer report sparks selloff on Wall Street
By MICHAEL J. MARTINEZ, AP
Business Writer
Published Tuesday, February 24th,
2004

NEW YORK (AP) - A sharp drop in
consumer confidence gave
investors another excuse to sell
Tuesday, sending most stocks
moderately lower in what some
analysts are starting to call a market
correction.

The worse-than-expected drop in
the Conference Board's consumer
confidence index triggered the
selloff. The index fell to 87.3 in
February from 96.4 a month earlier;
that reading was an 18-month high
for the index. Wall Street analysts had expected the figure to come in
at 92 or 93.

Combined with a fear of overly high stock prices and overall concerns
about the pace of the economic recovery, Tuesday's selling continued
more than a week of down markets that could be the correction some
analysts and investors have been expecting.

A correction is a reversal of the prevailing trend in the markets, which
have been rising steadily since last spring. Economists see corrections
as important parts of the overall market mechanism, keeping stock prices
from becoming inflated.
"We haven't had a meaningful correction since last March," said Matt
Kelmon, portfolio manager of the Kelmoore Strategy Funds. "In the
near-term it's painful, but it's very, very healthy."

According to preliminary calculations, the Dow Jones industrial average
lost 43.25, or 0.4 percent, to 10,566.37, having fallen more than 80
points earlier in the session.

Broader stock indicators were narrowly lower. The Standard & Poor's 500
index was down 1.90, or 0.2 percent, at 1,139.09. The tech-heavy Nasdaq
composite index slipped 2.08, or 0.1 percent, to 2,005.44. The Nasdaq
has nearly erased its 2004 gains over the past week.

Wall Street analysts had expected the consumer confidence measure to
decline, but they were also hoping some components of the index would
alleviate investors' concerns. The larger-than-expected drop took many
investors by surprise.
The confidence figure is merely a symptom of larger overall concerns on
the part of consumers and investors, according to Hugh Johnson, chief
investment officer at First Albany Corp.

"The report sort of tells investors there are some reasons to worry
about the economy and earnings, and therefore reasons to worry about
valuation," Johnson said.

Kelmon said the correction could be relatively short, with the major
indexes back up to their recent highs next month. He added that
first-quarter earnings, expected to be as good as those from the fourth
quarter, will help fuel the rebound.
Federal Reserve Chairman Alan Greenspan testified on Capitol Hill on the
state of federally funded mortgage companies, Fannie Mae and Freddie
Mac, saying they could pose a threat to the country's financial system
if their debt is not restrained through greater regulation.  Fannie Mae
fell $2.65 to $76.25 and Freddie Mac shed $1.81 to $62.12.

Telecom stocks fell as Morgan Stanley downgraded them before the session
began. Among the downgrades, Sprint Corp. fell 49 cents to $17.98,
Nextel Communications shed 49 cents to $27.05, and AT&T Corp. gained 23
cents to $19.95. The investment house upgraded AT&T Wireless Services,
which rose 7 cents to $13.65, and Verizon Communications, which climbed
$1.08 to $38.09.

Comcast Corp. rose 31 cents to $29.82 after saying its $54 billion bid
for The Walt Disney Co.  was not properly considered by the Disney
board. Disney was down 79 cents at $25.96.

Clear Channel Communications, owner of local radio and television
stations, dropped 92 cents to $42.92 after posting earnings that were 2
cents short of analysts' expectations.

Advancing issues barely outnumbered decliners on the New York Stock
Exchange, where volume came to 1.52 billion shares, compared with 1.38
billion on Monday. On the Nasdaq market, decliners were ahead of
advancers by a 6 to 5 ratio.
The Russell 2000 index of smaller companies was up 1.67, or 0.3 percent,
at 571.87.

Overseas, Japan's Nikkei stock average dropped 2.1 percent. In Europe,
Britain's FTSE 100 closed down 0.6 percent, France's CAC-40 finished 1.3
percent lower and Germany's DAX index tumbled 1.9 percent for the
session.

http://www.islandpacket.com/24hour/business/story/1156927p-8059500c.html

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