NEW YORK – Stocks ended mixed Wednesday as investors rushed to book profits after a rally spurred by Federal Reserve Chairman Alan Greenspan expressed confidence in a U.S. economic turnaround.
The blue-chip Dow Jones industrial average added 12.32 points, or 0.12 percent, to 10,127.58, after rising about 140 points early in the session. The tech-laden Nasdaq Composite shed 14.98 points, or 0.85 percent, to 1,751.88, after climbing about 1.2 percent earlier in the day. Tech giants Cisco Systems Inc. (CSCO), Juniper Networks Inc. (JNPR) and Intel Corp (INTC) led the decline.
Also cutting gains, the broader Standard & Poor's 500 Index finished essentially unchanged, up 0.51 of a point, or 0.05 percent, at 1,109.89.
"People are realizing the recovery will not be that fast," said Howard Kornblue, portfolio manager at ING Pilgrim, which manages $18 billion. "Maybe they were a little bit more optimistic, thinking Greenspan was going to make it appear the recovery was going to be sooner rather than later. But as they digested the comments, they realized it will take more time."
The leading indexes had rallied in the morning, inspired by new data showing a rise in demand for big-ticket items like refrigerators last month. Combined with the Greenspan comments, that report helped underscore growing expectations the economy is emerging from recession.
Greenspan's remarks signaled the central bank would likely leave interest rates at 40-year lows as it assesses the economy's health. But some market watchers saw that as a double-edged sword.
"Greenspan got the bulls rushing a bit, but when you read between the lines, you see the Fed is looking at the prospect of not raising rates too soon, precisely because of the non-recovery in business fixed investment," said Richard Babson, chairman of Babson-United Investment Advisors Inc.
Also dampening Wall Street's outlook for the economy was a report showing a sharper-than-expected decline in new home sales in January. This stood in contrast with Monday's data showing better-than-expected sales of existing homes that month.
Cisco (CSCO), the most active stock on Nasdaq, continued to pile on losses after brokerage house Wachovia Securities cut its earnings estimates for the Web gear giant, arguing some of its biggest customers in the beleaguered telecommunications sector continue to suffer.
Cisco slid 8 percent, while its rival Juniper Networks had a drop of 6.7 percent.
"Although the (Cisco) stock has declined about 15 percent to 20 percent since the fiscal second-quarter 2002 earnings release, we don't feel that a sequential decline is yet built into expectations," said Wachovia analyst Stephen Koffler.
Among Dow stocks, United Technologies Corp. (UTX) rose after its jet engine maker Pratt & Whitney said it had been awarded a $185 million engine contract by Boeing Co. (BA)'s financing arm and aircraft leasing firm Ansett Worldwide. United Technologies jumped $1.15 to $72.95. Boeing added 75 cents to $45.90, also helping the Dow average.
Cisco lost $1.26 to $14.24. Rival Juniper Networks Inc. (JNPR) declined 68 cents to $9.51. Caspian Networks Inc., a privately held network gear maker, said it had secured $120 million in venture funding to back its attempt to capture market share in the "core" router market from Cisco and Juniper Networks.
Intel (INTC), the top chip maker, dropped 13 cents to $29.89.
ImClone Systems Inc. (IMCL) soared 32 percent after it said U.S. regulators will reconsider its request to market its lead cancer drug, Erbitux, if the firm resubmits U.S. trial data and adds new European trial data. ImClone jumped $5.01 to $20.53, while partner Bristol-Myers Squibb Co. rose $1.98 to $47.49.
Bioject Medical Technologies Inc. (BJCT) lost nearly 57 percent. The maker of needle-free drug delivery systems said Amgen Inc. (AMGN) will not pursue development of two Bioject devices, Iject and the B2000. Bioject shares plunged $5.31 to $4.05. Amgen lost 75 cents to $57.87.
The Dow pierced technical resistance — the point where sellers are likely to emerge — at 10,210, and was looking likely to bump up against the 10,300 level, before the rally lost steam. Resistance is at 1,800 for Nasdaq and 1,120 for the S&P, according to research firm Schaeffersresearch.com.
"But the market is very segmented and if you are talking about technology stocks, it's very hard to be bullish," said Ken Tower, chief technical analyst at CyberTrader Inc. "There are few names in the semiconductor area that have attractive trends, but most of the stocks there, you are just looking for an opportunity to sell them on a rally."
Support — where buyers are expected to swoop in — is at 10,000 for the Dow, 1,700 for the Nasdaq and 1,090 for the S&P. The levels are key elements of technical analysis, which studies prices, volume and charts.
Advancing shares led declining shares by 3-to-2 on the New York Stock Exchange, and volume was moderate.
The Russell 2000 index ended up 1.32 at 472.61.
Overseas, Japan's Nikkei stock average rose 3.63 percent. Germany's DAX index went up 1.28 percent, Britain's FT-SE 100 rose 0.77 percent, and France's CAC-40 climbed 1.93 percent.
Reuters and the associated Press contributed to this report.
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