Stocks Weaken Amid Profit-Taking, Airport Scare

NEW YORK – Stocks slipped Friday as investors took some profits after big gains this week, while a security shutdown of Atlanta's airport underscored the market's vulnerability to air-travel scares.

Major indexes, however, closed well off session lows and finished the week solidly higher. The blue-chip Dow Jones industrial average slipped 5.40 points, or 0.05 percent, to 9,866.99. The broader Standard & Poor's 500 Index dipped 3.59 points, or 0.31 percent, to 1,138.65. The technology-laced Nasdaq Composite Index edged down 1.99 points, or 0.10 percent, to 1,898.58.

In the preceding three trading days, the Dow had risen 318 points, or 3.3 percent. For the week, the Dow ended with gain of 2.7 percent, the Nasdaq rose 3.8 percent and the S&P 500 gained 1.6 percent.

"There has been an easing of anxieties about the war in Afghanistan, but Americans are still edgy about any possible terrorist retaliation on our shores," said Alan Ackerman, market strategist at Fahnestock & Co. "The industrial production numbers left a lot to be desired. The sense that the market rally presages a turn in the economy may need more time to develop."

In the early afternoon, Atlanta's Hartsfield International Airport was shut down after a man ran past a security checkpoint and down an escalator used by arriving passengers, according to an airport official. Officials said they had not captured the man, but had security film of him.

Also weighing on Friday's market was new data showing U.S. industrial output last month took its biggest dive in nearly 11 years and extended a string of monthly declines that was the longest since the Great Depression of the 1930s, the Federal Reserve said on Friday.

On the positive side, the October Consumer Price Index dropped 0.3 percent, in line with analysts' expectations, and increased he likelihood that the Federal Reserve will clash rates once again when it meets on Dec. 11. 

Many traders were cashing out after a run that has lifted the broader stock market about 7 percent in the past two weeks and are preparing for a sluggish trading week wrapped around the Thanksgiving holiday on Thursday.

However, "the market's got some firm underpinnings at this point, with the geopolitical situation going well, and the stimulus that's been packed into the pipeline, which should really set us up for a good rebound in 2002," said Nat Paull, a portfolio manager at New Amsterdam Partners.

Dell dropped after the No. 1 maker of personal computers said late Thursday its quarterly net income fell 36 percent as it waged a price war amid dismal corporate demand. It beat analysts' earnings forecasts, but offered what some consider a mixed outlook.

The stock fell $1.09, or nearly 4 percent, to $26.60. Other computer makers also fell, including Gateway Inc. , down 24 cents at $8.17; Hewlett-Packard , down 59 cents at $21.50, and merger partner Compaq Computer, off 40 cents at $10.30.

Financial services companies American Express and Citigroup took a hit after downgrades by Wall Street analysts. American Express fell $1.26 to $33.13 after UBS Warburg cut its rating on the company's stock. Citigroup fell $1.29 to $48.80 after a downgrade by Prudential. Both weighed on the Dow average.

Xerox Corp. , embroiled in a probe by federal regulators and allegations of accounting irregularities, slumped 7 percent. The company, which appointed a new accounting chief, saw its shares fall 51 cents to $6.58.

Gap Inc. posted its first quarterly loss in at least 10 years, revealing damage from the retailer's long struggle to reverse diminishing sales in a somber economy and recover from a series of fashion missteps that have caused its core customers to fade away. The stock slipped 45 cents to $14.10.

Starbucks fell $1.67 to $17.50, or 8.7 percent. It said its profit rose 22 percent, meeting Wall Street's expectations, but the company gave a less aggressive forecast than it previously had, reflecting growing concern about the U.S. economy.

Communications testing equipment and microchip maker Agilent Technologies said it will eliminate 4,000 jobs, doubling previously announced cuts, and pushed back hopes for a business recovery for half a year or more. The shares sagged 90 cents to $24.13.

Stocks trimmed their losses after a U.S. official said U.S. special forces killed one of the leaders of Usama bin Laden's Al Qaeda network. The United States and its allies are hotly pursuing bin Laden as the key suspect in the Sept. 11 attacks on New York and Washington.

"The market was due for a little bit of a breather and I think that that's what you're seeing," said Robert Basel, head of listed equity trading at Salomon Smith Barney Inc.

"It would only be a small positive (for stocks) for this guy to be found dead. No. 1, bin Laden is still out there, and No. 2, just because these people are removed from the situation, doesn't mean that terrorism is done forever," Basel said.

Airline stocks reaped some of the day's biggest gains, bolstered by lower oil prices and passage of the aviation security bill. U.S. Airways jumped $1.27 to $6.97, or 22.28 percent.

Yahoo! Inc. rose after it reiterated its outlook for the fourth quarter and said it expects 2002 revenue to increase from 2001. Morgan Stanley analyst Mary Meeker added to Yahoo's upbeat tone Friday, saying she is more confident of a turnaround at the company. Yahoo's shares jumped 64 cents to $15.47.

Trading volume on the NYSE came to 1.04 billion shares, compared with 1.15 billion shares on Thursday.

The Russell 2000 index, the barometer of smaller company, stocks, rose 1.92, or 0.4 percent, to 451.31.

Overseas, markets were higher. Japan's Nikkei stock average finished up 1.5 percent. In Europe, Germany's DAX index climbed 1.1 percent, France's CAC-40 rose 0.2 percent and Britain's FT-SE 100 advanced 1.0 percent.

Reuters and the Associated Press contributed to this report.