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Stocks drop terror madcow fears { May 20 2003 } Original Source Link: (May no longer be active)
http://reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=2780273http://reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=2780273
U.S. stocks drop as terror, mad-cow fears take toll
Tue May 20, 2003 04:30 PM ET
(Updates to close)
By Vivian Chu
NEW YORK, May 20 (Reuters) - Stocks edged lower on Tuesday, weighed by renewed fears of a terror attack in the United States and a sell-off in shares of fast-food chain McDonald's Corp. MCD.N on news that a cow tested positive for mad cow disease in Canada.
Earlier, the U.S. government raised its terror alert status to the second-highest level due to the risk of attacks in the United States. The decision to change the color-coded alert to "high," or "orange," from "elevated," or "yellow" follows a Federal Bureau of Investigation warning that an attack on U.S. soil is possible, though it said it had no specific threat information.
"You had the terror alert earlier and some people sold on that, but then cooler heads prevailed," said Bob Basel, senior trader at Smith Barney. "You also had a situation at Penn Station which exacerbated the fears, but that's been taken care of."
Late Tuesday afternoon, police halted some train traffic from New York's Pennsylvania Station as they checked a suspicious package, which turned out to be an object of no concern, according to a transit police spokesman.
The Dow Jones industrial average .DJI slipped 2.03 points, or 0.02 percent, to 8,491.36. The broader Standard & Poor's 500 Index .SPX finished down 1.04 points, or 0.11 percent, at 919.73. The technology-laced Nasdaq Composite Index .IXIC shed 1.68 points, or 0.11 percent, to 1,491.09, based on the latest data.
Advancers outnumbered decliners by a ratio of 9 to 7 on the New York Stock Exchange, but losers outnumbered gainers on Nasdaq by a ratio of 8 to 7. Trading was heavy, with roughly 1.50 billion shares changing hands on the Big Board, and about 1.67 billion traded on the Nasdaq.
Wall Street is also waiting for Federal Reserve Bank Chairman Alan Greenspan to testify on the U.S. economy before Congress on Wednesday. Greenspan's speech will mark his first comments on the economy since May 6, when the central bank warned of a risk of deflation.
"The stock market has been consolidating lately, but the trend is still definitely up," said Louis Navellier of Navellier & Associates. "Trading volume is softening today as investors wait for Greenspan's speech tomorrow."
McDONALD'S SINKS, HOME DEPOT SOARS
McDonald's Corp. MCD.N tumbled 6.66 percent on news that one cow in Alberta, Canada, tested positive recently for mad cow disease. McDonald's shares sank $1.21 to $16.95 and were the Dow's biggest percentage loser. Tyson Foods Inc. TSN.N , the largest U.S. beef processor, sank 4.86 percent, or 46 cents, to $9.01.
Mad cow disease, also known as bovine spongiform encephalopathy, has killed more than 100 people in Europe. It was the first confirmed case of the disease in a cow raised in Canada. The United States, which has never reported a case of mad cow disease, issued a temporary ban on beef imports from Canada because of the case.
Among gainers, Home Depot, the world's largest home improvement retailer, leaped more than 9 percent and helped underpin the Dow. The retailer reported higher-than-expected earnings, helped by demand for new products and store upgrades. Home Depot shares rose $2.60 to $30.67.
Nordstrom Inc. JWN.N jumped $1.39, or 8.76 percent, to $17.25. The department store operator posted lower first-quarter earnings, but it also forecast second-quarter earnings at the high end of analysts' estimates. The S&P retail index .RLX ended up 2 percent.
On the Nasdaq, Inspire Pharmaceuticals Inc. ISPH.O tumbled $1.37, or 8.48 percent, to $14.78, after the drug developer said its experimental allergy drug did not work in a late-stage clinical trial.
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