US stocks: Market ends down slightly amid profit-taking

NEW YORK - US stocks closed slightly lower on Monday as the dollar's rally and a drop in oil prices were not enough to stop investors from selling stocks and taking profits after last week's gains.

Shares of toy maker Hasbro Inc. slid after its profit missed Wall Street's target, while the stock of consumer products group Clorox Co. finished higher after posting a better-than-expected profit that rose more than six-fold.

The Dow Jones industrial average inched down just 0.37 of a point, or unchanged from a percentage standpoint, to close at 10,715.76. The Standard & Poor's 500 Index was down 1.31 points, or 0.11 per cent, to end at 1,201.72. The technology-laced Nasdaq Composite Index was down 4.63 points, or 0.22 per cent, to finish at 2,082.03.

"After some dramatic moves higher last week, a pause is certainly expected," said Donna Van Vlack, director of trading at Brandywine Asset Management.

All three major indexes rose more than 1 per cent on Friday, ending the week higher for the second consecutive week.

"There isn't a lot of major earnings news due this week, so you may have folks locking in some profits," Van Vlack said.

Trading was moderate, with 1.35 billion shares changing hands on the New York Stock Exchange, just under the 1.46 billion daily average for last year. About 1.71 billion shares were traded on Nasdaq, below the 1.81 billion daily average last year.

On the Big Board, advancing shares slightly outnumbered declining shares, while decliners narrowly outpaced advancers on the Nasdaq.

The dollar strengthened after US President George W. Bush handed a budget to Congress that forecast a narrowing in the budget deficit. The prediction of a narrower budget deficit added to optimism spawned by Federal Reserve Chairman Alan Greenspan's recent comments, suggesting a narrowing of the US current account deficit.

Against the rising dollar, the euro suffered its steepest single-day decline since the first week of January to a fresh three-month low of around US$1.2731, according to Reuters data. The greenback also gained against the yen to trade at 104.78 yen in late afternoon trading. A stronger dollar can help stocks because it makes US equities more attractive to investors.

US crude futures ended down more than US$1 after Opec producers signaled the cartel will likely wait until its meeting in mid-March to consider cutting production.

NYMEX March crude oil futures fell US$1.20 to settle at US$45.28 a barrel after earlier slipping as low as US$45.10.

Shares of Pfizer Inc., the world's largest drug maker and a Dow component, rose 2.8 per cent, or 68 cents, to US$24.91 ahead of a US Food and Drug Administration meeting to review the risks and benefits of painkillers, including the company's Celebrex.

Defence stocks, including Lockheed Martin Corp. and Northrop Grumman Corp., rose slightly. Military spending is set to keep growing in Bush's proposed budget but at a slower pace. Lockheed rose nearly 1 per cent, or 49 cents, to US$58.14 and Northrop gained 1.4 per cent, or 75 cents, to US$53.10.

In earnings-related stock moves, the shares of Hasbro, the No. 2 US toy maker, fell 2 per cent, or 40 cents, to US$20.00 after the company reported quarterly earnings that missed analysts' expectations.

The stock of health insurer WellPoint Inc. slipped 3.2 per cent, or US$4.04, to US$120.85 after posting lower quarterly earnings as it grappled with soaring medical costs.

Shares of Clorox climbed almost 1 per cent, or 58 cents, to US$59.18 after the maker of household bleach and Glad trash bags said its quarterly profit increased more than six-fold. The company attributed profit gains to higher sales, cost savings and the transfer of some of its businesses to Henkel KGaA, a German soap and adhesives company.

In merger news, Riggs National Corp., whose banking unit pleaded guilty for failing to report suspicious transactions, said its merger with PNC Financial Services Group Inc. has fallen apart. Riggs stock fell 6.6 per cent, or US$1.40, to US$19.85, while PNC Financial shares gained 0.7 per cent, or 38 cents, to US$54.58.

- REUTERS