World stocks: Wariness in market as Memorial Day looms

NEW YORK - Stocks slid in thin trade as the United States market closed for the weekend. The New York Stock Exchange clocked its slowest day of the year as investors faced renewed fears of more attacks on America and signs of economic softness.

"All this rhetoric about the terrorism battle keeps a lid on the market," said Michael Kayes, chief investment officer at Eastover Capital Management.

Also dominating investor thinking ahead of the long Memorial Day weekend were concerns over soft demand that dogged chip gear giants like Applied Materials and a weaker reading on US economic growth which rattled some investors.

Investors opted to sell stocks, wary of staying in the market with the nation on guard for potential attacks like the September 11 assaults.

The blue chip Dow Jones industrial average fell 1.09 per cent, to 10,104.26. The technology-laced Nasdaq Composite Index lost 2.13 per cent, at 1661.49.

US gross domestic product, a key measure of economic growth, grew at a revised 5.6 per cent annual rate in the first quarter - its fastest pace in nearly two years, according to a Government report. But the pace was down from advance figures that showed a 5.8 per cent clip and below economists' expectations for a 6 per cent rate.

"People realise the economy is slowly improving, but not enough to make people raise estimates," said John Forelli, senior vice-president at Independence Investment.

Computer maker Sun Microsystems said companies were still holding back from investing in technology, but it stood by its forecast of a return to profit in its quarter ending in June. Sun, the second-most active Nasdaq issue, fell 55c to $6.86.

* In London, annual results from British mobile telephony giant Vodafone were expected to be the main focus for dealers this week, with investors hoping for better news from the stock market heavyweight.

The FTSE-100 index of leading shares closed at 5169.10 points.

Vodafone is expected to write-down the value of huge chunks of its assets on its balance sheet, effectively an admission that it overpaid for past acquisitions.

But analysts expect decent underlying pre-tax profits of about £6 billion ($18.6 billion), an increase of around 50 per cent from the previous year.

There could also be some merger activity. South African Breweries is due to report its annual results on Thursday, and rumours suggest that the group could announce the takeover of the Miller Brewery business owned by US group Philip Morris.

- AGENCIES