Stocks Climb Despite Selling Late in Session

Stronger-than-expected holiday sales at Wal-Mart Stores and Yahoo sent stocks climbing Wednesday in light trading, but Wall Street’s enthusiasm faded late in the session, frustrating hopes for a big post-Christmas rally.

“This is still a good rally,” said Al Goldman, chief market strategist at A.G. Edwards & Sons. “But we’ve come awful far, awful fast. And when people saw the Dow up more than 100, they started selling to take profits.”

The Dow Jones industrial average closed up 52.73 points, or 0.5%, at 10,088.07, after rising as much as 133 points earlier in the session. Broader stock indicators also finished higher, despite some late afternoon selling. The Standard & Poor’s 500 index gained 4.72 points, or 0.4%, to 1,149.37. The technology-focused Nasdaq composite index rose 16.22 points, or 0.8%, to 1,960.70.

Winners outnumbered losers 2 to 1 on the New York Stock Exchange and 4 to 3 on Nasdaq. It was one of the slowest days of the year on Wall Street, with trading about 40% below normal.

Even with the late sell-off, the S&P; 500 is up 10.4% so far in the fourth quarter and is on track for its biggest quarterly gain since the last three months of 1999. The benchmark index is down 12.9% year to date, while the Nasdaq is off 20.6% for the year and the Dow is down 6.5%.

On Wednesday, Wal-Mart rose $1.02 to $58.15 after reporting that sales from Thanksgiving through Christmas Eve were higher than expected. Yahoo climbed 84 cents to $17.51 after the online company reported holiday sales rose 86% from the previous year. The enthusiasm spread to Internet retail giant Amazon.com, which rose $1.27 to $11.10, on hopes that its results would improve, too.

The news indicated that, despite one of the most disappointing pre-holiday sales season in years, consumers are still spending.

“Christmas sales haven’t been spectacular, but what these new numbers are telling you is that they may not have been as terrible as feared,” said Larry Wachtel, market analyst for Prudential.

Tech stocks also climbed, including those of companies that depend on computer sales for business. Gateway advanced 17 cents to $7.54; Intel rose 27 cents to $32.29.

Energy stocks were higher on news that the Organization of the Petroleum Exporting Countries is expected to approve a reduction in output by week’s end, a decision that probably would help stabilize sagging oil prices. ExxonMobil gained 60 cents to $39.60, and the Philadelphia oil services index gained almost 4%.

Wall Street was closely watching political tensions between India and Pakistan. Some fear the two nuclear-armed nations are headed for war. U.S. troops also remain in nearby Afghanistan.

Investors also were unnerved by news of a videotape of Osama bin Laden that appeared to have been made early this month.

Aside from political conflicts or the possibility of more terrorist attacks, most analysts expect the remaining trading sessions in 2001 to be subdued. Most fund managers already have finished making year-end adjustments to their portfolios, and many investors have completed any tax selling.

“Christmas and New Year are historically a good time for the market,” Goldman said.

In other highlights Wednesday:

* Bond yields climbed in anticipation of the federal government’s planned sale of $23 billion in new debt today. The yield on the benchmark 10-year Treasury note rose to 5.20% from Monday’s close of 5.14%. The yield on the two-year T-note rose to 3.23% from 3.15% Monday--the highest since before the Sept. 11 attacks.

* AT&T; Wireless Services ranked as one of the most active stocks on the Big Board and rose 59 cents to $13.88 after saying former parent AT&T; had sold off its remaining equity stake in the No.3 U.S. wireless telephone company.

* Microsoft, which added the most market value of any U.S. stock the last year, advanced 41 cents to $67.68. The biggest software maker estimated retail sales on its MSN network Web site reached $5.6 billion during November and December, a 56% increase from the same period last year.