Stocks ease in pre-holiday trading

NEW YORK, Dec. 24 (UPI) -- Stock prices on the New York Stock Exchange and the Nasdaq Stock Market were slightly lower early Tuesday in light pre-Christmas trading, pressured by weak reading on the economy.

Markets will close at 1 p.m. EST for the Christmas holiday. Trading will resume on Thursday.

The blue-chip Dow Jones industrial average, which lost 18.03 points Monday, was down 22.70 points to 8,470.50. The tech-heavy Nasdaq composite index, which rose 18.64 points in the previous session, was down 1.03 points to 1,380.66.

The broader New York Stock Exchange composite index was down 1.24 to 478.03 while the Standard & Poor's 500 index was down 2.20 to 895.18.

The American Stock Exchange composite index was down 0.49 points to 828.61 while the Wilshire 5000 Index was down 20.73 to 8,474.28.

Big Board volume amounted to 98 million shares.

Analysts said a surprise decline in durable goods orders countered a positive court ruling for Sun Microsystems in the abbreviated Christmas Eve session.

The Commerce Department said orders for durable goods, or items meant to last three years or longer, fell by 1.4 percent to $169.62 billion in November, providing further evidence the U.S. economy softened during the fourth quarter.

Reports on durable goods are highly volatile and analysts caution against using the monthly figures as a strong indication of which direction the U.S. economy is heading. But after growing at a healthy 4 percent clip during the third quarter, most economists believe the economy has since sharply slowed to about a 1.5 percent growth rate during the current fourth quarter.

The weakness in November durable-goods orders was broad-based with increases isolated to defense-related orders.

In other economic news, heavy discounting and holiday promotions failed to give U.S. chain store sales a last-minute boost last week, according to joint report by the Bank of Tokyo-Mitsubishi and UBS Warburg.

U.S. chain store sales inched up 0.1 percent in the week ended Dec. 21 after a 1.9 percent gain in the preceding week.

"Although Saturday's sales were relatively good, the week's overall sales performance was less than spectacular," the report said.

Sales compared to last year grew by 1.7 percent, down from a 4.5 percent year-over-year growth rate reported in the previous week.

The BTM/UBSW Weekly Chain Store Sales Snapshot is compiled from seven major discount, department and chain stores across the country that report their weekly results. Those stores include J.C. Penney, Sears, Target, Kmart, Wal-Mart, Federated Department Stores Inc. and May Department Stores Co. The BTM/UBSW index measures sales growth with the year 1977 equaling 100.

Although few creatures were stirring on Wall Street, some did stir for Sun Microsystems Inc.

The software company scored a victory late Monday when a federal judge ordered arch-rival Microsoft Corp. to distribute Sun's Java programming language while a private antitrust suit is pending.

Meanwhile, U.S. Treasury prices pushed higher. The 10-year bond rose 15/32 to 100 23/32. Its yield, which moves in the opposite direction of its price, slipped to 3.91 percent from 3.97 percent late Monday.

In Europe, stock prices ended slightly higher in paper-thin pre-holiday trading in London and Paris. The London International Stock Exchange's blue-chip FTSE-100 index gained 5.2 points to 3,942.1 in a half-day session. The French CAC-40 index slipped 6.34 points to 3,081.28 as the half-day Christmas Eve session led to some volatility.

Analysts said British and French stocks were pressured in light, pre-holiday trade, due to fears over a U.S.-led war against Iraq, while oil stocks continued their rise as crude-oil prices swept to two-year highs.

Volume dwindled as bourses shut down for Wednesday and Thursday, with most dealers already on holiday. Markets in Italy, Spain, Frankfurt, Ireland, Austria, Switzerland and the Nordic markets were shut for the Christmas holiday.

Corporate newsflow wound to a halt in listless, pre-Christmas trade, with most activity centered on the energy and retail sectors.

Oil stocks were prominent gainers across the region, reflecting a further surge in the price of crude, as the ongoing general strike in Venezuela continued to stifle production from the world's fifth-largest oil exporter.

War tension also persisted after U.S. Defense Secretary Donald Rumsfeld Monday warned North Korea against pressing ahead with a nuclear weapons program. He said the United States was capable of winning a large-scale conflict on two fronts if necessary.

Retailers remained out of favor across the region as worries over lackluster Christmas sales continued to weigh on the sector. Telecom stocks also came under pressure.

France Telecom fell after the European Union Commission said it will take a few more weeks to determine whether the French government's bailout of France Telecom constitutes illegal aid.

Earlier in Asia, prices on the Tokyo Stock Exchange ended higher for the third consecutive session, lifted by hopes that selling pressure would ease in the run-up to the end of the year. The blue-chip Nikkei Stock Average rose 105.49 points, or 1.3 percent, to 8,512.37.

The market was closed for a public holiday on Monday.

Analysts said after a directionless morning session, Tokyo stocks jumped in the afternoon. Traders attributed the move to share purchases by public pension funds following a bullish profit report on Canon Inc. and hopes that selling pressure would ease in the run-up to the end of the year.

Individuals have been dumping stocks recently to take advantage of current capital gains tax rules that give investors an option of paying 1.05 percent of the value of any shares sold.

The last trading day for settlement using this often less-costly option is Wednesday.

Traders also said public pension funds were behind the market's rise. Their purchases were partly to adjust their portfolios since the tumbling market has lowered the percentage of stocks held in value terms.

Elsewhere in Asia, prices ended slightly lower on the Hong Kong Stock Exchange. The blue-chip Hang Seng Index, which lost 57.76 points during the previous session, slipped 9.30 points, or 0.1 percent, to 9,561.63.

Most investors in Hong Kong held off making new bets ahead of the Christmas holiday although some bargain-hunters bought select blue chips, analysts said.

Trading was extremely thin with turnover marking its lowest level in three years. The market will be shut for the Christmas holidays and will reopen on Friday.

Prices also ended lower on the South Korean Stock Exchange. The Korean Composite Stock Price Index, or Kospi, which lost 18.06 points during the previous session, lost 13.56 points, or 2 percent, to 677.82.

Analysts said stocks were pressured by selling by institutional investors in the run-up to the New Year.

Prices also ended lower on the Taiwan Stock Exchange. The Weighted Price Index, which eased 22.90 points Monday, lost another 28.27 points, or 0.6 percent, to 4,544.50.

Elsewhere around the Pacific region, prices ended little changed on the Australian Stock Exchange. The blue-chip All Ordinaries Index, which gained 20.30 points during the previous session, slipped 0.30 point to 2,998.80.

Markets in Australia will be closed on Christmas and Boxing Day. Trading will resume on Friday.