NEW YORK -- Wall Street pulled back Monday as investors tried to extend six weeks of blue chip gains but were stymied by war concerns and a tepid Wal-Mart outlook.
"What we're seeing is some skittishness from investors in the near term about the prospects of war with Iraq," said Kevin Caron, market strategist at Ryan, Beck & Co. "But I caution that we've already discounted a great deal of anxiety in the market."
"We're beginning a recovery process, and we think we've got significant room to move off these levels. I wouldn't be terribly concerned" about some moderate declines, he said.
By late afternoon, the Dow Jones industrial average was down 67.13, or 0.8 percent, at 8,511.96, following a 0.5 percent gain last week. Earlier in the day, blue chip stocks rose as much as 57 points.
The broader market was also lower. The Nasdaq composite index fell 5.79, or 0.4 percent, to 1,405.35. The Standard & Poor's 500 index dropped 7.20, or 0.8 percent, to 902.63.
Wal-Mart fell $1.60 to $53.89 after the retailer said it expected November sales to fall at the low end of its estimates.
Analysts say investors have been upbeat following October's big rally and have faith in a strengthening economic recovery, leading to six straight weeks of Dow advances, the longest weekly winning streak in 3 1/2 years.
Indeed, stocks got a big boost last week on stronger-than-expected retail sales and consumer sentiment, raising hope of continued consumer spending, which accounts for about two-thirds of the nation's economic activity.
"I think what the market feared as far as retail sales going into the holiday is not going to happen," said Scott Wren, equity strategist for A.G. Edwards & Sons. "People are still going to be out there spending money. I think that's one reason why we've been able to hang onto to these levels in the Dow."
But analysts caution that terrorism concerns and a war with Iraq continue to weigh on investors' minds, likely limiting gains in the coming weeks, particularly now that the better-than-expected earnings reports are largely complete.
U.N. inspectors met with Iraqi officials Monday as they prepared to search for weapons of mass destruction, a mission that could determine if there is war. Investors also are nervous after the FBI warned last week that al-Qaida would likely attempt a "spectacular" attack.
"It's never going to be a straight line, but I think we have moved from a position of decidedly negative activity in the market where you generally saw falling stock prices," Caron said. "You've now turned the corner, where you're seeing more positive weeks than negative weeks."
AT&T dropped 73 cents to $13.13 after Lehman Brothers cut the company's stock rating to "underweight" from "equal weight."
Lowe's declined $1.70 to $40.80 after the home improvement retailer despite reporting third-quarter earnings that beat analysts' expectations by 3 cents.
Gainers included UAL, which jumped 52 cents to $3.47, after the parent of United Airlines said it expected to cut 9,000 more jobs as part of a restructuring to return to profitability.
Bristol-Myers rose 33 cents to $24.38 after the pharmaceutical company said it received Food and Drug Administration approval to market its schizophrenia drug in the United States.
Declining issues outnumbered advancers 7 to 6 on the New York Stock Exchange. Volume was light at 962.66 million shares, compared with 1.05 billion traded at the same point Friday.
The Russell 2000 index, a barometer of smaller company stocks, rose 1.44, or 0.4 percent, to 384.48.
Overseas, Japan's Nikkei stock average finished 1.9 percent lower. In Europe, Germany's DAX index was up 0.8 percent, France's CAC-40 gained 1.5 percent, and Britain's FTSE 100 rose 0.6 percent.
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