Investors lock in profits, sending stocks down on economic data

NEW YORK -- Investors apparently had their fill of Federal Reserve chairman Alan Greenspan's continued upbeat congressional testimony Thursday, using the latest round of disappointing economic data as an excuse to gather profits and send stocks lower.

First-time unemployment claims for the first full week of February were at 363,000, more than the 345,000 expected by Wall Street and 6,000 higher than the previous week.

Greenspan spent a second day on Capitol Hill, this time before a Senate committee. He continued the themes from Wednesday's House testimony -- better-than-expected gross domestic product growth, a lowered inflation estimate for the year and a warning against mounting federal budget deficits. His outlook sent stocks sharply higher on Wednesday.

Investors were also continuing to weigh Comcast Corp.'s hostile takeover bid for The Walt Disney Co. Comcast was down $1.17 at $30.06, while Disney gained 40 cents to $28.00.

"Speaking broadly, more mergers can be a comforting indicator from an investor's perspective," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. "It shows that companies are comfortable with their own operations, their own management and their own finances."

Trading of ImClone Systems Inc. was halted on the Nasdaq Stock Market Thursday afternoon just before the Food and Drug Administration approved the company's colon cancer drug, Erbitux. The last ImClone trade before the halt was at $34.00, down $9.10, after the stock had been trading narrowly between $42 and $44 for most of the day.

The halt, issued due to the pending news, was extended through the close of trade. The stock reopened for after-hours trading at 4:20 p.m., and shares immediately climbed back to $43.76. The SEC and Nasdaq are investigating the discrepancy, according to a Nasdaq spokeswoman, who called the inquiry "customary" whenever a stock is halted.

The FDA declined the original application for Erbitux in 2001, which prompted a stock trading scandal that led company co-founder Sam Waksal to plead guilty and to federal charges against domestic entrepreneur Martha Stewart.

Bristol-Myers Squibb Co., ImClone's distribution partner for Erbitux, fell 14 cents to $29.89.

Prescription benefit manager Medco Health Solutions Inc., a former Merck & Co. subsidiary, slid $1.94 to $36.05 despite beating analysts' fourth-quarter earnings estimates by 2 cents per share.

Health insurer Aetna Inc. climbed $3.20 to $74.80, its highest level in 4 1/2 years, after doubling its fourth-quarter profit from a year ago and boosting its 2004 outlook.

Whole Foods Market Inc., the boutique grocery chain, gained $1.55 to $74.85 after posting a 51 percent increase in quarterly profit, beating estimates by 3 cents a share.

AT&T Wireless Services rose 17 cents to $11.67 as takeover rumors continued to swirl, with Vodafone and Cingular Wireless considered the two top candidates to buy the company.

Declining issues outnumbered advancers 5 to 3 on the New York Stock Exchange, where consolidated volume came to 1.91 billion shares, compared with 2.24 billion on Wednesday.

The Russell 2000 index of smaller companies was down 4.32, or 0.7 percent, at 592.75.

Overseas, Japan's Nikkei stock average rose 0.9 percent. In Europe, Britain's FTSE 100 finished 0.4 percent lower, France's CAC-40 closed up 0.1 percent, and Germany's DAX index ended flat.