Wall Street report: Monday close

MARKETS closed mixed on second thoughts about how far shares have risen in the six months since the 11 September terror attacks and worries that higher oil prices could flow from expanding military action.

The Dow Jones Industrial Average, up 10.5% since the attacks, rose 38.75 points or 0.37% to 10,611.24 in subdued trading on the six-month anniversary of the destruction of the twin towers of the World Trade Centre. The Nasdaq Index edged lower by 0.18 points to 1,929.49, up 13.8% from September lows.

Holding sentiment in check were cautions from several quarters that the post-attack rally had discounted a big rebound in profits. Bank of America Securities strategist Thomas McManus lowered his weighting for the S&P 500 Index to 50% from 55% and increased the portion of his portfolio in bonds from 40% to 45%.

'We suggest that equity investors remain patient and look for more rewarding entry points into the market,' he said. 'This is not the dawn of a new bull market. It is the extension of an old one,' he said in a research note.

Widely admired investor Warren Buffett, in his annual report as chairman of diversified investment firm Berkshire Hathaway, warned investors not to expect the scintillating market performance of recent years. Calling his own investment performance over the past year 'poor,' Buffett said that share market returns in the next few years could prove 'disappointing' to investors.

'Our restrained enthusiasm for these securities is matched by decidedly lukewarm feelings about the prospects for stocks in general over the next decade or so,' Buffett said in his annual letter to shareholders. 'Today's equity prices presage only moderate returns for investors.' Berkshire Hathaway shares fell $200 or 0.28% to $71,600, their lofty price reflecting Buffett's disinclination to split shares.

American Express, one of Buffett's favorite stocks, surged $1.08 or 2.7% to $41.55 on a broker upgrade. Coca-Cola, which has underperformed in recent years despite Buffett's enthusiam for Cherry Coke, was fractionally lower at $47.58. Gillette, another of his major holdings, was steady at $32.87.

One investor showing a more bullish hand was Saudi Prince Alwaleed, who said he had sunk an additional $1bn. into Citigroup, AOL Time Warner and Priceline.com in the past six months. The news helped Priceline.com gain 39 cents or 7.9% to $5.35, Citigroup was ahead slightly in a strong banking sector and AOL firmed 83 cents or 2.1% to $27.21.

Oil shares were firmer on speculation that a widely anticipated assault on Iraq would boost petroleum prices. ExxonMobil led the pack, rising 58 cents or 1.4% to $43.49.

IBM managed to hold its ground at $105.24 even as one analyst reduced his profit targets.Other techs moving included Intel, off 75 cents or 2.2% to $33.42, Microsoft, higher by 39 cents or 0.6% to $64.34, and Compaq, slipping 53 cents or 4.5% to $11.27 after the California public employee's pension fund said it would vote against the PC maker's proposed merger with Hewlett- Packard. H-P shares rose 39 cents or 1.9% to $20.98.

Telecom Qwest Comunications dropped 25 cents or 2.6% to $9.46 after it confirmed that the Securities and Exchange Commission had posed questions about its sales figures.