Wall Street report: Tuesday close

INVESTORS took profits in the names behind the rapid run-up of the past two months. The Dow Jones Industrial Average, up 109 points on Monday, shed 75.08 points or 0.75% to 9,901.38. The Nasdaq Index, retreated 53.91 points or 2.8% to 1880.51 after rallying 32% in the past eight weeks.

'The market moved too far, too fast and suddenly became enamored with the possibility of rolling right through Dow 10,000 without enough positive economic data to sustain such a move,' said Alan Ackerman, chief market strategist of investment firm Fahnestock & Co.

But Abby Joseph Cohen, the widely-followed market guru at Goldman Sachs, called the market's two-month rally 'fully warranted' and predicted more gains. She said US markets could run up another 24% by the end of next year. 'The primary assumption is that economic and profit growth will resume by mid-year,' Cohen said in a note to clients.

The Conference Board, the New York-based research group, provided fodder for economists who maintain that the US economy is re-bounding. The Board's US Index of Leading Economic Indicators rose 0.3% in October, its first rise since July. The increase was stronger than expected after the Index recorded a recession-like drop of 0.5% in September.

Oil prices provided a negative factor. They jumped nearly 4% after some non-OPEC countries indicated they were in favor of cutting production to bolster prices, at 30-month lows on Monday. Falling energy costs have provided a boost to the US economy. ExxonMobil gained 95 cents or 2.6% to $37.96. BP's US shares rose $1.32 or 3% to $45.08.

A downbeat report from tractor maker Deere & Co., which uses the ad slogan 'nothing runs like a Deere,' weighed on the industrial sector. Deere said it lost $320m (£213m) in the latest quarter, its biggest loss in a decade. Shares in Deere dropped $2.82 or 6.8% to $38.75. Heavy equipment maker Caterpillar shed 81 cents or 1.6% to $49.20. Alcoa, which announced job cuts on Monday, fell 65 cents or 1.7% to $38.84.

Techs lost ground as chip makers weakened after their strong run. Intel gave up $1.04 or 3.4% to $29.95. Advanced Micro Devices dipped 46 cents or 3.4% to $13.19. Microsoft surrendered an early gain to close down $1.14 or 1.7% to $65.40. Hewlett-Packard, a component of the Dow, slipped 60 cents or 2.8% to $20.95.

A planned merger between Royal Caribbean Cruises and P&O Princess sparked talk that another bidder might emerge for one or both of the companies. The combination of Royal Caribbean and P&O would create the world's biggest cruise line company. Royal Caribbean shares leapt $1.09 or 7.3% to $16.18.

Toys R Us, the big toy retailer, tumbled $1.61 or 6.8% to $22.01 on a broker downgrade.