Wall Street: Thursday close

PROFIT warnings stemmed a rally sparked by new figures showing the giant US economy bouncing back more strongly than expected.

Markets faded for the the second straight day, with the Dow Jones Industrial Average, up 110 points early, closing down 21.45 points or 0.21% to 10,106.13. The Nasdaq surrendered a 20-point advance to finish off 20.36 points or 1.16% to 1,731.52. February proved the worst month since September for the Nasdaq, dropping 10%. The Dow added 1.9% on the month.

A strong early rally came on the heels of new data showing the US economy growing at a much faster than forecast 1.4% in the fourth quarter of last year. The growth rate, the highest in a year, took economists by surprise. A six% surge in consumer spending, in part to take advantage of car discounts, and the highest Government spending in a decade and a half contributed to the rebound.

Helping also were figures from the National Association of Purchasing Management in Chicago as its index indicated growth in the hard-hit manufacturing sector for the first time in 19 months.

But steam was taken out of the run-up as several companies warned that they faced a difficult time meeting profit and sales expectations in a challenging environment. Gateway, locked in a battle with Dell and Compaq for PC sales, slumped 50 cents or 10% to $4.60.

American Airlines parent AMR fell 96 cents or 3.6% to $26.10. Networking company Riverstone plunged $3.77 or 50% to $3.82. Upscale jeweller Tiffany's lost $2.22 or 6.3% to $32.81. Discount store chain Target dipped $2 or 4.6% to $41.90.

Dish satellite TV owner Echostar stood out with a rise of $2.52 or 10.7% to $26.12 after it topped profit forecasts. A broker upgrade lifted online auctioneer eBay $2.94 or 6% to $52.05.

Media shares were mixed with MTV owner Viacom higher by 38 cents or 0.8% to $46.69 on a broker upgrade and Walt Disney down $1.25 or 5.2% to $23. AOL Time Warner climbed $1.05 or 4.4% to $24.80.

Dow components on the rise included American Express up 68 cents or 1.9% to $36.45, General Electric down 25 cents or 0.3% to $38.50 and Citigroup ahead $1.01 or 2.3% to $45.25.