NEW YORK, MAY 31 -- The Dow Jones industrial average slipped nearly 2 points today as institutional investors cashed in on profits from the recent run-up but hung back out of fear that perhaps the market rally had run out of steam.
Some observers attributed the market's hesitancy to cautionary tactics by traders and a general pullback by institutional investors pending the Labor Department's report of May employment levels, as well as the latest survey of the nation's purchasing managers. The reports, to be released Friday, will provide the first hard look at the May economy.
Profit-taking was clearly a strong factor today, traders said, motivated by a temptation to lock in gains from the 200-point May Dow.
Some technical traders said that while the Dow may still make a charge at the 3000 level, there remained troubling divergences not only between the Dow 30 industrials and broader market averages, but also between the industrials and their affiliated averages made up of key transportation and utility stocks.
The Dow closed today at 2876.66, down 1.90. Advances edged declines on the Big Board by 782 to 673 on volume of 165 million shares.
Among most-active stocks on the Big Board, two were particularly prominent movers on specific news.
Tonka Toys was down 3 points to 7 1/8 in the wake of an announcement that the company expects a significant loss because of lower sales in the second quarter.
Pfizer rose 2 1/4 to 65 7/8 on high volume after the Superior Court of Los Angeles denied the suit brought against it by the Washington-based consumer group Public Citizen, which had petitioned the court to require Pfizer to provide medical monitoring and psychological counseling for all the recipients of its allegedly defective Shiley heart-valve products.
Among the airlines, UAL was up 4 5/8 at 155 1/2 as speculators reacted positively about prospects for a new financing package for the long-awaited employee-led buyout. Cautious optimism prevailed in trading today after Chrysler heavy-hitter Gerald Greenwald agreed on Wednesday to take the helm for the proposed buyout. Greenwald met today with United Airlines union officials.
Among broad stock indexes, the Standard & Poor's 500 was up 0.37, at 361.23; the NYSE Composite, up 0.19 at 196.94; the Value Line, up 0.54 at 286.97; the Amex Market Value, up 0.15 at 363.06; and the Nasdaq Composite, up 0.20 at 458.97.