DOW FAILS TO FINISH 10K RUN Market retreats, posts loss after reaching benchmark

The Dow Jones industrials broke through the 10,000 barrier for allof one minute Tuesday, reaching a significant milestone in WallStreet's remarkable recovery from the bear market before retreatingon profit-taking.

But when the cheering ended, the Dow had shed nearly 42 points.

At the opening bell Tuesday, prices moved higher as investorspicked up shares on anticipation the Federal Reserve will keepinterest rates low for some time. But by the time the Fed issued itsdecision in the afternoon to leave rates unchanged, investors werelooking to lock in some gains, analysts said.

The index of 30 blue chip stocks moved past its milestone shortlyafter trading began. It was the first time since May 31, 2002, thatthe Dow had been above 10,000 and marked a solid comeback from thefive-year low of 7,286.27 on Oct. 9, 2002.

A cheer went up on the floor of the New York Stock Exchange togreet the Dow's achievement Tuesday, an expression of traders' reliefthat Wall Street has maintained its upward path. Last week, theNasdaq composite index crossed 2,000 for the first time in nearly twoyears.

"This rally is coincident with the fact the market had a stellarperformance this year, because it correctly predicted the recovery inthe economy," said Joseph V. Battipaglia, chief investment officer atRyan Beck & Co.

The Dow pushed up 37.85 to hit 10,003.12 before pulling back andclosing at 9,923.42, down 41.85, or 0.4 percent. In the previoussession, the blue chip average climbed 102.59.

The broader market also finished lower. The Nasdaq fell 40.53, or2.1 percent, at 1,908.32. The Standard & Poor's 500 index declined9.12, or 0.9 percent, to 1,060.18.

As expected, the Fed voted to keep short-term interest rates at a45-year low. In its statement, the Fed said it believes rates couldbe maintained "for a considerable period," allaying investor concernsabout a rate hike in the near future.

Stocks have pushed higher in recent weeks on investor expectationsfor a stronger economy. But analysts wonder if the market might bedue for some pullbacks or sideways trading, citing somewhat highshare valuations.

"What would be more significant is if we move from these levels tomeaningfully higher ground -- 3 to 5 percent over the next severalmonths," Battipaglia said. "If we indeed go there, Dow 10,000 will bea very happy moment in time."

Peter Cardillo, president and chief strategist of Global PartnerSecurities Inc., said the 10,000 level might represent a milestonethat investors remain hesitant to push past on a longer-term basis.

"One reason why the market is not reacting positively to the Feddecision is mostly technical," he said. "We had a brief passing ofthe 10,000 level, but the fact it didn't hold basically suggeststhere is still psychological resistance."

The Russell 2000 index, a barometer of smaller company stocks,fell 8.50, or 1.6 percent, to 534.54.

AP