NEW YORK, Jan 19: A pounding for stocks over the past week left Wall Street with a long weekend to ponder whether the promised recovery was indeed on the way, and whether it is strong enough to help ailing US companies.

The Dow Jones industrial average fell 2.15 per cent to 9,771.85 and the tech-heavy Nasdaq slid 4.55 per cent to close the week at 1,930.34.

The broader Standard and Poor’s 500 index slipped 1.57 per cent to 1,127.58.

Markets were to be closed Monday for the Martin Luther King, Jr. holiday Monday, but on Tuesday traders will get another batch of corporate earnings reports, along with the outlook from corporate chieftains for the coming months.

Although most of the economic data released over the past few weeks has been positive, analysts question whether it is strong enough to justify the run up in stocks since late September.

The stock market’s sharp run-up last year now needs validation from this year’s profit performance, said Lynn Reaser of Banc of America Capital Management. Earnings guidance from various companies will therefore be pivotal.

Traders will be poring over the earnings reports in the coming week from financial services firms such as Bank of America and Merrill Lynch, pharmaceutical firms including Pfizer, Eli Lilly and Merck, as well as other blue chips such as Boeing, DuPont and Lockheed Martin.

Hugh Johnson, chief investment officer at First Albany, said the tech sector is particularly vulnerable after a sharp rise over the past few months.

Tech stocks have had some big gains since September 21, but they need a sign of a big economic recovery to stay at those levels, he said. “But the comments from IBM and Microsoft are not encouraging. Stocks will obviously need to pull back a little more.

Investors will also be keenly awaiting comments before Congress Thursday from Federal Reserve chairman Alan Greenspan, whose cautious remarks earlier this month cast a cloud over the market.

Ralph Acampora of Prudential Securities predicted choppy trading in the near future.

Among active issues over the past week, Intel slid 3.10 per cent for the week to end at 33.48, Microsoft shed 3.66 per cent to 66.10, IBM lost 5.04 per cent to 114.25 and Sun Microsystems tumbled 9.01 per cent to 12.12.

On the bond market, with the yield on the 10-year Treasury bond edged up to 4.880 per cent from 4.860 per cent a week earlier and on the 30-year bond eased to 5.353 per cent from 5.364 per cent. Bond yields and prices move in opposite directions.—AFP