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Wall Street Preview: More Cautious Trading - 2001-10-22

Stock trading on Wall Street has been full of distractions related to terrorism since the September 11 attacks on New York and Washington. Trading last week was especially cautious and analysts expect more of the same.

The Dow Jones Industrial Average will start the week at 9,204 after dropping one and a half percent last week. The techweighted Nasdaq composite lost nearly two percent.

But Wall Street analysts say it could have been worse. Given all the anxiety investors are coping with, they say the fact that the markets gave back just a little to profit-taking is a positive sign that stocks are in a solid position to recover.

But when will that recovery begin? Most experts do not expect the markets to come roaring back before next year. Wall Street is dealing with a declining corporate earnings environment. A lot of the third-quarter results are in, and they do not look good. And many companies have warned about a bleak fourth quarter.

The markets lack conviction at this point. Investors are moving about with extraordinary caution.