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Analysts say up-and-down movement of stock exchange bodes badly for a recovery 

NEW YORK — If this past week’s trading is any indication, a solid, lasting stock market recovery isn’t likely anytime soon. Wall Street is mired in what analysts call range trading — when a lot of volatility leads to no substantial change in the major market indexes. 

In range trading, “you just have a series of short-term moves up or down,” said Richard Dickson, a technical analyst with Scott & Stringfellow. 

Most analysts agree that the Dow Jones industrials and Standard & Poor 500 indexes have been stuck in a range for more than a year. 

The Dow has largely traded between 10,000 and 11,000 since May 1999, although it did move as high as 11,722 more than a year ago. The S&P stood at about 1,250 two years ago, not too far from its current level. 

There’s less consensus about the technology-dominated Nasdaq composite index, which has recovered from its 52-week low but is still vulnerable to significant drops. 

“As far as the Nasdaq, you continue to be in a brutal bear market. I think the action this week dispelled the notion that the downturn would be over anytime soon,” said Gary Kaltbaum, a technical analyst at JW Genesis. “If the Nasdaq doesn’t pull its bootstraps up at the levels its trading at now, I think there could be another leg down.” 

Several trends in the market might be contributing to the lack of sustainable advances or declines by many stocks. 

“This is really an indication of indecision on the part of investors. Neither buyers or sellers can take control of this market,” Dickson, the Scott & Stringfellow analyst, said. 

Lower corporate earnings and concern over the Federal Reserve’s ability and willingness to stimulate economic growth are helping to entrench the market. The Fed has lowered interest rates twice since the new year and recently indicated another cut is likely, although it might be smaller than Wall Street wants. 

“It is going to take some sort of catalyst to get investors off the sidelines and into the market,” said Arthur Hogan, chief market analyst at Jefferies & Co. “Signs that the economy is turning around would be one catalyst. So would earnings that are a bit more robust.” 

Other possible incentives for investors could be a retroactive tax cut and a significant improvement in consumer confidence, he said. 

But this past week’s announcements from Nortel Networks and Hewlett-Packard suggesting that results for all of 2001 will be disappointing has Hogan less confident that the market will hear enough good news for a rally that lasts. 

Indeed, most analysts agree a full breakaway from range trading this year is unlikely, although some sectors such as energy and consumer staples might do better than others. 

“While the Dow and S&P will move up this year, they probably will not break out of the range we’ve seen the last two years,” said Marshall Acuff, equity strategist at Salomon Smith Barney. “The Nasdaq I don’t even see coming close to its high of 5,000.” 

Dickson, the Scott & Stringfellow analyst, recommends investors base stock buys on sector performance and operate on the expectation that they might have to unload stocks after a few years, rather than a longer period, as different sectors rally and fall. 

But, he said, “It’s the $64,000 question. Everyone wants to know what’s next and we don’t know.” 

For the week, the Dow gained 18.37, a 0.2 percent advance, to 10,799.82 after a 91.20 point loss Friday. 

Broader market indexes were down on the week. The Nasdaq composite index lost 45.59, or 1.8 percent, closing at 2,425.38 after falling 127.53 Friday. 

The Standard & Poor’s 500 index ended the week off 13.23, or 1.0 percent, at 1,301.53 after Friday’s loss of 25.08. 

The Russell 2000 index, which tracks the performance of smaller company stocks, rose 2.23, or 0.4 percent, for the week after losing 9.57 on Friday. It closed at 499.28. 

The Wilshire Associates Equity Index — which represents the combined market value of all New York Stock Exchange, American Stock Exchange and Nasdaq issues — ended the week at $12.029 trillion, off $95 billion from the previous week. A year ago the index stood at $13.386 trillion.