Wall St. War Jitters Outweigh Positive Economic Reports
War fears overshadowed encouraging economic reports Thursday on Wall Street, sending stock prices lower for a third consecutive day. The Dow Jones industrials fell to their lowest level in nearly six weeks.
Analysts said trading was choppy as investors struggled to decide whether to buy on bets of stronger prospects in 2003. But the escalating rhetoric on Iraq ultimately gave them another reason to sell, they said.
“They’re worried quite a bit about a war, and they’re still worried about corporate profits and economic factors going forward,” said Mark Donahoe, managing director at US Bancorp Piper Jaffray in Minneapolis.
War jitters also helped gold and oil prices continue their recent rally.
The Dow average fell 82.55 points, or 1%, to close at 8,364.80 for a three-day loss of 262 points. It was the lowest finish since Nov. 11.
The Nasdaq composite index lost 7.41 points, or 0.5%, to 1,354.10 and the Standard & Poor’s 500 index dropped 6.87 points, or 0.8%, to 884.25.
It wasn’t a broad retreat. Losers outnumbering winners by slim 6 to 5 margin on the New York Stock Exchange and Nasdaq in slow trading.
Chief U.N. weapons inspector Hans Blix told the Security Council that Iraq’s 12,000-page weapons declaration contains gaps and inconsistencies. The United States called Iraq in “material breach” of U.N. resolutions, setting a course toward a possible war early next year.
Investors, meanwhile, largely shrugged off reports showing modest improvements in the economy.
The Labor Department reported Thursday that new claims for unemployment benefits dropped last week by a seasonally adjusted 11,000 to 433,000.
The Conference Board said Thursday that its index of leading economic indicators rose 0.7% in November, the largest monthly gain in a year.
Analysts say investors in recent days have been uncertain whether to commit to stocks on hopes of a strengthening economy or cash in quick profits from an eight-week blue-chip rally in the autumn. Indeed, many analysts are questioning whether Wall Street will see its traditional holiday rally in the last two weeks of this month.
Oil futures in New York surged as high as $31.10 a barrel Thursday, then fell back to end up 12 cents at $30.56.
Near-term gold futures rose $3.70 to $345.90 an ounce in New York. The metal has gained 9.2% since Nov. 27 as some investors have sought a safe haven.
Treasury yields continued their recent slide, also reflecting a search for safety. The yield on the benchmark 10-year Treasury note fell to 3.94% from Wednesday’s close of 4.04%.
In other highlights:
* The Dow was clipped by AT&T;, which fell $1.20 to $25.11; Eastman Kodak, off $1.22 to $35.95; and Procter & Gamble, down $1.67 to $85.70.
* Oracle rose 37 cents to $11 after the business software maker reported earnings that beat analysts’ expectations.
* Dole Foods jumped $4.13 to $32.58 after its chairman, David Murdock, agreed to buy all of the Westlake Village-based food company’s outstanding shares that he doesn’t own and take it private in a $2.5-billion deal.
* Shares of San Francisco-based UnionBanCal dipped $1.14 to $39.86. The parent of Union Bank of California said it is buying San Diego-based John Burnham & Co., a closely held commercial insurance broker.
Market Roundup, C15-16
