Stocks Are Mixed on Concern About Citigroup, Iraq
Stocks ended mixed Wednesday as downbeat news about financial services giant Citigroup put pressure on blue chips and traders debated the significance of Iraq’s decision to accept a U.N. resolution to disarm.
“The shorter-term implication of Iraq is weighing on people’s minds. How will it affect the Christmas season? How many are fearful there will be domestic retaliation here?” said Ned Riley, chief investment strategist at State Street Global Advisors.
The news also roiled commodity markets, where oil and gas prices fell sharply.
On Wall Street, the Dow Jones industrial average rose 12.49 points, or 0.2%, to 8,398.49, after earlier rising 107 points.
The technology-laced Nasdaq composite index gained 11.78 points, or 0.9%, to 1,361.34. But the broader Standard & Poor’s 500 index ended down a fraction of a point, or 0.1%, at 882.53.
Losers outnumbered winners by 10 to 9 on the New York Stock Exchange. They were about even on Nasdaq. Trading was moderate.
Dow component Citigroup slumped $1.39 to $35 and was the most active stock on the Big Board as the bank again was embroiled in questions about whether its chief executive influenced stock market research.
“It doesn’t help investors’ confidence, and it’s a huge company that weighs on all the major averages,” said David Memmott, head of listed block trading at Morgan Stanley.
Stocks were helped early in the session by Federal Reserve Chairman Alan Greenspan’s hopeful words about the economy in testimony before Congress.
Greenspan said the economy doesn’t appear to have the usual weaknesses that presage slumps.
Traders, however, said the reverberations of Greenspan’s remarks in the market were short-lived.
“Greenspan spoke but was kind of anticlimactic,” said Memmott. “There was not a whole lot he could say except basically that he’s got his eye on the economy.”
In energy markets, crude oil futures ended sharply lower after hitting their lowest level in five months Wednesday on Iraq’s unconditional acceptance of the U.N. Security Council resolution.
Oil fell 71 cents a barrel to $25.19 in New York trading -- its lowest close since June. Oil and gas shares fell in tandem. The S&P; index of energy stocks slipped 2% and was the worst-performing industry group in the S&P; 500.
Gold, a traditional safe haven during times of international tension, also fell sharply, losing $5.80 an ounce to $318.70.
In other highlights:
* Defense shares fell as the prospect of war dimmed. Lockheed Martin, the biggest military contractor, fell $1.30 to $53.23. General Dynamics declined $1.07 to $78.99. Northrop Grumman slid $4.01 to $93.27.
* Sears dragged on the broader market, falling $1.70, or 7.5%, to $21 after an analyst downgrade rekindled concern that the company may suffer a prolonged slump in profit and sales growth. Sears hit a 20-year low of $19.75 early in the session.
* Drug giants Schering-Plough and Merck weighed on pharmaceutical stocks. Schering-Plough fell 87 cents to $20.66 after saying it received two grand jury subpoenas from federal investigators in Massachusetts related to its clinical trial, sales and marketing practices. Merck ended down $2.02 at $52.80 after disclosing late in the session that the Justice Department is probing its marketing practices as part of a larger investigation into pharmaceutical companies.
* Wal-Mart Stores rose $1.13 to $54.98. The world’s largest retailer said third-quarter profit rose 23% as apparel sales climbed. Its net income of 41 cents a share beat analysts’ estimates by a penny.
* Playtex Products gained $1.61 to $10.81 after the maker of personal-care products said it is looking at ways to boost shareholder value, including the possible sale of the company.
Market Roundup, C6-7
