A Little Optimism on Iraq Buoys Stocks
Stocks pushed modestly higher Monday, snapping a four-day string of losses on news that Iraq approved a United Nations demand for surveillance flights.
Gold, which had soared in recent months on war concerns, fell for a fourth session as some speculators fled, analysts said.
Trading on Wall Street was light and choppy as many investors remained sidelined by the U.S.-Iraq battle of words.
But the Dow Jones industrial average pulled up from morning losses to finish with a gain of 55.88 points, or 0.7%, at 7,920.11.
The index had tumbled 245 points over the previous four sessions, extending its decline to four straight weeks as it ended Friday at its lowest level since Oct. 10.
The Nasdaq composite index Monday gained 14.21 points, or 1.1%, to 1,296.68.
Winners topped losers by 18 to 14 on the New York Stock Exchange and by 18 to 15 on Nasdaq.
Iraq’s U.N. ambassador, Mohammed Douri, said his country sent a letter to the United Nations accepting U-2 surveillance flights. Iraq also pledged to pass legislation next week outlawing the use of weapons of mass destruction.
The news seemed to give some investors hope that a U.S. invasion might not be imminent.
But White House spokesman Scott McClellan scoffed at the Iraqi concessions, saying, “The bottom line is the president is interested in disarmament. This does nothing to change that.”
Some investors were avoiding major commitments as they awaited Federal Reserve Chairman Alan Greenspan’s comments to Congress today and Wednesday about the economy, analysts said.
But action in other markets suggested that war fears might be ebbing somewhat.
Gold futures prices slid $6.20 to $363.70 an ounce in New York, the lowest since Jan. 22. The metal peaked at $379 last week.
Oil also lost ground, with near-term futures dropping 64 cents to $34.48 a barrel in New York.
The dollar showed some strength: The euro fell to $1.075 from $1.083 Friday, and the buck hit a seven-week high against the yen, at 121.15 yen in New York.
“War jitters have diminished a bit -- enough to have some dollar-buying across the board,” said Vincent Palazzolo, chief currency trader at Sumitomo Mitsui Banking Corp.
Banc of America Securities Strategist Tom McManus advised clients Monday to raise stock assets to 75% of their total portfolios, from 70%, saying that a positive surprise could spark a “sharp reversal” in prices. He cut his recommended bond weighting to 15% from 20%, and kept his cash weighting at 10%.
Among Monday’s highlights:
* Gold mining stocks fell with the metal. ASA lost $2.35 to $37.70, Agnico Eagle slid 73 cents to $13.20 and Newmont Mining was off 78 cents to $27.64.
* Home builders attracted buyers. Pulte Homes gained $1.85 to $50.21 and Centex jumped $1.76 to $53.83.
* Energy-related stocks rallied even as oil prices pulled back. Exxon Mobil was up 26 cents to $33.61, ChevronTexaco rose $1.22 to $64.94 and Schlumberger gained $1.54 to $39.06.
* United Technologies rose 31 cents to $63.98 after the industrial and defense conglomerate affirmed its 2003 earnings estimates. Other defense stocks also rose. Alliant Techsystems gained 91 cents to $49.85.
* Marriott International climbed $1.20 to $30.55 even though the company said 2003 results would lag behind analysts’ estimates. The hotel operator reported fourth-quarter operating earnings that were ahead of expectations.
Rival Hilton Hotels added 14 cents to $11.64.
* Abbott Labs fell 41 cents to $36.94. The company said its experimental treatment for prostate cancer failed in a study but that it will continue research on the medicine.
In foreign trading, European stock markets ended mostly lower. The British market eased 0.6% and the Dutch market fell 1.6%.
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Market Roundup, C6-7
