Stocks Fall Amid Renewed War Fears, Profit Taking
Renewed war fears helped send stocks lower Wednesday after two days of gains as trading volume remained thin.
In other markets, crude oil rose above $37 a barrel, gold rebounded and the dollar fell.
On Wall Street, share prices turned lower at the outset, unable to sustain the rally that lifted the Dow Jones industrial average 290 points over the previous two sessions.
The Dow was off as much as 106 points before buyers sparked a rally late in the day. The index ended with a loss of 40.55 points, or 0.5%, at 8,000.60. It is down 4.1% this year.
The Nasdaq composite fell 12.22 points, or 0.9%, to 1,334.32.
Declining stocks outnumbered winners by about 5 to 3 on the New York Stock Exchange and Nasdaq.
Analysts said the market’s inability to advance for three straight sessions showed that many investors were quick to take profits, fearful of being caught by a turn for the worse in the U.S.-Iraq standoff or by another terrorist attack.
“Right now there are so many crosscurrents, I don’t have confidence” to invest, David Briggs, head equity trader at Federated Investors in Pittsburgh, told Bloomberg News.
But the declining trading volume of recent weeks also suggests there is no huge rush for the exits. Volume this week has been further restrained by the East Coast snowstorm, which has limited many market players’ ability to get to work.
European markets set a poor tone for Wall Street on Wednesday, falling sharply after rallying since Friday. The German market sank 4.2%, and the Swiss market lost 2.7%.
War jitters were evident in commodities trading. Near-term crude oil futures in New York added 20 cents to hit $37.16 a barrel, a 29-month high, as the U.S. continued to push the United Nations Security Council for a resolution authorizing the use of force to disarm Iraq.
Natural gas futures gained 3.8% to the highest level in more than two years amid concern that colder-than-normal Midwest and Eastern weather would shrink U.S. supplies already down 37% over the last year.
Gold also rose, with near-term futures gaining $5.70 to $349.90 an ounce in New York. The price had tumbled last week as war worries eased. Gold’s rebound came as the dollar fell against the euro after three days of gains.
In the bond market, Treasury yields dipped as some investors again sought the securities as a haven. The 10-year T-note yield ended at 3.88%, down from 3.95% on Tuesday.
Expecting to reach the national debt ceiling of $6.4 trillion today, the government took steps Wednesday to allow federal borrowing to continue while Congress considers raising the limit. The Treasury said it would tap a federal workers’ retirement fund as a stopgap measure.
Among Wednesday’s market highlights:
* Shares of major local phone companies slid after The Times reported that the Federal Communications Commission probably would decide against faster telecom industry deregulation in a vote today. Verizon Communications dropped $1.30 to $36.60, BellSouth was off 90 cents to $22.14, and SBC Communications lost 66 cents to $23.03.
AT&T; gained 82 cents to $18.57. It could benefit from the expected decision.
* Lucent Technologies eased 2 cents to $1.77. The telecom equipment maker named Chief Executive Patricia Russo chairwoman, replacing Henry Schacht, who had planned to retire. Lucent also said shareholders authorized a reverse stock split to avoid delisting by the NYSE, but the board has a year to decide on the split.
* Some semiconductor stocks rallied after brokerage Morgan Stanley upgraded its rating of the sector to “attractive.” Intel added 9 cents to $16.80, and Texas Instruments rose 17 cents to $16.41.
Market Roundup, C5-6
