Markets Await Cues From Moves on Iraq

Investors, heading into a week that will be dominated by rapid-fire headlines on the likelihood of a U.S. showdown with Iraq, are advised to take a deep breath and hold on tight.

“Iraq just means uncertainty -- and uncertainty adds to volatility,” said Barry Hurwitz, a senior trader at HSBC Securities.

The uncertainty plaguing Wall Street is one of the few things market watchers agree on as the world waits for a resolution to the diplomatic wrangling over Iraq. Stocks are expected to take their cue from each piece of news that offers a clue on how the crisis will end, leading to a market that could climb one minute and slump the next.

“We will be hostage to the headlines,” said Paul Cherney, a market analyst at S&P; Marketscope.

The rift dividing the world powers has roiled the stock market for weeks. Most analysts say they expect at least a short-term rally if the U.S. launches a strike against Iraq -- even if the nation wages war without global support.

“It’s just the clarity associated with it. Whether or not that’s what everyone favors or not is a side issue. It’s the fact that there will be definitive action taken,” said Jeff Kleintop, chief investment strategist at PNC Advisors.

More clues on the U.S. economy’s health will come from a report on housing starts Tuesday, data on weekly jobless claims Thursday and the release of the consumer price index for February and the Conference Board’s index of leading economic indicators Friday.