Stocks Decline for a Third Day
Investors worried about a drawn-out war with Iraq sent stocks lower for the third straight day Friday, snapping Wall Street’s streak of two consecutive weekly gains.
“It’s obviously going to be a longer and bloodier conflict than many people had been thinking a week earlier,” said Tom Girard, portfolio manager at New York-based Robeco USA. “The euphoria of the first four days of the war has evaporated.”
On the economic front, fresh data showed continued sluggishness, giving traders another rationale for selling.
The Dow Jones industrial average slipped 55.68 points, or 0.7%, to 8,145.77; the broader Standard & Poor’s 500 index dropped 5.02 points, or 0.6%, to 863.50; and the technology-heavy Nasdaq composite shed 14.65 points, or 1.1%, to 1,369.60.
Still, analysts noted that volume was light and that advancers outnumbered decliners on the New York Stock Exchange. Seven stocks rose for every six that fell on the NYSE, while 11 declined for every 10 that rose on Nasdaq.
For the week, the Dow lost 4.4%, the S&P; slid 3.6% and Nasdaq dropped 3.7%.
The Commerce Department reported Friday that consumer spending was flat for a second straight month in February as people clamped down amid job and war worries and higher energy prices. The government also said incomes rose by a modest 0.3%, down from a 0.4% advance the previous month.
Meanwhile, the University of Michigan’s consumer sentiment index for March fell to 77.6 from 79.9.
“The economic recovery has definitely stalled,” said Rod Smyth, chief investment strategist at Wachovia Securities in Richmond, Va.
Treasury yields fell and gold prices rose as some investors sought safety in fixed income and precious metals. The yield on the benchmark 10-year T-note dropped to 3.90% from 3.92% on Thursday, while gold climbed $3.10 an ounce to $331.50.
In currency trading, the dollar fell against the Japanese yen and the euro.
In New York trading, oil prices slipped 21 cents to $31.16, but still notched their biggest weekly gain since April 2002.
The war and the economy could take a toll on investors again next week, Girard said.
“Some of the most difficult stages of the Iraq operation are staring us in the face,” he said. “There is a feeling that the use of chemical weapons is a distinct possibility during the invasion of Baghdad.”
Next week’s key economic data could show more sluggishness, he said.
A March manufacturing report due Tuesday probably will show contraction, Girard said, while the Labor Department’s monthly jobs report on Friday is expected to show a slight rise in unemployment.
In other highlights:
* ImClone Systems rose 98 cents to $18.36 after its licensee said it expects the cancer drug Erbitux to be on the market in Europe by next year.
* Lucent Technologies rose 2 cents to $1.50 the day after it said it agreed to a $568-million settlement of all shareholder lawsuits accusing the company of violating securities laws.
* The week’s trend of higher oil prices gave some energy-related stocks a boost, including ConocoPhilips, up 94 cents to $53.59, and Schlumberger, up 62 cents to $39.03.
Market Roundup, C4-5