Iraq Worries Send Stocks Mostly Lower
Stocks closed mostly lower Thursday as some investors pulled away before the long holiday weekend.
Escalating violence in Iraq and another jump in oil prices weighed on investor sentiment, analysts said.
The market rallied briefly at the opening on some upbeat corporate earnings reports, then drifted down the rest of the day.
Wall Street will be shuttered today in observance of Good Friday. Trading resumes Monday.
“The market is now in a duel between good economic numbers, good earnings and the situation in Iraq,” said Peter Cardillo, chief strategist at S.W. Bach & Co.
The Dow Jones industrial average lost 38.12 points, or 0.4%, to 10,442.03, pushing it back into the red for the year to date, with a loss of 0.1%. The index was up as much as 74 points in the first few minutes of trading.
The Standard & Poor’s 500 index eased 1.21 points, or 0.1%, to 1,139.32.
The Nasdaq composite index bucked the trend, helped by strength in some Internet issues, particularly Yahoo. The index inched up 2.64 points, or 0.1%, to 2,052.88, though it had been up 25 points early in the session.
For the week, the Dow lost 0.3% and the S&P; 500 and Nasdaq both slipped 0.2%.
Generally strong first-quarter earnings reports have underpinned the market in recent days. General Electric said early Thursday that it earned 32 cents a share in the quarter, matching expectations. The company also sounded upbeat about the rest of the year.
GE shares rose as high as $31.85 at the start of trading but closed up just 1 cent, at $31.41.
Yahoo, which late Wednesday reported sharply higher quarterly results, soared $7.86, or 16.3%, to $56.21 on Thursday, a three-year high. The stock is up 25% since the start of the year.
There was more good economic news: The government said new claims for unemployment benefits dropped last week to the lowest level in more than three years.
Yet falling stocks outnumbered winners by 5 to 3 on the New York Stock Exchange and by 8 to 7 on Nasdaq on Thursday.
The market could have fared much better except for the continued fighting in Iraq, some analysts said.
“The problem is the perception about what’s going to happen in Iraq,” Barry Savitz, a trader at Greenwich Prime Trading in Connecticut, told Bloomberg News. “It’s a long weekend, there’s a war going on, so there’s a lot of uncertainty.”
Fear of higher energy prices also depressed the mood. Crude oil futures in New York jumped 99 cents to $37.14 a barrel, nearing the 13-year high of $38.18 reached March 17. Oil was up $2.75 a barrel for the week, fueled by a government report showing that U.S. crude inventories dipped unexpectedly last week.
In the bond market, Treasury yields were up modestly on the unemployment claims report. Strong data raise fears that the Federal Reserve could begin to tighten credit soon.
The 10-year T-note yield ended at 4.19%, up from 4.15% on Wednesday. The yield, which was 3.68% on March 16, has jumped as economic reports have improved.
Next week will bring a deluge of earnings reports, but the Iraq situation could continue to overshadow better profit results, some analysts warn.
Among Thursday’s market highlights:
* Internet-related shares rising with Yahoo included EBay, up $2.04 to $75.94; Amazon.com, up $2.25 to $48.10; Ask Jeeves, up $1.97 to $40.05; and InfoSpace, up $5.44 to $45.26.
* Dell added 81 cents to $35.63, its highest level since mid-January, after the computer maker said demand from corporate buyers had been better than expected.
Dell’s and Yahoo’s upbeat announcements have damped worries about the tech sector sparked this week when cellphone giant Nokia said first-quarter results would be below estimates. Nokia added 18 cents to $17.10 after tumbling a total of $4.23 the previous two sessions.
* Biotechnology leader Genentech jumped $3.55 to $112 after the firm reported strong earnings Wednesday.
* Verizon Communications, Pfizer and American International Group all were little changed as they were added to the 30-stock Dow index. The shift was announced a week ago.
Verizon was unchanged at $37.31, Pfizer lost 7 cents to $35.60 and AIG added 2 cents to $76.27.
The three stocks they replaced all fell: AT&T; dropped 29 cents to $19.23, Eastman Kodak lost 5 cents to $25.44 and International Paper was down 39 cents to $42.01.
* Energy stocks were mostly higher with crude oil. EOG Resources rose $1.06 to $47.07, Todco added 35 cents to $14.85 and Occidental Petroleum gained 50 cents to $46.65, a record high.
* Real estate investment trust shares turned down again after rebounding Wednesday from three days of losses. Mack Cali fell 97 cents to $39.87, Simon Property lost $1.10 to $52.90 and Mills slid $2.22 to $45.30.
* Japan’s Nikkei 225 index continued its winning streak, rising 72.97 points, or 0.6%, to 12,092.59, a 32-month high.
