Closing Market Report

Star-Bulletin news services

Thursday, February 13, 2003

Stocks fall
on war jitters

By Amy Baldwin
Associated Press

NEW YORK >> Wall Street fell for the third straight day, its anxiety over war and terrorism deepening with the arrests of three people at airports in Britain.

The market had a late-day blip upward on bargain hunting that lifted the Dow Jones industrials from a deficit of 129 points. But the major indexes still finished with losses, an expected outcome amid the selling that has dominated Wall Street for weeks.

"War worries continue to be the overwhelming deterrent for investors," said Alan Ackerman, executive vice president at Fahnestock & Co.

Declining issues outnumbered advancers about 8 to 5 on the New York Stock Exchange, where trading was light.

The Dow closed down 8.30, or 0.1 percent, at 7,749.87. The blue chips dropped 161.94 in the previous two days. Thursday's decline was their seventh in eight sessions.

The broader market fell but also managed to stave off bigger losses. The Nasdaq composite index slipped 1.53, or 0.1 percent, to 1,277.44, recovering from an earlier deficit of 17.18. The Standard & Poor's 500 index declined 1.31, or 0.2 percent, to 817.37, having lost as much as 12.39 earlier. The Russell 2000 index fell 0.61, or 0.2 percent, to 354.77.

The price of the Treasury's 10-year note was up 15/32 point, while its yield fell to 3.85 percent from 3.91 percent late yesterday. Two-year Treasury notes were up 3/32 point and yielded 1.54 percent, down from 1.61 percent yesterday.

"There is still absolutely no reason to put money to work, to buy something," said Tony Cecin, head of institutional trading at US Bancorp Piper Jaffray in Minneapolis. "It is what I would call a buyers' strike. Until people get more clarity (on Iraq), there's no reason not to be on strike."

War jitters have been the driving force behind the market's slide in 2003, costing the Dow nearly 1,100 points since Jan. 14, when the blue chips stood at 8,842.62, their high for 2003.

So far this year, the Dow and S&P 500 have each dropped 7.1 percent, while the Nasdaq has lost 4.4 percent.

Fears of more terrorism have also been weighing heavy on Wall Street. Today's losses widened as British police arrested a man at London's Gatwick Airport with a grenade in his luggage, and two other suspects were taken into custody near Heathrow Airport, where troops have been on patrol after a terrorist threat.

On the economic front, the Commerce Department reported that retail sales fell by 0.9 percent in January, a larger drop than the 0.6 percent decline analysts anticipated. Investors are afraid that a war with Iraq might prompt consumers to further curtail their spending.

Retailing and auto stocks traded lower. Pacific Sunwear dropped 34 cents to $17.08, Gap fell 50 cents to $14.68 and Limited declined 20 cents to $11.30 after UBS Warburg downgraded the retailers to "neutral" from "buy."

General Motors fell 37 cents to $33.65 and Ford declined 31 cents to $8.44.

Among the gainers, toymaker Hasbro advanced 51 cents to $11.80 on fourth-quarter earnings that beat analysts' expectations by 4 cents a share.

Overseas, Japan's Nikkei stock average finished down 0.7 percent. In Europe, France's CAC-40 fell 0.4 percent, Britain's FTSE 100 slipped 0.2 percent and Germany's DAX index declined 0.6 percent.

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