Closing Market Report

Star-Bulletin news services

Friday, March 28, 2003

Stocks trade lower
for third straight day

By Amy Baldwin
Associated Press

NEW YORK >> Investors worried about a drawn-out war with Iraq sold stocks lower for the third straight day today, snapping Wall Street's two-week winning streak. But analysts, characterizing the selling as moderate, said the market was holding up well despite the uncertainty.

There were more advancers than decliners on the New York Stock Exchange, a sign that investors, while concerned, are far from panicky.

The Dow Jones industrial average has held on to more than half the 997 points it gained in the six days leading up to the war and the two sessions that followed the start of fighting.

"The rally we saw a week or so ago does show that there is a desire to be back in stocks," said Susan L. Malley, chief investment officer for Malley Associates Capital Management, adding that her firm is "not ready to pour money back into stocks yet, but we have put a little more into equities than we had before the war."

The Dow closed down 55.68, or 0.7 percent, at 8,145.77. The Dow incurred a three-day loss of 134.46. For the week, the blue chips lost 4.4 percent.

The broader market also retreated for a third day and for the week overall. Today, the Nasdaq composite index fell 14.63, or 1.1 percent, to 1,369.62. The Standard & Poor's 500 index declined 5.02, or 0.6 percent, to 863.50.

For the week, the Nasdaq gave back 3.7 percent and the S&P forfeited 3.6 percent.

Advancing issues managed to claim a narrow, 14-to-13 lead over decliners on the NYSE. Trading volume was again light, as it was in the weeks leading up to the war and since fighting began on March 19.

The Russell 2000 index, which tracks smaller company stocks, fell 0.81, or 0.2 percent, to 368.69.

Investors have been collecting profits this week from the prewar rally, but the Dow has retained about 555 points, or nearly 56 percent, of its 997-point advance.

Fears that the fighting in Iraq will last longer than investors anticipated have been responsible for this week's selling, although their effect has waned as the market's losses moderated. Wall Street is concerned that the longer the war takes, the more cautious consumers and businesses will become.

Economic news contributed to today's declines.

The Commerce Department reported consumer spending was flat for a second straight month in February as people clamped down amid job and war worries and higher energy prices.

Investors are particularly sensitive to news about consumer spending, which accounts for two-thirds of the economy, although today's reading was better than the 0.2 percent decline economists forecast.

The Commerce Department also said Americans' incomes rose by a modest 0.3 percent in February, down from a 0.4 percent advance the previous month.

Overseas, Japan's Nikkei stock average finished today down 1.1 percent. In Europe, France's CAC-40 rose 0.4 percent, Britain's FTSE 100 lost 0.6 percent and Germany's DAX index dropped 2.5 percent.

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