Saddam rally fizzles on
disappointing retail sales
NEW YORK >> Wall Street sank lower yesterday as disappointing sales at Wal-Mart Stores Inc. chilled the retailing sector and eroded early gains following the weekend capture of fallen Iraqi leader Saddam Hussein.
Stocks traded briskly around the globe on news that Saddam was in custody, but the rally was short-lived on Wall Street. The major indexes shot up initially, but steadily retreated as investors refocused on the domestic picture. While the arrest was important news for U.S. forces in Iraq, analysts were not surprised by its limited impact on the markets.
"This is a geopolitical event that gave us a nice, short-term blip, but it wasn't the kind of news that would drive us to even loftier levels," said Brian Williamson, an equity trader at The Boston Company Asset Management. "The war is by no means over; this is just one piece of the puzzle, and not a cause for a huge end-of-war celebration."
Decliners outnumbered advancers nearly 2 to 1 on the New York Stock Exchange. Consolidated volume was heavier, with 1.90 billion shares traded, compared with 1.57 billion shares on Friday.
After soaring nearly 100 points in the first minutes of trading, the Dow Jones industrial average wheezed to a negative finish, ending the day down 19.34, or 0.2 percent, at 10,022.82.
The broader gauges were also lower. The Nasdaq composite index closed down 30.74, or 1.6 percent, at 1,918.26, after surging nearly 1 percent earlier in the day. The Standard & Poor's 500 index lost 6.10, or 0.6 percent, to close at 1,068.04. The Russell 2000 index closed down 12.34, or 2.2 percent, at 535.25.
The price of the Treasury's 10-year note closed down 5/32 point, while its yield rose to 4.26 percent from 4.24 percent late Friday. Two-year Treasury notes were down 1/32 point and yielded 1.83 percent, up from 1.81 percent late Friday.
Analysts took heart that yesterday's slow sell-off was not panic-driven. Jack Caffrey, equities strategist at J.P. Morgan Private Bank, said it underscored the caution of many investors.
"It feels like people are looking to get a little bit more defensive going into the holidays and to protect their gains," Caffrey said.
Few were warmed by the news from retailing titan Wal-Mart, which lost $1.76 to close at $50.74. The world's largest retailing chain said December growth at stores open at least a year was near the low end of its 3 percent to 5 percent projected range, and traffic was down for the week.
High-tech bellwether Oracle Corp. finished down 13 cents at $12.70, but gained 30 cents in after-hours trading after its quarterly earnings report beat analysts' expectations by a penny. The company, which announced the results after the markets closed, said profits were up on rising demand for its business software.