NEW YORK >> Investors spooked by hostilities in Iraq and a steep rise in oil prices sent stocks lower in light, post-Christmas trading today. Shares fall on
war, oil worriesBy Eileen Alt Powell
Associated PressRetailers were punished after Wal-Mart lowered its December sales expectations.
An afternoon sell-off followed a morning rally that had been sparked by a government report indicating new claims for unemployment benefits were dropping. The Dow Jones industrial average climbed more than 116 points before reversing direction.
Declining shares exceeded advancers by eight to seven on the New York Stock Exchange, where volume was 710 million shares, compared with 586.12 million at the same time Tuesday.
The Dow closed down 15.50, or 0.18 percent, at 8,432.61. Declines in Amazon.com and Microsoft helped pull the Nasdaq composite index down 4.58, or 0.33 percent, to 1,367.89, while the S&P 500 was off 2.81, or 0.31 percent, at 889.66. The Russell 2000 index rose 1.28, or 0.33 percent, to 389.40.
The price of the Treasury's 10-year note was up 1/4 point, while its yield fell to 3.90 percent from 3.94 percent late Tuesday. Two-year Treasury notes were up 3/32 point and yielded 1.68 percent, down from 1.73 percent Tuesday.
Investors turned bearish after the U.S. military said warplanes from the U.S.-British coalition bombed Iraqi military command and communication targets today in southern Iraq. The attack was in retaliation for the downing of an unmanned American surveillance drone on Monday, the military said.
The rising tension with Iraq, along with the continued strike in Venezuela sent oil prices soaring. Oil prices for February delivery jumped 52 cents to $32.49, and some analysts predict that the price could hit $35 soon.
Wal-Mart said it was cutting its December same-stores sales forecast and now expects sales to gain 2 percent to 3 percent. It had predicted sales at the low end of a 3 percent to 5 percent range. Investors apparently anticipated the reduced sales figures and sent Wal-Mart share up 6 cents to $49.76. But Federated fell 24 cents to $27.66, and Amazon.com dropped $1.58 to $20.30.
The decline for Amazon.com came despite the online retailer's announcement that it finished its "busiest holiday season ever" with more than 56 million items ordered worldwide from Nov. 1 to Dec. 23. Analysts speculated that investors had been rattled by Wal-Mart's report and so didn't respond positively Amazon's news.
Microsoft fell 43 cents to $53.39 despite its announcement that shoppers spent a record $10.7 billion in the fourth quarter at its MSN network of Internet services.
Overseas, Japan's Nikkei stock average finished up 2.34 percent. European markets were closed for the post-Christmas holiday.
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