Stocks fall on
war worries
By Amy Baldwin NEW YORK >> Increasingly anxious about a possible war with Iraq, investors unloaded stocks today, collecting profits from Wall Street's two-day rally.
Associated PressAnalysts said there was little reason to buy ahead of a U.N. address tomorrow by Secretary of State Colin Powell.
"I just don't see anything right now that is going to improve investors' psychology about the market. There is just so much uncertainty going on with the potential for war with Iraq," said Richard A. Dickson, senior market strategist at Lowry's Research Reports in Palm Beach, Fla.
The Dow Jones industrial average was down 96.81, or 1.2 percent, at 8,013.01. The Dow's loss wiped out more than half of the 164.69 gained in the past two sessions following three weeks of heavy selling. Declining issues outnumbered advancers 9 to 5 on the New York Stock Exchange, where trading was light.
The broader market also retreated. The Nasdaq composite index fell 17.64, or 1.3 percent, to 1,306.15. The Standard & Poor's 500 index declined 12.12, or 1.4 percent, to 848.20. The Russell 2000 index fell 1.53, or 0.4 percent, to 368.72.
The price of the Treasury's 10-year note was up 15/32 point, while its yield fell to 3.93 percent from 4 percent late yesterday. Two-year Treasury notes were up 3/32 point and yielded 1.62 percent, down from 1.73 percent yesterday.
Wall Street was focused on Powell's scheduled appearance before the U.N. Security Council tomorrow, when he is expected to discuss new intelligence information on Iraq. Investors are worried that a war with Iraq would further undermine a sluggish economy, in which earnings continue to languish.
"Investors want to be told that all is clear in the world, and it is safe to get back into the markets, which, unfortunately, is not something investors can look forward to," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank.
Caffrey advised that investors stay focused on their long-range objectives and look for bargains on Wall Street.
"By the time all is right in the world, stocks will have move (up). Investors need to be focused on the long-term and more importantly on what situations make sense. ... High-quality companies can basically be on sale."
While the market historically lifts after military action begins, other analysts are skeptical whether that would happen this time.
"What if it is not quick and easy?" Dickson said.
Networking giant Cisco Systems declined 28 cents to $13.20 ahead of its quarterly earnings due out later in the day.
American International Group fell $3.63 to $51.70 after the insurance company announced it was taking an after-tax charge of $1.8 billion against fourth-quarter earnings in order to boost its cash reserves.
And Oxford Health Plans fell $2.18 to $32 on a brokerage downgrade from Salomon Smith Barney.
Gainers included drug store company CVS, which rose $1.21 to $24.55 after reporting fourth-quarter earnings that beat analysts' expectations by 2 cents a share and 2002 profits that were 3 cents greater than anticipated.
Japan's Nikkei stock average finished down 0.2 percent. In Europe, France's CAC-40 fell 3.2 percent, Britain's FTSE 100 declined 2.7 percent and Germany's DAX index sank 4.3 percent.
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