NEW YORK >> Investors fell deeper into their morass of fear about terrorism and war with Iraq today, sending stocks lower for a second straight day. Greenspan testimony,
war fears sink stocks
By Amy Baldwin
Associated PressWall Street is worried that a war would undermine an already fragile economy. Investors' concerns about the economy increased Wednesday after Federal Reserve Chairman Alan Greenspan questioned the Bush administration's proposed tax cuts.
The market was building on yesterday's losses, which followed the release of an audio tape presumably of Osama bin Laden vowing solidarity with Iraq. Analysts don't expect the market to make much upward progress until it is clearer whether there will be a war and how successful the United States will be.
"No one is willing to commit themselves. ... It is a market that is drifting, and drifting one way only, and that is down," said Peter Cardillo, president and chief strategist of Global Partner Securities Inc.
Declining issues outnumbered advancers slightly more than 5 to 2 on the New York Stock Exchange, where trading volume was light.
The Dow Jones industrial average closed down 84.94, or 1.1 percent, at 7,758.17. Yesterday, the Dow shed 77.00.
The broader market was also lower. The Nasdaq composite index fell 16.52, or 1.3 percent, to 1,278.94. The Standard & Poor's 500 index declined 10.52, or 1.3 percent, to 818.68. The Russell 2000 index fell 4.58, or 1.3 percent, to 355.38.
The price of the Treasury's 10-year note was up 13/32 point, while its yield fell to 3.90 percent from 3.96 percent late yesterday. Two-year Treasury notes were up 1/16 point and yielded 1.60 percent, down from 1.64 percent yesterday.
The market's losses were partly due to Greenspan's testimony before the House Financial Services Committee. The Fed chairman questioned President Bush's new $1.3 trillion package of tax cuts, saying they would worsen an already bad outlook for the federal deficit.
Yesterday, Greenspan told a Senate committee that uncertainties about a war with Iraq poses the biggest risk to the economy.
Among today's losers on Wall Street, General Motors fell $1.56 to $33.99 after Banc of America Securities lowered its recommendation on the automaker to "sell" from "neutral."
And, Chiquita Brands slid $4.29 to $10.01 the day after the company said cost-cutting measures had a minimal effect in 2002, because the costs were not taken out until late in the year. Chiquita also said it might undertake additional restructuring activities related to a recently completed acquisition.
Gainers included Coca-Cola, which rose 74 cents to $39.74 after releasing fourth-quarter earnings that met Wall Street's expectations.
Overseas, Japan's Nikkei stock average finished up 2.1 percent. In Europe, France's CAC-40 fell 2.5 percent, Britain's FTSE 100 declined 1.5 percent and Germany's DAX index lost 2.1 percent.
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