NEW YORK >> Wall Street retreated today, declining for the first time in three sessions as investors worried that unresolved questions about Iraq will stifle corporate spending critical to the economic recovery. Stocks pull back
on Iraq worriesBy Hope Yen
Associated Press"It's short-term, profit-taking after the last two days of rallies," said Mike Kayes, chief investment officer at Eastover Capital in Charlotte, N.C. "The market is just going to bounce around until we have some kind of military action in Iraq."
Declining issues outnumbered advancers 9 to 5 on the New York Stock Exchange. Volume was very light.
The Dow Jones industrial average declined 40.55, or 0.5 percent, to close at 8,000.60, having gained 291 points the last two sessions to reach its highest level in two weeks. Earlier in the day, blue-chip stocks lost as much as 105 points.
The broader market also finished lower. The Nasdaq composite index fell 12.22, or 0.9 percent, to 1,334.32. The Standard & Poor's 500 index declined 6.04, or 0.7 percent, to 845.13. The Russell 2000 index fell 4.25, or 1.2 percent, to 360.28.
The price of the Treasury's 10-year note was up 1/2 point, while its yield fell to 3.89 percent from 3.95 percent late yesterday. Two-year Treasury notes were up 1/16 point and yielded 1.58 percent, down from 1.63 percent yesterday.
Tensions with Iraq have pressured the market for weeks, although stocks rose sharply the previous sessions on investors' belief that a war is not imminent. Still, analysts say the prospects of war and its effect on the economy continue to weigh on the market.
"All the economic and company news that we've seen have been overshadowed by developments from the Middle East. Clearly that's the 800 pound gorilla ... dominating all investment decisions," said A.C. Moore, chief investment strategist for Dunvegan Associates.
"I don't see the markets going far with that confrontation hanging," he added. "I would think the markets may not do well unless there's a fairly short-term successful confrontation."
Investors shook off a Commerce Department report today showing construction of new homes and apartments rose in January to the highest level in 16 years.
Wachovia dropped 39 cents to $35.26 after the bank agreed to acquire the brokerage unit of Prudential Financial. Prudential lost 61 cents to $30.31.
Qwest slid 32 cents to $4.05 after reporting a fourth-quarter loss that was narrower than analysts' expectations; however, its revenue also plunged 11 percent as the regional phone company's core business remained sluggish.
Gainers included semiconductor makers Intel, up 9 cents at $16.80, and Texas Instruments, up 17 cents at $16.41, after Morgan Stanley raised their ratings to "overweight" from "equal-weight."
Overseas, Japan's Nikkei stock average finished 0.2 percent lower. France's CAC-40 fell 2.7 percent, Britain's FTSE 100 lost 1.9 percent and Germany's DAX index slid 4.2 percent.
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