NEW YORK >> Wall Street posted its biggest decline in a month today as the United States and Britain submitted a new U.N. Security Council resolution authorizing war against Iraq. Retail stocks also sagged on forecasts of sluggish sales. War fears sink stocks
By Hope Yen
Associated PressThe three main market indexes fell for their third session in four as investors avoided stocks. Trading was light.
"It's continuing concerns about Iraq and that Iraq will fail to comply with a U.N. order to destroy missiles," said Alan Skrainka, chief market strategist at Edward Jones of St. Louis. "Retailers are weak given the lack of confidence among consumers and investors."
Declining issues outnumbered advancers 5 to 2 on the New York Stock Exchange. The Dow declined 159.87, or 2 percent, to close at 7,858.24, having gained 1.4 percent last week. It was the biggest one-day drop for the Dow since Jan. 30, when blue chip stocks fell 165 points.
The broader market indexes also saw their biggest point declines since Jan. 30. The Nasdaq composite index dropped 26.65, or 2 percent, to 1,322.37, having advanced 3 percent last week. The Standard & Poor's 500 index fell 15.59, or 1.8 percent, to 832.58, following a weekly increase of 1.6 percent. The Russell 2000 index fell 6.14, or 1.7 percent, to 358.22. It was up 1.6 percent last week.
The price of the Treasury's 10-year note was up 3/8 point, while its yield fell to 3.84 percent from 3.89 percent late Friday. Two-year Treasury notes were up 1/16 point and yielded 1.56 percent, down from 1.60 percent late Friday.
Analysts say concerns about war and terrorism have pressured the market, sending stocks to four-month lows earlier this month. Wall Street has seen some recent gains on bouts of bargain-hunting.
"Investors are discouraged and fearful, but the mood on Wall Street can change very quickly," Skrainka said, adding that he believes the market will see advances once questions with Iraq are more fully resolved.
Retailers, meanwhile, fell after several reported that severe winter weather will depress February sales. Wal-Mart lost $1.26 to $47.64, while Federated Department Stores dropped 76 cents to $24.82, and J.C. Penney declined 95 cents to $19.39.
Ahold tumbled $6.53, or 61.1 percent, to $4.16 after the global grocery store operator said it overstated earnings in 2001 and 2002 by at least $500 million and that its leading executives will resign.
"With Ahold's announcement in Europe, that didn't bode well for the retail group in general," Forelli said. "It probably does resurrect some fears (about accounting scandals), by reminding investors there could still be some isolated problems out there."
VaxGen slid $6.16, or 47.3 percent, to $6.86 after trials for its AIDS vaccine failed to yield a statistically significant reduction of HIV infection within the study population as a whole; however, it did show some effects among blacks and Asians.
Gainers included Lowe's, which climbed $2.08 to $38.10, after the second largest home-improvement retailer reported fourth-quarter operating profits that beat Wall Street's expectations by 7 cents a share.
Overseas, Japan's Nikkei stock average finished 0.6 percent higher. In Europe, France's CAC-40 dropped 1.6 percent, Britain's FTSE 100 dropped 0.7 percent and Germany's DAX index lost 2.9 percent.
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