NEW YORK >> Wall Street moved moderately higher today as investors selectively picked up bargains after two days of declines. But trading was muted by fears of a protracted military conflict with Iraq. Bargain hunting
lifts stocksBy Hope Yen
Associated PressAnalysts said volume was light, and the major indexes fluctuated throughout the day.
"Most people are still frozen and paralyzed with respect to news in the world with Iraq," said Keith Keenan, vice president of institutional trading at Wall Street Access, a New York-based brokerage firm.
The market remains vulnerable because "people who were expecting a war rally are starting to realize it may not materialize," he added. "Once it becomes apparent the U.S. is going to win the war with Iraq, investors will focus on the economy's fundamentals, which are weak."
The Dow Jones industrial average rose 70.73, or 0.9 percent, to close at 7,775.60, having declined 186 points over the previous two sessions to a near five-month low. Advancing issues narrowly outnumbered decliners on the New York Stock Exchange. Volume was light.
The broader market also finished higher. The Nasdaq composite index gained 6.63, or 0.5 percent, to 1,314.40. The Standard & Poor's 500 index rose 7.86, or 1 percent, to 829.85. The Russell 2000 index inched up 0.03 to 356.54.
The price of the Treasury's 10-year note was up 3/16 point, while its yield fell to 3.62 percent from 3.65 percent late yesterday. Two-year Treasury notes were up 1/16 point and yielded 1.43 percent, down from 1.48 percent yesterday.
U.S. hopes for a U.N. resolution authorizing war against Iraq were dampened today when French, German, Russian foreign ministers said they will "not allow" it. U.S. Secretary of State Colin Powell responded "nobody really knows who has the votes until the votes are taken."
Meanwhile in North Korea, the United States is basing more heavy bombers nearby and will formally protest the communist nation's "reckless actions" in using MiG fighters to intercept a U.S. surveillance plane.
Investors fear tensions with Iraq and North Korea could weaken the U.S. economic recovery, leading to sharp declines in recent months. The Dow is nearly 500 points above its five-year low of 7,286.27, reached on Oct. 9.
Still, Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia, noted that the main indexes in recent weeks have traded within a narrow range, and are currently at levels not much lower than they were a month ago.
"People are content to wait out this period of uncertainty until we see what action is taken in Iraq," he said. The more the Iraq situation drags on, "the more you'll have trading in this range."
Investors largely shrugged off an economic report today showing modest growth in the U.S. service sector. The Institute for Supply Management said its non-manufacturing index for February moved to 53.9, from 54.5 in January. Economists had expected a reading of 53.0.
Overseas, Japan's Nikkei stock average finished 0.1 percent lower. In Europe, France's CAC-40 fell 0.8 percent, Britain's FTSE 100 dropped 1.7 percent and Germany's DAX index dipped 0.1 percent.
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