Star-Bulletin news services
News of Iraq raid
sends markets up
NEW YORK >> Wall Street regained a positive track yesterday following news that four Iraqis were killed in a U.S. raid in Iraq. Investors were encouraged by news that two of Saddam Hussein's sons were among the dead.
"The market is celebrating a bit," said Arthur Hogan, chief market analyst at Jefferies & Co., explaining that "one of the major pieces of background noise (in the market) was the disappointment that we don't have clear evidence of weapons of mass destruction (by Iraq) or clear evidence that we have Saddam Hussein or any of his direct relatives."
Lt. Gen. Ricardo Sanchez said at a news conference in Baghdad, "We are certain that (Hussein's sons) Odai and Qusai were killed today."
After losing as much as 59.39 in early trading, the Dow Jones industrial average closed up 61.76, or 0.7 percent, at 9,158.45. On Monday, the Dow shed 91.46 points on disappointing earnings from Merck and Lexmark International.
The broader market, narrowly higher in earlier dealings, increased its advance. The Nasdaq composite index rose 24.69, or 1.5 percent, to 1,706.10. The Standard & Poor's 500 index advanced 9.31, or 1 percent, to 988.11.
Advancing issues outnumbered decliners slightly more than 4 to 3 on the New York Stock Exchange. Trading volume was on the heavy side at 1.43 billion shares, up from Monday's 1.23 billion.
The Russell 2000 index rose 6.83, or 1.5 percent, to 464.00. The NYSE composite index climbed 43.50 to 5,527.11. The American Stock Exchange composite index gained 2.08 to 949.38.
Still, analysts don't expect the news from Iraq to have a lasting effect on Wall Street because investors' primary focus remains second-quarter earnings.
"The geopolitical issues are still with us, but in the background. On a daily basis it is about earnings," Hogan said.
For the past two weeks Wall Street has been alternating between rallies and sell-offs as most companies reported better-than-expected earnings but failed to raise their estimates for the third and fourth quarters. Investors are questioning whether stocks, which had rallied since mid-March, climbed too high, too fast.
Since March 11, when the market hit lows for the year, the Nasdaq has climbed 34.2 percent, the Dow has gained 21.7 percent and the S&P has advanced 23.4. percent.
Chip makers and chip equipment makers gave tech stocks a boost yesterday, following better-than-expected earnings released late Monday from Texas Instruments and a string of upgrades from Lehman Brothers.
Texas Instruments climbed $1.37 to $19.25 and Novellus Systems advanced $1.76 to $36.31, each having been raised to "overweight" by Lehman.
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