Star-Bulletin news services
Dow nearly slips
below 10,000Terrorism fears spark the
fifth triple-digit drop in the
Dow's past nine trading sessions
NEW YORK >> Investors increasingly worried about terrorism extended Wall Street's sharp decline into another week yesterday, selling stocks across the market and giving the Dow Jones industrials their fifth triple-digit drop in the past nine sessions.
The blue chips came close to breaching 10,000 for the first time since Dec. 12 after Israeli troops killed the leader of the Palestinian group Hamas early yesterday. Hamas has promised retaliation against both Israel and the United States.
The turbulence in the Middle East discouraged equity investors already uneasy about a slow economic recovery and tepid job growth. Wall Street was also worried about decreased consumer spending due to rising oil prices.
"The geopolitical situation is dominating the markets, but it's a very strange thing because there's no way to quantify it," said Peter Dunay, chief market strategist at Wall Street Access. "It definitely puts investors on edge. They've already factored in a lot of future positives, and when that's threatened, they react."
The Dow Jones industrial average finished the session down 121.85, or 1.2 percent, at 10,064.75. The index fell as low as 10,012.23 in afternoon trading. The Dow came off a 53.48 loss last week, and has lost 672.95, or 6.3 percent, since its recent high of 10,737.70 on Feb. 17.
Broader stock indicators were also sharply lower. The Standard & Poor's 500 index fell 14.38, or 1.3 percent, to 1,095.40, closing below the 1,100 mark for the first time since Dec. 26. The Nasdaq composite index was down 30.57, or 1.6 percent, at 1,909.90. The Nasdaq has fallen eight of the last nine weeks. It last closed below 1,900 on Nov. 21.
The price of the Treasury's 10-year note closed up1532 point, while its yield fell to 3.71 percent from 3.78 percent Friday. Two-year Treasury notes rose116 point and yielded 1.48 percent, down from 1.52 percent Friday.
The declines cut across every sector, with technology shares particularly hard hit due to the turmoil over the presidential election in Taiwan, where some of the strongest technology manufacturers are based. Airlines stocks also fell sharply due to downgrades from brokerage houses, worries about a drop in travel due to terrorism and rising fuel prices.
With no major economic news due until week's end and first-quarter earnings still a month away, the markets were particularly susceptible to bad news abroad. Corporate fundamentals and the underlying economy remain solid, but investors will likely need a string of better-than-expected economic data and earnings to pull out of the correction that kept the major indexes down for the past few weeks.
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