Economic, war fears push shares lower

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By Amy Baldwin
Associated Press

NEW YORK — Weaker-than-expected economic data and the market's persistent anxiety about a war with Iraq made for choppy trading today on Wall Street. Stocks waffled throughout the session before closing moderately lower.

Investors dabbled with bargain hunting, taking advantage of lower prices following weeks of heavy selling, but ultimately succumbed to uneasiness about war and the economy.

"Until we get this (war) under way, people are going to be sitting on their hands. I don't see any real reason for the market to rally," said Michael Murphy, head trader at Wachovia Securities in Baltimore.

The Dow Jones industrial average closed down 53.22, or 0.7 percent, at 7,837.86, according to preliminary calculations. Earlier in the session, the Dow rose as much as 90.38.

The broader market was also lower. The Nasdaq composite index fell 17.22, or 1.3 percent, to 1,320.30. The Standard & Poor's 500 index declined 6.34, or 0.8 percent, to 834.81.

Sell-offs and fizzled rallies have plagued the market for much of this year. February marked the third straight month of declines for most stocks with the Dow shedding 2 percent and the S&P losing 1.7 percent. The Nasdaq, however, managed to gain 1.3 percent.

"The Mideast confrontation is likely restraining stocks at this point. When that is concluded one way or the other, I think stocks will be unleashed to do much better," said A.C. Moore, chief investment strategist for Dunvegan Associates in Santa Barbara, Calif.

Today's economic news was mostly discouraging, accounting for much of the market's downbeat tone.

The Commerce Department reported that consumers worried about a possible war with Iraq trimmed their spending by 0.1 percent in January, missing economists' expectations for a 0.2 percent gain. The department said incomes grew by 0.3 percent.

In a third report, the Institute of Supply Management said U.S. manufacturing activity grew for a fourth straight month in February, but the pace of expansion slowed considerably and fell short of analysts' expectations.

There was some positive economic news, however, as the Commerce Department reported that construction spending jumped by 1.7 percent in January as builders bet that low mortgage rates would continue to support the housing market.

Among today's losers, Palm fell $1.28 to $10.32 after the maker of handheld electronic organizers cut its fiscal third-quarter revenue estimate and said it would take another charge against profits and was laying off 19 percent of its work force.

Ford declined 25 cents to $8.07 after reporting that February sales were flat.

Analysts said there was little reaction in the market to the weekend arrest of key al-Qaida operative Khalid Shaikh Mohammed, who has claimed to have planned the 9/11 attacks.