Bush victory prediction boosts Wall Street
By Hope Yen
NEW YORK Wall Street moved moderately higher today as President Bush's prediction that U.S.-led forces will prevail in Iraq prompted investors to pick up bargains following yesterday's steep decline.
Analysts said investors seemed to take heart from a variety of developments, including a somewhat positive consumer confidence report and reports of a civilian uprising in southern Iraq. Volume also was light, creating sharper price swings.
"We had a bunch of small stories that have added to the stronger-than-expected economic data which has helped stabilize the market," said Todd Clark, head of listed equity trading at Wells Fargo Securities.
"The market is sort of settling into a feeling of while war is going to take a while, we're back in control," he said.
The Dow closed up 65.55, or 0.8 percent, at 8,280.23 after declining 307 points in the previous session on disappointment about war developments over the weekend. Yesterday's loss was the largest one-day point drop since Sept. 3, 2002.
Earlier today, blue-chip stocks had climbed as much as 123 points before losing some momentum after the Senate unexpectedly voted to cut Bush's proposed $726 billion tax cut in half.
The broader market also finished higher. The Nasdaq composite index gained 21.23, or 1.6 percent, to 1,391.01, after yesterday's loss of 52 points. The Standard & Poor's 500 index rose 10.51, or 1.2 percent, to 874.74, having dropped 31 points on Monday.
Today, U.S. and British forces slowly edged closer to the Iraqi capital, hampered by swirling sandstorms. U.S. Air Force Gen. Richard Myers and British Prime Minister Tony Blair said the war would be a tough fight with likely difficult days ahead.
But Bush said coalition forces are "on a steady advance" in the Middle East and will prevail. British forces also battled 1,000 Iraqi soldiers in Basra and a British reporter said residents were staging an uprising against pro-Saddam Hussein forces.
Meanwhile, investors found encouragement in a pair of mixed economic reports today.
The Conference Board said its Consumer Confidence Index fell to 62.5 from a revised 64.8 in February, citing worries about the war's impact on the economy. Still, the reading beat analysts' expectations of 62.0.
And the National Association of Realtors reported that existing home sales came in at a seasonally adjusted annual rate of 5.84 million, representing a 4.3 percent decline from January's record high sales pace. Even with the drop, it was the fourth best month on record.
Stocks have surged in recent weeks on investor hopes for a brief war as well as bets that Saddam may have been killed. But Wall Street quickly saw declines yesterday after allied forces encountered resistance from Iraqi troops and Saddam was seen in a televised speech.
"Clearly, Baghdad is the 800-pound gorilla in the room dominating investment decisions," said A.C. Moore, chief investment strategist for Dunvegan Associates. "At the same time, there's an undercurrent of positive economic progress and stocks have good value."
Airborne rose $1.82 to $19.87 after Deutsche Post's DHL shipping service agreed to buy the third-largest U.S. package delivery service for $1.05 billion.
UnumProvident climbed $1.58 to $9.91 after the nation's largest disability insurer said it will restate three years of earnings in response to questions raised by the Securities and Exchange Commission.