Posted at 12:15 p.m., Thursday, March 27, 2003
Stocks little changed over war uncertainty
By Amy Baldwin
Stocks are expected to remain vulnerable amid uncertainty about the war. Wall Street's chief concern is that the fighting could last months, posing an additional risk to the economy as uneasy businesses and consumers curtail their spending.
"Every delay in ending the war is just going to be negative for the market," said Stephen Carl, principal and head of equity trading at The Williams Capital Group.
The Dow Jones industrial average closed down 28.43, or 0.3 percent, at 8,201.45, according to preliminary calculations. The Dow retreated 50.35 yesterday and shed 307.29 on Monday, the market's worst day in six months.
The market's broader gauges also posted modest losses. The Nasdaq composite index fell 3.20, or 0.2 percent, to 1,384.25. The Standard & Poor's 500 index declined 1.43, or 0.2 percent, to 868.52.
In the past 2 1/2 weeks, investors have gone from feeling euphoric, optimistic the war would be over soon, to deeply fearful that fighting would drag on. Today, they seemed almost detached in the absence of significant war developments.
"There is no reason for anyone to make any bets until they figure out what the next move is (in Iraq). That is the only thing driving the market," said Tony Cecin, director of institutional trading at US Bancorp Piper Jaffray in Minneapolis.
The market again saw some profit-taking today, as more investors sought to preserve the gains they made when stocks surged higher in the optimistic days leading up to the war and the first few days of fighting. The Dow has given back about 386 points, or nearly 40 percent, of the 997 it soared over the course of eight sessions.
Once again, the economy gave investors reason to be pessimistic. The Commerce Department reported today that the economy as measured by gross domestic product grew at a lackluster 1.4 percent annual rate in the fourth quarter of 2002, meeting analysts' expectations. Many analysts predict the economy could fare worse in the current quarter as the sluggish job market and war uncertainties make consumers and businesses even more cautious.
Steel Technologies fell 80 cents to $9.10 after cutting its second-quarter earnings outlook to 18 cents a share, well off analysts' estimates of 33 cents.
Broadcom dropped $2.49 to $12.91 after Morgan Stanley downgraded the chip maker to "equal-weight" from "overweight."
Among gainers, Tommy Hilfiger rose $1.41 to $7.30 on reports that Jones Apparel Group had held preliminary talks to acquire the clothier. Jones Apparel advanced 31 cents to $27.95.
Advancing issues outnumbered decliners 15 to 13 on the New York Stock Exchange, where trading was light, as it was in the weeks leading up to the war.
The Russell 2000 index, the barometer of smaller company stocks, rose 1.32, or 0.4 percent, to 369.50.
Overseas, Japan's Nikkei stock average finished today up 0.2 percent. In Europe, France's CAC-40 fell 2.3 percent and Britain's FTSE 100 lost 1.7 percent, while Germany's DAX index inched up 0.2 percent.