- The Washington Times - Tuesday, February 4, 2003

NEW YORK, Feb. 4 (UPI) — Prices on the New York Stock Exchange and Nasdaq Stock Market ended lower in cautious trading Tuesday as investors braced for Secretary of State Colin Powell's speech Wednesday to the United Nations.

Doug McAllister, senior vice president at Prudential Securities, said market participants were positioning themselves for what will be the key market mover of the week: Powell's address to the U.N. Security Council.

"Concerns about war with Iraq are clearly on the minds of everyone," he said, with some analysts now speculating that the timing of any hostilities would be early to mid-March.

The blue-chip Dow Jones industrial average, which gained 56.01 points Monday, dropped 96.81 points to close at 8,013.01. The tech-heavy Nasdaq composite index, which added 2.88 points in the previous session, dropped 17.79 points to close at 1,293.77.

The broader New York Stock Exchange composite index lost 60.33 to close at 4,824.46, the Standard & Poor's 500 index fell 12.14 to close at 848.18, the American Stock Exchange composite index ended down 2.26 points to close at 822.55 and the Wilshire 5000 Index dropped 105.43 points to 8,049.38.

Volume was 1.66 billion shares on the Big Board and 1.31 billion on the Nasdaq.

Analysts said stocks fell from the opening as investors braced for Powell's speech. He's expected to give the United Nations detailed evidence that Iraq has concealed weapons of mass destruction.

While the market typically begins to lift following military action, and rises more sharply if it is successful, analysts have warned investors not to count on that happening this time, given the weak state of earnings and the economy.

Continued tensions over North Korea are making the markets even more jittery, analysts said.

The markets were also pressured by weakness in financial issues after American International Group, the world's largest insurer, said higher loss reserves will reduce fourth-quarter earnings by $1.8 billion.

Weakness in telecommunication stocks also pressured the markets after Alcatel, Europe's largest telecom-equipment maker, posted the latest in the string of losses.

On the economic front, the Commerce Department said new orders for manufactured goods rose 0.4 percent in December to $320.6 billion after falling 0.8 percent in November. Economists were expecting new orders placed with U.S. factories to improve 0.3 percent during the month.

U.S. chain store sales grew modestly in January as retailers slashed prices to clear winter inventories, according Instinet Research's weekly Redbook report. Sales at major U.S. chain stores grew 0.7 percent in the four weeks ended Feb. 1, compared with the same period last month. The Redbook Average is compiled from a sample of general merchandise retailers representing about 9,000 stores.

Meanwhile, U.S. Treasury prices rose. The 10-year bond gained 14/32 to 100 16/32. Its yield, which moves in the opposite direction of its price, dropped to 3.94 percent from 3.99 percent late Monday.

In Europe, stock prices ended broadly lower. The London International Stock Exchange's blue-chip FTSE-100 index fell 80.0 points, or 2.2 percent, to 3,609.4. The German DAX index sank 125.18 points, or 4.6 percent, to 2,626.81 and the French CAC-40 index fell 94.29 points, or 3.2 percent, to 2,863.50.

Analysts said European stocks came under selling pressure from weakness in technology stocks following a sales warning from France's Alcatel. The threat of war in Iraq was also weighing on markets ahead of Powell's U.N. speech.

Earlier in Asia, prices ended mixed on the Tokyo Stock Exchange as profit-taking offset gains in large-cap issues. The blue-chip Nikkei Stock Average, which jumped 160.85 points Monday, eased 15.89 points, or 0.2 percent, to 8,484.90. But the broader Topix Index, which gained 16.52 points in the previous session, rose another 6.56 points, or 0.8 percent, to 844.26.

Elsewhere in Asia, prices eased in light post-holiday trading on the Hong Kong Stock Exchange. The blue-chip Hang Seng Index, which rose 18.16 points last Thursday, slipped 6.24 points, or 0.07 percent, to 9,252.71. The Hong Kong market had been closed Friday and Monday for the Chinese Lunar New Year holiday.

Stocks rose slightly in light post-holiday trading on the South Korean Stock Exchange. The Korean Composite Stock Price Index, or Kospi, which added 8.51 points last Thursday, rose 3.37 points, or 0.6 percent, to 603.78. The South Korean market also was Friday and Monday for the New Year holiday.

Prices rose in light trading on the Singapore Stock Exchange, snapping a three-day losing streak. The Straits Times Index, which eased 4.45 points Friday, rose 4.98 points, or 0.4 percent, to 1,296.59 as investors returned from the Lunar New Year holiday.

The Taiwan Stock Exchange remained closed for the long Chinese New Year holidays and will reopen on Feb. 6.

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