- The Washington Times - Thursday, February 6, 2003

NEW YORK Wall Street waffled and then fell for a second straight day as investors grew increasingly nervous about a war with Iraq after Secretary of State Colin L. Powell's address to the United Nations yesterday.
The market drifted higher shortly after Mr. Powell's remarks on bets of a quick resolution of the situation with Iraq. But investors changed course later in the day as they pondered the effect of a war on the nation's shaky economic recovery.
"The market is responding to a strong presentation by Colin Powell," said Barry Berman, head trader for Robert W. Baird & Co. "Everybody's trying to guess what the reaction is going to be whether other countries will get on board."
The Dow Jones Industrial Average fell 28.11, or 0.4 percent, to close at 7,985.18, having declined 96 points in the previous session. Earlier in the day, blue-chip stocks rose as much as 139 points.
The broader market also finished modestly lower. The Nasdaq Composite Index declined 4.65, or 0.4 percent, to 1,301.50. The Standard & Poor's 500 index dropped 4.61, or 0.5 percent, to 843.59.
Overseas, Japan's Nikkei stock average finished yesterday up 0.8 percent. In Europe, France's CAC-40 rose 0.7 percent, Britain's FTSE 100 advanced 2.5 percent and Germany's DAX index gained 3.5 percent.
Mr. Powell, making his case that Iraq had evaded demands that it disarm, said various tape recordings and satellite photos represented "irrefutable and undeniable" evidence that Saddam Hussein is hiding weapons of mass destruction.
Analysts said the speech seemed to convince some investors that the United States was headed closer to war, a development that would eliminate the uncertainty pressuring the market but also raises questions about the economic effect.
"There's a perception with the case made today, that the Iraq question doesn't carry on another six months," said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons. "The market is putting the time frame closer."
Investors also were anxious about the amount of support the United States had from other members of the U.N. Security Council, analysts said. Of the 15 council members, only the United States and Britain have voiced support for forcibly disarming Saddam.
El Paso declined $1.80 to $6.20 after the energy company said it would cut its dividend by 82 percent and sell $2.9 billion in assets.
Aventis dropped $2.93 to $46.45 after trimming its sales and profit outlook for 2003, citing lower sales of its Allegra allergy medication.
Networking giant Cisco Systems finished unchanged at $13.20 despite reporting fiscal second-quarter earnings that beat Wall Street's estimates by 2 cents a share.
Gainers included Dow component Alcoa, which rose 67 cents to $19.84, after Prudential upgraded the aluminum maker's stock rating to "buy" from "hold."
Declining issues outnumbered advancers 4 to 3 on the New York Stock Exchange.
Volume was light at 1.41 billion shares, compared with 1.42 billion traded Tuesday.

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