- The Washington Times - Tuesday, March 18, 2003

NEW YORK, March 18 (UPI) — Prices on the New York Stock Exchange and Nasdaq Stock Market were mostly flat in cautious trading at midday Tuesday, pressured by a weak report on the housing market.

The blue-chip Dow Jones industrial average, which surged 282.21 points Monday, was ahead 7.10 points to 8,149.00. The tech-heavy Nasdaq composite index, which jumped 51.94 points in the previous session, was down 4.08 points to 1,388.19.

The broader New York Stock Exchange composite index was down 4.42 to 4,779.53, the Standard & Poor's 500 index was down 1.02 to 861.77, the American Stock Exchange composite index was down 5.98 points to 814.67 and the Wilshire 5000 Index was down 6.42 to 8,156.74.

Big Board volume declined to an estimated 752 million shares from the 802 million shares changing hands during the same period on Monday, while Nasdaq volume slid to an estimated 697 million shares from 827 million shares.

Analysts said just a day after its huge war-inspired rally Wall Street cooled off and stocks struggled for direction. They said that investors were weighing hopes for a swift U.S.-led strike on Iraq against signs of a tepid economy and concerns about the many surprises of a war. Many were also cashing in on earlier gains.

President George W. Bush on Monday night said the United States would lead an attack on Iraq if President Saddam Hussein and his sons didn't leave the country within 48 hours. Baghdad rejected the U.S. ultimatum.

There was also unease after the national terror alert level was raised on Monday, to "orange," or high, from "yellow," or elevated.

Questions also arose about the health of the U.S. economy after a Commerce Department report said housing starts had the largest decline in nine years during February as winter weather hampered construction in most of the country.

Housing starts were down 11 percent, the largest decline since a 17 percent plunge in January 1994 and much larger than the 0.7 percent decline expected by economists.

The surprisingly weak data had many traders looking ahead to Tuesday afternoon's scheduled meeting of the Federal Open Market Committee. Any announcement from the Fed on changes to the key federal funds rate target will come at approximately 2:15 p.m. EST. Most economists expect the Fed to leave the target at 1.25 percent but shift to a weakening "bias" statement.

U.S. Treasury prices eased. The 10-year bond fell 3/32 to 100 7/32. Its yield, which moves in the opposite direction of its price, inched up to 3.85 percent from 3.84 percent late Monday.

In Europe, stock prices ended higher in London and Frankfurt but fell in Paris. The London International Stock Exchange's blue-chip FTSE-100 index added 14.6 points to 3,736.9. The German DAX index rose 45.81 points, or 1.8 percent, to 2,532.93 and the French CAC-40 index fell 43.85 points, or 1.6 percent, to 2,787.88.

In Asia, prices on the Tokyo Stock Exchange ended higher after getting a boost from Monday's strong gains on Wall Street. The blue-chip Nikkei Stock Average, which fell 131.05 points in the previous session, rose 82.82 points, or 1 percent, to 7,954.46.

Stocks also ended higher in Hong Kong, South Korea, Taiwan, Singapore and Sydney as markets responded positively to the end of uncertainty over whether a war would commence against Iraq.

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