- The Washington Times - Tuesday, February 25, 2003

NEW YORK, Feb. 25 (UPI) — Prices on the New York Stock Exchange and Nasdaq Stock Market ended on the upside Tuesday, after a steep drop prompted by a disappointing report on U.S. consumer confidence, a possible war against Iraq and a North Korean missile test.

Stocks rebounded despite war fears as investors opted to buy on expectations that the economic recovery was continuing, although fitfully. Also, investors view a conflict with Iraq as still not imminent. The turnaround came in late day trading.

The blue-chip Dow Jones industrial average, which sank 159.81 points Monday, rose 51.26 points to close at 7,909.50. The tech-heavy Nasdaq composite index, which dropped 26.64 points in the previous session, added 6.60 to close at 1,328.98.

The broader New York Stock Exchange composite index gained 7.16 to close at 4,713.38, the Standard & Poor's 500 index added 5.99 to close at 838.57, the American Stock Exchange composite index was flat, falling 0.66 to close at 828.58.

Volume was 1.75 billion shares on the Big Board and 1.32 billion on the Nasdaq Stock Exchange.

Analysts said that before rebounding, share prices declined in early trading amid continued concerns about the threats of Iraq and North Korea.

Iraq remains front and center for investors. The United Nations is ready to consider rival resolutions — one from the United States and Britain that would allow military action, and one from France, Russia and Germany that would give arms inspectors more time.

There's also North Korea, which test-fired a missile into the Sea of Japan as South Korea was inaugurating its new president. The missile further intensifies concern about the North Koreans.

Geopolitics has been the driving force in the markets for most of this year. But there are also economic developments for investors to consider.

On the economic front, surging energy costs, a lackluster job market and concerns over terrorism and a possible war with Iraq drove consumer confidence in February to its lowest level since October 1993.

The Conference Board said its index of consumer confidence, which uses 1985 as a base of 100, tumbled 14.8 percentage points to 64 from 78.8 in January. Most economists on Wall Street had expected confidence drop to 77 during the month.

The board also noted the last time the index was lower was in October of 1993 when it stood at 60.5.

Meanwhile, sales of existing single-family homes rose 3 percent in January to a record rate of 6.09 million units as prices rose further, the National Association of Realtors said.

And U.S. chain store sales slipped last week as winter storms kept consumers out of stores. As the snow melted, sales improved, but not enough to recoup earlier losses, the Bank of Tokyo-Mitsubishi and UBS Warburg said in a joint report. Chain store sales fell 0.8 percent in the week ended Feb. 22.

On the corporate front, Home Depot said that fourth-quarter net income fell 3.4 percent to $686 million. Sales slid 7.9 percent to $13.21 billion. But both profit and sales beat estimates.

U.S. Treasury prices rose as stocks fell. The 10-year bond rose 6/32 to 100 14/32. Its yield, which moves in the opposite direction, slipped to 3.82 percent from 3.84 percent late Monday.

In Europe, stock prices ended lower in cautious trading.

The London International Stock Exchange's blue-chip FTSE-100 index lost 62.4 points, or 1.7 percent, to 3,639.4. The German DAX index sank 106.07 points, or 4.1 percent, to 2,465.28 and the French CAC-40 index fell 102.24 points, or 3.7 percent, to 2,683.37.

In Asia, prices on the Tokyo Stock Exchange ended sharply lower Tuesday, hurt by the North Korean missile launch and continued Iraqi war fears. The blue-chip Nikkei Stock Average, which rose 51.41 points during the previous session, sank 204.46 points, or 2.4 percent, to 8,360.49 — its lowest close since Jan. 31 and just above its 19-year closing low of 8,303.39 set on Nov. 14.

Stocks also fell on the Hong Kong Stock Exchange on growing war fears. The Hang Seng Index, which lost 11.39 points in the previous session, fell 90.99 points, or 1.0 percent, to 9,148.48.

— The key Weighted Price Index of the Taiwan Stock Exchange, which rose 60.85 point in the previous session, dropped 154.85 points, 3.4 percent, to 4,454.35.

— The Korea Composite Stock Price Index, which gained 12.69 points in the previous session, fell 24.04 points, or 3.9 percent, to 592.25.

— Singapore's Straits Times Index, which lost 8.24 points in the previous session, fell 16.35 points, or 1.3 percent, to 1,290.44.

— Australia's All Ordinaries Index, which rose 32.90 points in the previous session, fell 56.80 points, or 2 percent, to 2,780.50.

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