- The Washington Times - Wednesday, February 26, 2003

NEW YORK, Feb. 26 (UPI) — Prices on the New York Stock Exchange and the Nasdaq Stock Market closed lower Wednesday as investors sought protection from a possible war with Iraq and disappointing earnings news from Hewlett-Packard.

The blue-chip Dow Jones industrial average lost 103.22 points, or 1.31 percent, to close at 7,806.28, after gaining 51.26 points Tuesday. The tech-heavy Nasdaq composite index tumbled 25.32 points, or 1.91 percent, to 1,303.66.

The broader New York Stock Exchange composite index dropped 59.79 points to 4,653.59, the Standard & Poor's 500 index lost 11.06 points to 827.51, the American Stock Exchange composite index declined by 1.74 points to 826.84 and the Wilshire 5000 Index dropped 97.91 points to 7,851.48.

Big Board volume was at an estimated 1.34 billion shares, while Nasdaq volume was estimated at 1.19 billion shares.

Stocks fell from the opening after Saddam denied the exile rumors. Although the response was restrained, investors continued to take their cues from developments in the Iraq crisis.

In an interview with CBS News's Dan Rather, to be broadcast on Wednesday evening, Saddam Hussein said he would rather die than leave his country, quashing speculation among traders who late in Tuesday's session had bid shares higher on rumors that the Iraqi leader might accept exile.

"We will die here. We will die in this country and we will maintain our honor — the honor that is required … in front of our people," Saddam said, according to excerpts of the interview posted on the network's Web site.

Analysts said with no major economic reports set for release Wednesday, and beyond talk of the war, corporate news would drive market action.

Uninspiring earnings from Hewlett-Packard dealt the technology sector another blow. Hewlett-Packard reported after the close of trading Tuesday that it had improved its first-quarter profit but saw weaker-than-expected revenue.

Investors were also concerned about renewed corporate governance questions. The Securities and Exchange Commission has informally notified Morgan Stanley that it might face civil charges alleging that it doled out shares of initial public offerings to investors based partly on their commitments to buy additional stock after trading began. Morgan Stanley has denied wrongdoing.

U.S. Treasury prices rose, lifted by weakness in stocks. The 10-year bond rose 13/32 to 100 28/32. Its yield, which moves in the opposite direction of its price, slid to 3.77 percent from 3.82 percent late Tuesday.

In Europe, stock prices ended lower as investors digested an unsavory batch of corporate news.

The London International Stock Exchange's blue-chip FTSE-100 index slid 28.20 points, or 0.78 percent, to 3,593.30. The German DAX index eased 35.30 points, or 1.42 percent, to 2,450.20 and the French CAC-40 index slid 24.80 points, or 0.92 percent, to 2,658.57.

Analysts said insurers fell after Swiss Re said it expects to post a full-year loss and that it plans to cut its dividend. And German stocks in particular were pressured by a report that the country's economy was stagnant during the fourth quarter of 2002 compared with the third quarter, signaling that the eurozone's largest economy could be on its way into a recession.

In Asia, prices on the Tokyo Stock Exchange were slightly lower in light trading, pressured by weakness in banks. The blue-chip Nikkei Stock Average, which sank 204.46 points in the previous session, slipped 3.68 points, or 0.04 percent, to 8,356.81.

Stocks also lost ground on the Hong Kong Stock Exchange for the fifth consecutive session. The blue-chip Hang Seng Index, which fell 90.99 points in the previous session, lost another 32.20 points, or 0.4 percent, to 9,116.28.

Prices edged up in moderate trading in Taiwan, where the key Weighted Price Index, which fell 154.85 points in the previous session, added 2.34 points, or 0.05 percent, to 4,456.69.

Prices slid on the South Korean Stock Exchange. The Korea Composite Stock Price Index, which dropped 24.04 points during the previous session, eased 1.99 points, or 0.3 percent, to 590.26 amid lingering security concerns in the Korean Peninsula.

Prices also eased on the Singapore Stock Exchange, where the Straits Times Index slipped 3.30 points to 1,287.14.

Australia rose, with the All Ordinaries Index up 23.70 points to 2,804.20.


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