- The Washington Times - Wednesday, February 5, 2003

NEW YORK (AP) Investors unloaded stocks yesterday, collecting profits from Wall Street's two-day rally, amid increasing anxiety about a war with Iraq.
Analysts said there was little reason to buy ahead of a U.N. address today by Secretary of State Colin L. Powell.
"I just don't see anything right now that is going to improve investors' psychology about the market. There is just so much uncertainty going on with the potential for war with Iraq," said Richard A. Dickson, senior market strategist at Lowry's Research Reports in Palm Beach, Fla.
The Dow Jones Industrial Average closed down 96.53, or 1.2 percent, at 8,013.29. The Dow's loss wiped out more than half of the 164.69 gained in the past two sessions after three weeks of heavy selling.
The broader market also retreated. The Nasdaq Composite Index fell 17.64, or 1.3 percent, to 1,306.15. The Standard & Poor's 500 index declined 12.12, or 1.4 percent, to 848.20.
Wall Street was focused on Mr. Powell's scheduled appearance before the U.N. Security Council today, when he is expected to discuss new intelligence information on Iraq. Investors are worried that a war with Iraq would further undermine a sluggish economy, in which earnings continue to languish.
"Investors want to be told that all is clear in the world, and it is safe to get back into the markets, which, unfortunately, is not something investors can look forward to," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank.
Mr. Caffrey advised that investors stay focused on their long-range objectives and look for bargains on Wall Street.
"By the time all is right in the world, stocks will … move [up]," he said. "Investors need to be focused on the long term and more importantly on what situations make sense. … High-quality companies can basically be on sale."
While the market historically lifts after military action begins, other analysts are skeptical whether that would happen this time.
"What if it is not quick and easy?" Mr. Dickson said.
Networking giant Cisco Systems declined 28 cents to $13.20 ahead of its quarterly earnings due out later in the day. After the market closed, Cisco reported fiscal second-quarter profits that exceeded analysts' expectations by 2 cents a share. Still, shares fell 28 cents in the extended-hours trading session.
American International Group fell $3.63 to $51.70 after the insurance company announced it was taking an after-tax charge of $1.8 billion against fourth-quarter earnings in order to boost its cash reserves.
Oxford Health Plans fell $2.18 to $32 on a brokerage downgrade from Salomon Smith Barney.
Gainers included drugstore company CVS, which rose $1.21 to $24.55 after reporting fourth-quarter earnings that beat analysts' expectations by 2 cents a share and 2002 profits that were 3 cents a share greater than anticipated.
Declining issues outnumbered advancers 9-to-5 on the New York Stock Exchange. Trading volume was light at 1.41 billion shares, but ahead of Monday's slow 1.22 billion.
The Russell 2000 index, the barometer of smaller-company stocks, fell 1.53, or 0.4 percent, to 368.72.
Overseas, Japan's Nikkei stock average finished yesterday down 0.2 percent. In Europe, France's CAC-40 fell 3.2 percent, Britain's FTSE 100 declined 2.7 percent and Germany's DAX index sank 4.3 percent.

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