- The Washington Times - Tuesday, January 28, 2003

NEW YORK (AP) War fears pummeled Wall Street yesterday, pushing the Dow Jones industrials below the 8,000 level for the first time in three months and sending the overall market lower for the seventh time in eight sessions.
Investors were also cautious ahead of President Bush's State of the Union address today.
The Dow closed down 141.45, or 1.7 percent, at 7,989.56. The blue chips last traded below 8,000 on Oct. 15 and last closed below that level Oct. 14, when they stood at 7,877.40.
The Dow suffered its fifth triple-digit decline in six sessions and its seventh loss in eight sessions. In eight sessions, the Dow dropped 853 points, more than wiping out all of its 2003 gains.
The broader market also pulled back sharply. The Nasdaq Composite Index fell 16.87, or 1.3 percent, to 1,325.27. The Standard & Poor's 500 index fell 13.92, or 1.6 percent, to 847.48, having fallen Friday, as the Dow did, to levels not seen since October.
"The public at large is shunning equities. This is traditionally the time when money comes into equities, into retirement accounts. So this is disturbing," said Stephen Massocca, president of Pacific Growth Equities. "People are concerned about Iraq, but I think there is a deeper concern about the state of the economy, the state of the markets. There is a kind of bear market malaise."
Investors are worried that war with Iraq would come as a hard blow to an already feeble economy. One concern is that higher oil prices would result and eat away at corporate profits. Another is that consumers would curtail their spending, which accounts for two-thirds of the economy.
Both consumer cyclical stocks, such as retailing and automobile issues, and oil stocks traded lower on investors' war fears. Retailer Kohl's fell $1.25 to $52.50, General Motors declined 56 cents to $36.99 and Exxon Mobil slipped 87 cents to $31.82.
"The confrontation [with Iraq], even though anticipated, is still an expensive matter and one with an uncertain outcome. So the markets are on edge," said A.C. Moore, chief investment strategist for Dunvegan Associates in Santa Barbara, Calif.
The market perhaps could have better tolerated its war jitters and fended off some losses if it weren't for a rather lackluster earnings season. Companies reporting their fourth-quarter profits during the past two weeks have either disappointed investors with past performance or with dim outlooks.
Indeed, disappointing results dragged some individual stocks lower yesterday. Mortgage banker Freddie Mac fell $2.51 to $56.60 on earnings that missed analysts' expectations by 15 cents a share.
Tyson Foods dropped $1.25 to $10.24 after reporting first-quarter profits that were a penny shy of Wall Street's forecast.


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