- The Washington Times - Tuesday, March 11, 2003

NEW YORK (AP) Stocks tumbled yesterday, pulling the Dow Jones Industrial Average down more than 170 points, after France said it was prepared to vote against a U.N. resolution on Iraq.
For investors, the French announcement raised the prospect of the United States going to war against Iraq without adequate support.
"It is just a very gloomy picture," said Peter Cardillo, president and chief strategist of Global Partner Securities Inc. "Certainly the attitude, the psychology, the mood on Wall Street is one of gloom and doom, and that is continuing."
The declines were in keeping with the steep sell-offs the market has suffered all year owing to uncertainty about war and its effect on the economy, which is already shaky. Trading volume was very light, another sign that investors refuse to make major commitments.
"The irrational despair seems to imply that there is no floor to stock prices. The public without question has retreated psychologically and monetarily. … The risk aversion is quite dominant," said Ned Riley, chief investment strategist at State Street Global Advisors.
With all 30 of its stocks falling, the Dow closed down 171.85, or 2.2 percent, at 7,568.18. The losses added to the 1.9 percent decline of last week, although the Dow finished higher on Friday.
The broader market also pulled back. The Standard & Poor's 500 index dropped 21.41, or 2.6 percent, to 807.48.
The Nasdaq composite index fell 26.92, or 2.1 percent, to 1,278.37. Monday marked the three-year anniversary of the Nasdaq's all-time closing high of 5,048.62. Since then, the Nasdaq down 74.7 percent from that peak and the rest of the market have suffered brutal declines.
"Usually when you get to these depths of pessimism something happens, a catalyst comes along and reverses market psychology. But what that catalyst may be is anyone's guess, still part of the guessing game," Mr. Cardillo said.
Investors remained anxious about a war with Iraq, having heard Secretary of State Colin L. Powell say during the weekend that a conflict is drawing nearer. Iraq urged the U.N. Security Council yesterday to stand up to Washington's "bloodthirsty whims" and reject a March 17 deadline for disarmament, while a top official from a nuclear agency based at the United Nations said he was offering suggestions to Iraqi leader Saddam Hussein on how to avert a war.
Also yesterday, France said it will vote against the U.S.-backed deadline, heightening investors' concerns that the United States will enter a war without sufficient support.
"There is just a higher level of anxiety [on Wall Street], if you can believe it, than there was before. … As we get closer to the [March 17] date, people are going to get more nervous about domestic terrorism activity," Mr. Riley said.
On the economic front, the market was disappointed to hear an elite group of economists cut its growth estimates. Respondents to the Blue Chip Economic Indicators' March poll lowered their forecast for first-quarter gross domestic product growth from an annualized rate of 2.6 percent to 2.2 percent, according to Dow Jones Newswires. The group reduced its growth outlook for the year to 2.6 percent from 2.7 percent.
Blue-chip losses were subsequently widespread.
IBM fell $2.20 to $75.70, Caterpillar declined $1.01 to $44.79 and Wal-Mart stumbled 99 cents to $47.13.
Among other losers, drug maker Bristol-Myers Squibb declined 29 cents to $22.51 after restating earnings for 1999-2001, revising profits down by $900 million because of accounting practices under investigation by prosecutors and regulators.
Nextel Communications fell 90 cents to $11.26 after RBC Capital Markets downgraded it to "sector perform" from "outperform."
Host Marriott declined 28 cents to $6.41 after Morgan Stanley cut its rating to "underweight" from "equal-weight."
Declining issues outnumbered advancers nearly 4-to-1 on the New York Stock Exchange. Consolidated volume was light at 1.55 billion shares, below the already thin 1.66 billion of Friday.
The Russell 2000 index, which tracks smaller company stocks, fell 6.17, or 1.7 percent, to 348.01.
Overseas, Japan's Nikkei stock average finished yesterday down 1.3 percent. In Europe, France's CAC-40 slid 2.4 percent, Britain's FTSE 100 lost 1.6 percent and Germany's DAX index dropped 4.2 percent.

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