- The Washington Times - Wednesday, March 19, 2003

NEW YORK (AP) Wall Street waited with the rest of the world yesterday. Stocks managed a fifth straight advance, but in light, relatively even trading as investors cast a wary eye toward impending war in Iraq.
After a stunning four-day rally, investors turned cautious over concerns about Iraq and disappointment at the Federal Reserve Board's decision to hold interest rates steady at their current 41-year low.
The Dow Jones Industrial Average closed up 52.31, or 0.6 percent, at 8,194.23 after falling no more than 45.80. In the previous four sessions, the Dow rose by 617.86 points.
The broader market also ended higher. The Nasdaq Composite Index rose 8.28, or 0.6 percent, to 1,400.55. The Standard & Poor's 500 index advanced 3.66, or 0.4 percent, to 866.45.
"What we are having is a tug of war between people who are latching onto the certainty of what to expect over the next few days … and by the somewhat more negative people, who would say while the outcome is more certain, it is not something to look forward to," said Jack Caffrey, an equities strategist at J.P. Morgan Private Bank.
But it was largely a day of waiting.
Trading volume was light at 1.54 billion shares, below Monday's 1.69 billion, as the clock ticked on President Bush's notice to Saddam Hussein to surrender power by tonight or face a massive military invasion. The Iraqi leader rejected the ultimatum.
Investors had hoped for some spark from the Federal Reserve, running up a decent advance in anticipation that the Fed would reduce the key federal funds rates by 0.25 percentage point or at least change its bias toward future rate cuts.
But the Fed, which has cut rates 12 times since early 2001, left rates unchanged and kept its bias "neutral." It said all the uncertainties surrounding Iraq made it impossible to assess the risks to the fragile economy.
Stocks have been rallying since last week on investors' optimism that war will be short-lived and successful and a confidence boost to spur business and consumer spending. Analysts have said, however, that stocks will have a difficult time holding onto gains as long as there is uncertainty about war.
Yesterday's data on the economy was downbeat as the Commerce Department reported that new housing construction plunged by 11 percent in February, the sharpest decline in nearly a decade.
Among the market's winners, LaBranche rose $1.66 to $20.01 after Raymond James upgraded the trading-specialist firm to "outperform."
Applied Materials advanced 41 cents to $13.54 after the chip-equipment maker announced a restructuring plan that including cutting its work force by 14 percent, or 2,000 employees.
But home builders subsequently traded lower. Centex fell 26 cents to $52.34.
Among other losers, ConocoPhilips slipped 8 cents to $50.92 after First Albany downgraded the oil and gas company to "sell."
Advancing issues had a narrow lead of 15 to 14 over decliners on the New York Stock Exchange. Trading volume was light.

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