- The Washington Times - Tuesday, March 25, 2003

NEW YORK, March 25 (UPI) — Stock prices on the New York Stock Exchange and the Nasdaq Stock Market were higher in cautious trading at midday Tuesday, as investors attempted to get a clearer picture of how the war with Iraq was proceeding.

The blue-chip Dow Jones industrial average, which plunged 307.29 points Monday, was ahead 64.50 points to 8,279.10. The tech-heavy Nasdaq composite index, which sank 52.06 points in the previous session, was ahead 17.71 points to 1,387.49.

The broader New York Stock Exchange composite index was ahead 56.40 to 4,857.98, the Standard & Poor's 500 index was ahead 9.23 to 873.46, the American Stock Exchange composite index was ahead 2.92 points to 820.37 and the Wilshire 5000 Index was ahead 95.35 to 8,275.80.

Big Board volume dropped to an estimated 571 million shares from 712 million shares during the same period Monday; Nasdaq volume rose to an estimated 547 million shares from 522 million shares.

Bryan Piskorowski, first vice president at Prudential Securities, said: "Following Monday's potential prolonged war pummeling presented to stocks, the averages are taking a more even-keeled tack Tuesday, though only the tape will tell.

"With coalition troops only 50 miles away from Baghdad, real time war footage will continue to dominate the scene. More sandstorms and chatter that the Republican Guard is prepared to use chemical weapons tops the list of current events. In giving back about one-third of the war rally's gains in one day, it is clear that speculation is alive and well here on the Street of Dreams. Yesterday's retracement has skimmed off some of this overbought froth, setting up for a more two-sided affair in today's action," Piskorowski said.

"It's hard to give an encore performance to the best weekly gain in 20 years in a raging bull market. Throw a war into the mix and you are more likely to get a reversal of fortunes like the ones we saw Monday," he added.

Stocks traded mixed following Monday's sell-off, as investors braced for what is expected to be a tough battle in Baghdad.

The Dow Jones Industrial Average sank 3.6 percent on Monday as a weekend of discouraging war news sparked fears among investors that the conflict might be longer and tougher than anticipated.

There was also some profit-taking after an eight-day rally — including the best weekly performance for stocks since 1982.

The economic picture also took a back seat to the war. The Conference Board said its consumer confidence index sank to 62.5 in March from 64.8 in February, in line with expectations for 62.0.

The slide followed a sharp drop in the index in February, when the index plunged 15 points to its lowest level since 1993, due to weak labor markets, rising fuel costs, and threats of war and terrorism.

Though much of the drop in March confidence was likely due to war concerns, the results for the most part reflect attitudes before the war began. According to the board, the survey period ended March 20, only one day after the war started.

In other news, February existing home sales fell 4.3 percent to an annual rate of 5.84 million, about in line for expectations of a drop to a 5.8 million rate that economists had expected because of blizzards that hampered shopping.

Bond prices rose as the dollar weakened again. Investors have been shifting back into bonds and gold, seen as relatively safer investments. Treasury prices enjoyed their best gains in four months on Monday, sending the yield on the key 10-year note, which falls as prices rise, to below 4 percent once again. The dollar declined from its recent rally.

Tuesday, the 10-year bond added 2/32 to 99 10/32. Its yield, which moves in the opposite direction of its price, eased to 3.96 percent from 3.97 percent late Monday.

In Europe, stock prices ended higher in London, Frankfurt and Paris. The London International Stock Exchange's blue-chip FTSE-100 index rose 28.7 points, or 0.8 percent, to 3,772.0. The German DAX index rose 74.49 points, or 2.9 percent, to 2,622.86 and the French CAC-40 index rose 68.94 points, or 2.5 percent, to 2,795.79.

Analysts said European stocks rose as investors bought shares in defensive sectors such as utilities, and as progress in the war in Iraq was relatively free of surprises.

In Asia, prices ended lower on the Tokyo Stock Exchange as local investors tracked Wall Street's meltdown from Monday amid concerns a prolonged war in Iraq would chill the global economy. Japan's Nikkei Stock Average plummeted 196.31 points, or 2.3 percent, to 8,238.76.

Other Asian markets also lost ground as investors worried about a prolonged war in Iraq and the plunge on Wall Street on Monday.

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