- The Washington Times - Monday, June 28, 2004

NEW YORK (AP) — Economic uncertainty overshadowed a peaceful and early transfer of power in Iraq yesterday, cutting off a rally and leaving stocks modestly lower while investors fretted about the Federal Reserve’s imminent decision on interest rates.

Investors had worried that the transfer in Iraq would be sabotaged by terrorists, and were cheered at the surprise move, which was originally scheduled for tomorrow. Oil prices also fell sharply on the news, further boosting stocks.

However, investor enthusiasm waned in anticipation of the Fed meeting today and tomorrow, and in response to a strong consumer spending report that fueled inflation worries. The Dow Jones Industrial Average fell 14.75, or 0.1 percent, to 10,357.09. The Dow had been up as much as 92 points earlier in the session.

Broader stock indicators were modestly lower. The Standard & Poor’s 500 Index was down 1.08, or 0.1 percent, at 1,133.35, and the Nasdaq Composite Index dropped 5.65, or 0.3 percent, at 2,019.82.

Wal-Mart Stores Inc. cut its second-quarter sales forecasts before the session, blaming bad weather and a slow Father’s Day. The company said same-store sales would rise just 2 percent to 4 percent, down from the 4 percent to 6 percent previously forecast. Wal-Mart slid 5 cents to $52.46.

Watson Pharmaceuticals plunged $4.80 to $27.49 after the company said it would miss earnings forecasts in the second quarter because of slow sales of its oral contraceptive products.

Canadian news publisher Thomson Corp. said it would buy Information Holdings Inc., a provider of patent and regulatory information, for $441 million. Thomson was down 31 cents at $31.98, while IHI was up $1.13 at $27.57.

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