- The Washington Times - Monday, March 15, 2004

NEW YORK (AP) — The election of an antiwar government in Spain unnerved the markets yesterday, propelling the Dow Jones Industrial Average more than 130 points lower on fears that terrorists, emboldened by the events in Spain, would strike again.

“The Spain elections certainly have some ramifications on the war on terror, and the political implications aren’t great for the U.S.,” said Jay Suskind of Ryan Beck & Co. “Put that together with the lousy week we had last week, and there’s not much confidence in buying.”

The past week’s selloff brought an end to the market’s yearlong rally, which had started to taper off in mid-February. Resumption of the rally is unlikely for some time, said Russ Koesterich, U.S. equity strategist for State Street Corp.

“There’s been a big reduction in risk appetite over the past few months, and investors are becoming very critical,” Mr. Koesterich said. “The market has discounted a lot of good news, and there’s limited upside ahead. That doesn’t mean you should get out of the market, but the easy money’s behind us.”

The Dow fell 137.19, or 1.3 percent, to 10,102.89, its biggest drop since the 160.07 it lost Wednesday.

Broader stock indicators were also markedly lower. The Standard & Poor’s 500 index was down 16.08, or 1.4 percent, at 1,104.49, and the Nasdaq Composite Index dropped 45.53, or 2.3 percent, to 1,939.20, the biggest drop since Feb. 4.

Yesterday’s session marked the third time in four sessions that the Dow fell more than 100 points, a common occurrence during the bear market but one that Wall Street has not been used to since stocks began their ascent a year ago. Since peaking at 10,737.70 on Feb. 17, the Dow has lost nearly 635 points, or about 6 percent.

The European Commission took another step closer to finding that Microsoft Corp. unfairly abused its monopoly power with its Windows operating systems. A final ruling could come as early as next week unless the company and regulators reach a settlement. Microsoft slipped 22 cents to $25.16.

General Electric Co. fell 30 cents to $30.30 after it announced it would buy bomb-detection company InVision Technologies Inc. for $900 million in cash. InVision jumped $8.13, or 20 percent, to $49.35.

ImClone Systems Inc., narrowed its losses from a year ago but still missed Wall Street estimates by 3 cents. ImClone, the stock at the center of the Martha Stewart conviction, dropped $1.19 to $45.32.

Martha Stewart Living Omnimedia Inc. was down 36 cents at $9.97 after the company announced that Stewart gave up her seat on the board of directors and resigned as chief creative officer.

She will continue to have a creative role within the company.

Nortel Networks Corp. announced it is putting the company’s chief financial officer and its comptroller on paid leave as the board of directors investigates Nortel’s 2003 earnings statements. Nortel fell $1.19 to $5.24.

Declining issues outnumbered advancers by more than 3 to 1 on the New York Stock Exchange, where consolidated volume came to 2.02 billion shares, compared with 1.76 billion on Friday.

Overseas, Japan’s Nikkei stock average closed 1.4 percent higher. European markets fell sharply, however, on terrorism concerns. Britain’s FTSE 100 closed 1.2 percent lower, France’s CAC-40 finished down 2.4 percent and Germany’s DAX index dropped 2.7 percent.

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