- The Washington Times - Monday, March 22, 2004

NEW YORK (AP) — Investors increasingly worried about terrorism extended Wall Street’s sharp decline into another week yesterday, selling stocks across the market and giving the Dow Jones Industrial Average its fifth triple-digit drop in the past nine sessions.

The blue chips came close to breaching 10,000 for the first time since Dec. 12 after Israeli troops killed the leader of the Palestinian group Hamas early yesterday. Hamas has promised retaliation against Israel and the United States.

The turbulence in the Middle East discouraged equity investors already uneasy about a slow economic recovery and tepid job growth. Wall Street was also worried about decreased consumer spending in reaction to rising oil prices.

“The geopolitical situation is dominating the markets, but it’s a very strange thing because there’s no way to quantify it,” said Peter Dunay, chief market strategist at Wall Street Access. “It definitely puts investors on edge. They’ve already factored in a lot of future positives, and when that’s threatened, they react.”

The Dow Jones Industrial Average finished the session down 122 points, or 1.2 percent, at 10,065. The index fell as low as 10,012 in afternoon trading. The Dow came off a 53-point loss last week, and has lost 673 points, or 6.3 percent, since its recent high of 10,738 on Feb. 17.

Broader stock indicators were also sharply lower. The Standard & Poor’s 500 index fell 14 points, or 1.3 percent, to 1,095, closing below the 1,100 mark for the first time since Dec. 26. The Nasdaq Composite Index was down 31 points, or 1.6 percent, at 1,910. The Nasdaq has fallen eight of the past nine weeks. It last closed below 1,900 on Nov. 21.

The declines cut across every sector, with technology shares particularly hard hit because of turmoil over the presidential election in Taiwan, where some of the strongest technology manufacturers are based. Airlines’ stocks also fell sharply with downgrades from brokerage houses, worries about a drop in travel in reaction to terrorism and rising fuel prices.

With no major economic news expected until week’s end and first-quarter earnings still a month away, the markets were particularly susceptible to bad news abroad. Corporate fundamentals and the underlying economy remain solid, but investors probably will need a string of better-than-expected economic data and earnings to pull out of the correction that kept the major indexes down for the past few weeks.

“Today it’s terrorism, yesterday it might have been oil prices,” said Hugh Johnson, chief investment officer at First Albany Corp. “Every day now, there’s a reason to worry that forecasts for the economy and earnings are just too optimistic, and tomorrow it’s going to be something else.”

Some analysts were looking forward to Thursday’s gross domestic product figure and first-time jobless claims, hoping to find reasons to remain bullish about the economy. A report on payroll growth, expected April 2, could be pivotal in shoring up shares — or causing another drop-off.

“If we get any evidence job growth is picking up, that’ll make people [feel] a lot better,” said Chip Dickson, equities analyst with Lehman Brothers. “Until then, I don’t expect a lot of conviction in this market either way.”

Declining issues outnumbered advancers by nearly 4 to 1 on the New York Stock Exchange, where consolidated volume came to 1.83 billion shares, compared with 1.80 billion Friday.

The Russell 2000 index of smaller companies dropped 12 points, or 2.1 percent, to 559.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide