Bloomberg :
(© 2002 The International Herald Tribune, November 9, 2002)
Wall Street hit by fears of Iraq war
NEW YORK Stocks fell Friday, as investors grew more
doubtful about whether can
extend its four-week rally after the United Nations
approved a resolution against Iraq
and McDonald's issued a downbeat outlook.
Trading was choppy as investors continued to digest
a busy week of news, including
the midterm elections. Many were also still reacting
to the Federal Reserve's
surprisingly large half-point cut in interest rates
on Wednesday, analysts said.
"Investors are worried the economy isn't turning
around like we had expected," said
Matt Brown, a fund manager at Wilmington Trust.
In late trading, the Dow Jones industrial average
was down 75.60 points, or 0.9
percent, at 8,510.64, after dropping 184 points
on Thursday. The Nasdaq composite
index fell 17.40 points, or 1.3 percent, to 1,359.31.
The Standard Poor's 500 index
dropped 9.24 points, or 1 percent, to 893.41. All
three main indexes were slightly
lower on the week.
"Iraq will weigh on the market until we have some
sort of indicator of how it will play
out," said Kathy Cole Dodd a fund manager with Banc
One Investment Advisors in
Columbus, Ohio. "The market had so many other things
to think about this week, the
pressures from Iraq weren't at the forefront, and
today brought them back."
"It's very hard to get any sustainable rally with
that negative cloud out there," Brown
said, referring to the Iraq situation. "I think
the volatility is here to stay. But the outlook
for us is that stocks are still better than bonds
over the next year."
McDonald's said it would not meet its 2002 earnings
target and will close 175
restaurants. (Page 11)
The McDonald's warning "says this recovery is going
to be slower and come in more
fits and starts," said Tony Cecin, director of institutional
trading at US Bancorp Piper
Jaffray.
Losses were limited, analysts said, by an underlying
investor optimism following a
four-week market rally on better-than-expected earnings.
Since hitting a five-year low
on Oct. 9, the Dow has gained about 18 percent.
Three stocks fell for every two that rose on the
New York Stock Exchange and the
Nasdaq Stock Market.
Among the gainers, Research In Motion rose $3.24
to $16.30 after the company's
software was chosen to provide e-mail features in
telephones made by Nokia.
Eli Lilly rose $2.97 to $61.95. The maker of the
antidepressant Prozac said three of its
most promising experimental medicines were unaffected
by Food and Drug
Administration questions about manufacturing at
two Indianapolis plants. Lilly needs
new drugs to offset Prozac sales lost to generics.
(AP, Bloomberg)