Stocks Advance as Hopes
For a Quick War Swell
By ERIN SCHULTE AND STACY FORSTER
THE WALL STREET JOURNAL ONLINE
The minute-by-minute updates out of Iraq were good news to Wall Street – which is banking on a quick, relatively bloodless and successful war – and blue chips headed higher for an eighth-straight session Friday.
Stocks raced higher as U.S. and U.K. forces started what is believed to be the "shock and awe" phase of the military campaign, launching massive air strikes on Baghdad by early afternoon. The Dow Jones Industrial Average jumped 158 points, while the Nasdaq Composite Index rose 15.40 points.
Blue chips were moving steadily higher throughout the day as news trickled in from Iraq; investors reacted positively to a report that U.S. Marines had taken control of Umm Qasr, a vital Iraqi port, and that significant numbers of Iraqi troops had surrendered.
Larry Wachtel, market strategist at Prudential Securities in New York, said with the war progressing successfully, some investors were optimistic that the campaign could reach Baghdad by Monday.
So far, worries that could waylay a rally remain unfounded.
"A lot of people were concerned there might be counterattacks, missile attacks in Israel, terrorist activity here or abroad or stiff resistance from Iraqi military that might bog us down," said Steve Massocca, head of trading at Pacific Growth Equities in San Francisco. "None of that seems to be happening."
Investors are expected to trade in the next few sessions on minute-by-minute developments overseas. Stocks have surged in the past week on anticipation of a quick war, but could see declines if the conflict shows signs of becoming prolonged.
Thus far, though, the market has kept its faith in the war, with stocks posting a seventh straight day of gains on Thursday -- the first full day of war. Still, moves were erratic, and advances have been gradual as investors anxiously watch the wires for the latest developments.
The Dow industrials -- after sinking about 135 points in morning activity -- ended Thursday up 21.15 points, while the technology-heavy Nasdaq Composite Index advanced 5.70 points.
Commodities and foreign-exchange trading also seem to indicate that investors are hopeful about what's happening in Iraq; oil prices have tumbled and continued to slide on Friday, and the dollar rallied. Front-month Nymex crude has fallen more than $12 a barrel since its Feb. 27 high of $39.99.
Meanwhile, in economic news early Friday, the Labor Department said U.S. consumer prices increased 0.6% in February -- the fastest pace in two years as war jitters drove up gasoline prices. However, evidence of general inflation remained scant.
Most forecasters aren't worried that inflation will flare out of control this year. U.S. economic growth has fizzled because businesses are reluctant to invest amid uncertainties about the risks of war with Iraq. Indeed, the Federal Reserve has said the economy won't accelerate much until the outcome of the war becomes clear.
Among stocks to watch Friday was Electronic Data Systems, which ousted its chairman and chief executive, Richard Brown, and named former CBS chief Michael H. Jordan to the top spot. The moves follow a tumultuous period in which the world's No. 2 computer-services company has been dogged by poor results, a misplaced bet on its own stock, and lingering questions about its accounting for revenue. Its shares rose 10.2%.
Intuit tumbled 22% after it cut its fiscal 2003 earnings estimate due to the economic slowdown. The tax-software company said it experienced a slower start to its consumer tax season this year, causing slower growth in that category.
In major U.S. market action:
Stocks rose. On the Big Board, where 1.02 billion shares traded, 2,208 stocks rose and 963 fell. On the Nasdaq, where 1.10 billion shares traded, 1,860 stocks advanced and 1,111 declined.
Bonds sank. The 10-year Treasury note lost 1 1/8 point. The yield, which moves inversely to price, rose to 4.09%. The 30-year bond fell 1 21/32 to yield 5.04%.
The dollar rallied. It traded at ¥121.80, up from ¥120.21 late Thursday in New York, while the euro fell against the dollar to $1.0510 from $1.0618.
Updated March 21, 2003 1:26 p.m.
For a Quick War Swell
By ERIN SCHULTE AND STACY FORSTER
THE WALL STREET JOURNAL ONLINE
The minute-by-minute updates out of Iraq were good news to Wall Street – which is banking on a quick, relatively bloodless and successful war – and blue chips headed higher for an eighth-straight session Friday.
Stocks raced higher as U.S. and U.K. forces started what is believed to be the "shock and awe" phase of the military campaign, launching massive air strikes on Baghdad by early afternoon. The Dow Jones Industrial Average jumped 158 points, while the Nasdaq Composite Index rose 15.40 points.
Blue chips were moving steadily higher throughout the day as news trickled in from Iraq; investors reacted positively to a report that U.S. Marines had taken control of Umm Qasr, a vital Iraqi port, and that significant numbers of Iraqi troops had surrendered.
Larry Wachtel, market strategist at Prudential Securities in New York, said with the war progressing successfully, some investors were optimistic that the campaign could reach Baghdad by Monday.
So far, worries that could waylay a rally remain unfounded.
"A lot of people were concerned there might be counterattacks, missile attacks in Israel, terrorist activity here or abroad or stiff resistance from Iraqi military that might bog us down," said Steve Massocca, head of trading at Pacific Growth Equities in San Francisco. "None of that seems to be happening."
Investors are expected to trade in the next few sessions on minute-by-minute developments overseas. Stocks have surged in the past week on anticipation of a quick war, but could see declines if the conflict shows signs of becoming prolonged.
Thus far, though, the market has kept its faith in the war, with stocks posting a seventh straight day of gains on Thursday -- the first full day of war. Still, moves were erratic, and advances have been gradual as investors anxiously watch the wires for the latest developments.
The Dow industrials -- after sinking about 135 points in morning activity -- ended Thursday up 21.15 points, while the technology-heavy Nasdaq Composite Index advanced 5.70 points.
Commodities and foreign-exchange trading also seem to indicate that investors are hopeful about what's happening in Iraq; oil prices have tumbled and continued to slide on Friday, and the dollar rallied. Front-month Nymex crude has fallen more than $12 a barrel since its Feb. 27 high of $39.99.
Meanwhile, in economic news early Friday, the Labor Department said U.S. consumer prices increased 0.6% in February -- the fastest pace in two years as war jitters drove up gasoline prices. However, evidence of general inflation remained scant.
Most forecasters aren't worried that inflation will flare out of control this year. U.S. economic growth has fizzled because businesses are reluctant to invest amid uncertainties about the risks of war with Iraq. Indeed, the Federal Reserve has said the economy won't accelerate much until the outcome of the war becomes clear.
Among stocks to watch Friday was Electronic Data Systems, which ousted its chairman and chief executive, Richard Brown, and named former CBS chief Michael H. Jordan to the top spot. The moves follow a tumultuous period in which the world's No. 2 computer-services company has been dogged by poor results, a misplaced bet on its own stock, and lingering questions about its accounting for revenue. Its shares rose 10.2%.
Intuit tumbled 22% after it cut its fiscal 2003 earnings estimate due to the economic slowdown. The tax-software company said it experienced a slower start to its consumer tax season this year, causing slower growth in that category.
In major U.S. market action:
Stocks rose. On the Big Board, where 1.02 billion shares traded, 2,208 stocks rose and 963 fell. On the Nasdaq, where 1.10 billion shares traded, 1,860 stocks advanced and 1,111 declined.
Bonds sank. The 10-year Treasury note lost 1 1/8 point. The yield, which moves inversely to price, rose to 4.09%. The 30-year bond fell 1 21/32 to yield 5.04%.
The dollar rallied. It traded at ¥121.80, up from ¥120.21 late Thursday in New York, while the euro fell against the dollar to $1.0510 from $1.0618.
Updated March 21, 2003 1:26 p.m.
