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Old 03-17-2003, 04:18 PM   #1
Timber Loftis
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Join Date: July 11, 2002
Location: Chicago, IL
Posts: 11,916
TL's note: y'know, I thought stocks were wavering due to fear that war would occur. Turns out I had it bass ackwards.

P.S. I really hope this isn't a War Forum topic, so mods please forgive me if it is.

Today's NY Times:

Stocks Surge as Start of War Seems Almost Certain
By KENNETH N. GILPIN

Sock prices surged today, as the uncertainty about whether the United States and its allies would prosecute a war against Iraq all but evaporated after officials declared an end to efforts to resolve the crisis under the auspices of the United Nations.

Wall Street's three leading market indexes climbed 3 percent or more. Trading volume was heavy and buying was broad-based. It is the fourth straight day that the major market averages have posted gains.

Until last week, the stock market has been "discounting the uncertainty of when the start date of a war is," said James W. Paulsen, chief investment officer at Wells Capital Management in Minneapolis. "We are removing that."

"This is not so much a statement on the outcome of the conflict," Mr. Paulsen said. "If bad stuff happens, there is probably some downside" to stock prices.

Uncertainty about war "has been a big overhang," said Nick Angiletta, head of over-the-counter trading at Salomon Smith Barney.

"There are a lot of people who have been doing absolutely nothing," in the past weeks and months, he said. "This is an excuse for people to do something."

In the last hour of trading on Wall Street, the Dow Jones industrial average was up 248.25 points, or 3.2 percent, to 8,107.96. The Standard & Poor's 500-stock index was up 25.76 points, or 3.1 percent, to 859.03. And the Nasdaq composite index was up 44.74 points, or 3.3 percent, to 1,385.07.

European markets also posted sharp gains, with stock prices rising more than 3 percent in London and Paris and more than 4 percent in Frankfurt.

Still, it is unclear how much of the price movement today and in recent sessions can be attributed to short sellers, who had been betting that stocks would continue to slide and are now covering their positions, and how much can be attributed to people who are outright buyers of stocks.

"A big part of the downdraft was due to short selling," Mr. Paulsen said. "The only people who have been moving the market have been short traders."

Arthur Hogan, chief market strategist at Jefferies & Company in Boston said there was "probably a pretty fair mix of both real buying and short covering."

"Once this ball starts in motion, nobody wants to get in the way," he said. "But the fact that we are going to war is not a great fundamental reason for the market to rally."

Even as stocks gained, bond prices fell as investors moved money out of the safe haven of Treasury securities. By midafternoon, the Treasury's benchmark 10-year note was down by nearly a point, with the yield rising to 3.81 percent, from 3.70 percent late Friday.

Oil prices also retreated, with crude oil for April delivery falling 39 cents, to $34.99 a barrel, on the New York Mercantile Exchange.

More than two stocks rose in price for every one that fell on the New York Stock Exchange. Gainers outnumbered losers by a ratio of more than three to two on the Nasdaq stock market.

With about an hour left in the trading session, volume on the Big Board totaled about 1.29 billion shares. More than 1.46 billion shares were already traded on the Nasdaq stock market.

Shares of well-known technology names all moved higher, including Microsoft, Intel and I.B.M.

Wal-Mart saw its shares jump 4.5 percent after the world's biggest retailer said sales this month are rising in line with its forecast. The company had estimated an increase in the low "single-digit percentage" range for March.

Among the biggest losers was Isis Pharmaceuticals; its shares tumbled 31 percent after the company and Eli Lilly said their Affinitak cancer medicine combined with chemotherapy failed to help patients live longer than chemotherapy alone. But Lilly's shares moved higher.

While the fog of uncertainty about whether the United States is about to go to war is lifting, the fog of war itself remains, analysts and traders said.

"There are a number of other uncertainties out there," said Phil Orlando, chief investment officer at Value Line Asset Management.

"Will there be a nuclear detonation? Will key oil fields be destroyed? Will there be a terrorist response in the United States or elsewhere in the world? Or if President Bush gives Saddam Hussein a couple of days to abdicate, will he blink and leave?"

Moreover, there are serious unresolved issues relating to the American economy, as well as the challenges — and costs — of a postwar reconstruction effort.

"We think too many people are focused on the fact that Iraq is our only problem," said Paul Hickey, an analyst at Birinyi & Associates, a stock market research firm in Stamford, Conn.

"We don't think that once this war is over the market will be going on its merry way," he said.
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Old 03-19-2003, 11:26 AM   #2
Charean
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Join Date: March 6, 2001
Location: Waxahachie, TX
Age: 59
Posts: 2,201
They are rallying because something happened. There is no real reason to Wall Street.

Of course, oil was down so all the transportation went up.

We will see what next week brings. [img]tongue.gif[/img]
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Old 03-19-2003, 11:29 AM   #3
Donut
Jack Burton
 

Join Date: March 1, 2001
Location: Airstrip One
Age: 39
Posts: 5,571
The markets hate uncertainty. If the war starts prices will go up.
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Old 03-19-2003, 07:01 PM   #4
john
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Join Date: October 6, 2001
Location: central coast of Ca.
Age: 77
Posts: 653
The real reason the market is up is that after watching my retirement money dissapear over the last two years I had my broker sell everything,the next day it all went up!!It never fails.....
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