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Dow fights from 200 drop Original Source Link: (May no longer be active)
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CBS MarketWatch
Dow fights back from 200-point drop
Monday March 31, 1:58 pm ET
By Steve Gelsi
NEW YORK (CBS.MW) -- The Dow Jones Industrial Average tumbled as much as 200 points Monday, but stocks recovered slightly as the first quarter drew to a close amid nagging worries about the war in Iraq and weakness in the economy.
The latest U.S. economic data did little to reassure investors.
The Chicago-area purchasing managers index of manufacturing activity fell from 62.4 percent in February to 49.1 percent in March. The number was weaker than the figure of 51 percent that had been expected by economists. See Economic Report.
In recent action, the Dow (CBOT:^DJI - News) fell 141 points, or 1.7 percent, to 8,004.
The Nasdaq Composite Index (NasdaqSC:^IXIC - News) gave up 22 points, or 1.6 percent, to 1,347. The tech-heavy market gauge hovered near this year's starting point of 1,335 before recovering.
The Standard & Poor's 500 Index (^GSPC - News) dropped 12 points, or 1.4 percent, to 851.
Art Hogan, market strategist at Jefferies & Co., cited acute geopolitical jitters not only over the war, but also on increased fear of terrorism. He cited the latest suicide bombing in Israel.
"You'd expected to see some buying related to window-dressing at the end of the quarter, but we're not seeing that," Hogan said. "The one thing about these down days is that they're low volume sell-offs, with not a great deal of participation."
Nearly all 30 stocks in the Dow Jones Industrial Average headed into the red, with Altria (NYSE:MO - News) , the parent of Philip Morris, leading the way.
Moody's on Monday downgraded corporate debt of Altria amid questions on hefty legal settlements faced by its tobacco business. Shares fell 9 percent to $29.15.
Boeing (NYSE:BA - News) fell 3.3 percent, Hewlett-Packard (NYSE:HPQ - News) shed 3.9 percent and Intel (NasdaqNM:INTC - News) dropped 4.3 percent. Disney (NYSE:DIS - News) shed 3.8 percent.
Johnson & Johnson (NYSE:JNJ - News) rose 60 cents to $57.98 and Procter & Gamble (NYSE:PG - News) added 81 cents to $89.45.
In sector action, Airline stocks (AMEX:^XAL - News) fell 0.2 percent, as the sector gained altitude from lows earlier in the session on buoyant developments on American Airlines parent AMR Corp. (NYSE:AMR - News) .
Shares of the airline rocketed 39 percent to $2.20 as the airline announced a pact with its mechanics union in a last ditch attempt to avoid bankruptcy.
Computer software (CBOE:^GSO - News) shed 2.1 percent, Internet stocks (CBOE:^GIN - News) gave up 3.6 percent and semiconductor stocks (CBOE:^GSM - News) fell 3.8 percent. Gold (CBOE:^GOX - News) rose 1.3 percent.
At UBS Warburg, economist Maury Harris said the economy and the stock market likely will pick up over the longer term if the war is resolved soon. Meanwhile, uncertainty remains high.
"Barring quick U.S.-led victory, we believe near-term risks for the economy are on the down side," Harris said in a note to clients. An old adage on Wall Street is that investors hate uncertainty, but that's what continues to face stocks nowadays.
In the U.S., May crude futures rose to nearly $31 a barrel. See Futures Movers.
April gold futures jumped above the $337 mark as traders bet on a longer war with Iraq. See Metals Stocks..
The dollar fell 1 percent vs. euro at $1.0886. It's down 1 percent vs. the yen at 118.60.
Bonds rose as investors steered money into fixed income securities as a haven from war.
Wachovia (NYSE:WB - News) fell 25 cents to $34.27 after the bank said the Securities and Exchange Commission is conducting an investigation into stock purchases of First Union and Wachovia shares from 1996 to 2001, with a focus on purchases following the merger announcement in April 2001. The company said it believes all purchases were in compliance with law, and assured that the probe does not pertain to Wachovia's financial reporting or to insider trading. The company also raised its EPS forecast slightly.
AOL Time Warner (NYSE:AOL - News) fell 37 cents to $10.98. AOL said it may have to restate up to $400 million in ad revenue for the past two years, according to the company's annual report filed Friday with the Securities and Exchange Commission.
AOL said in the filing the SEC staff has expressed to the company its preliminary view that at least some portion of the revenue recognized by the company for advertising should have been treated as a reduction in the purchase price paid by the company rather than as advertising revenue.
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