|
Stocks hit 2004 lows Original Source Link: (May no longer be active)
http://news.myway.com/top/article/id/64931|top|05-17-2004::16:47|reuters.htmlhttp://news.myway.com/top/article/id/64931|top|05-17-2004::16:47|reuters.html
Stocks Hit 2004 Lows on Iraq, Oil Prices
May 17, 4:42 PM (ET)
By Vivian Chu
NEW YORK (Reuters) - Stocks sank on Monday, with all three major market gauges falling to their lowest levels this year, after the killing of a key figure in Iraq's new government increased investors' worries about geopolitical instability and helped push U.S. oil futures prices to their highest levels in 21 years of New York trading.
Citigroup Inc. and Microsoft Corp. were the biggest drags on the Standard & Poor's 500 Index. Weakness in Qualcomm Inc. and Microsoft held back the technology-laden Nasdaq, which fell to a low unseen since October 2003.
Surging oil prices continued to rattle investors, who worried that escalating energy prices would hurt consumer spending, one of the drivers of the economy's recovery. Crude oil futures ended higher in New York on Monday, but had retreated from the record high of $41.85 a barrel hit in overnight trading.
"My big concern a few weeks ago was the stock market was too focused on interest rates, but clearly it's now focused on instability in the Mideast, which is leading to higher oil prices," said Robert Mikkelsen, senior managing director of equity capital markets at The Advest Group.
However, "volume looks like it's going to come in below average, which leads me to believe a lot of investors are sitting on the sidelines," Mikkelsen said. "In the short term, I still expect to see a high level of fear and nervousness."
The Dow Jones industrial average ended down 105.96 points, or 1.06 percent, at 9,906.91, while the broader S&P 500 Index fell 11.62 points, or 1.06 percent, at 1,084.08. These mark the lowest closing levels for both the Dow and S&P 500 since December 2003.
The Nasdaq Composite Index slid 27.61 points, or 1.45 percent, to 1,876.64, its lowest finish since last October.
U.S. Treasury bond prices rallied in response to the violence in Iraq as investors bought safe-haven government debt, pushing down the yield on the benchmark 10-year note to 4.69 percent from Friday's close of 4.77 percent.
The major stock indexes rose from their session lows in mid-morning trading after the U.S. military reported an artillery shell had exploded in Iraq, releasing a small amount of the nerve agent sarin. It was the first news of the discovery of any of the weapons on which the Bush administration made its case for war.
"It's probably a relief reaction, since it may give credence to the argument over weapons of mass destruction that the Bush administration made for going to Iraq," said Brian Bush, research director at Stephens Inc., in Little Rock, Arkansas. "We're under such scrutiny worldwide. Any news that would elevate the U.S. standing is positive."
Trading was active, with 1.43 billion shares changing hands on the New York Stock Exchange, higher than the 1.4 billion daily average for last year. About 1.53 billion shares were traded on Nasdaq, below last year's 1.69 billion daily average.
Lucent Technologies topped the New York Stock Exchange's most active list, falling 18 cents, or 5.5 percent, to $3.10. On Monday, the U.S. Securities and Exchange Commission said it charged 10 individuals with securities fraud for their roles in accounting problems at the telecom equipment maker.
Lucent also finalized a previous settlement with the SEC and will pay a $25 million civil penalty in the case for failure to cooperate with government investigators. The SEC had accused Lucent of fraudulently and improperly recognizing revenue.
Lowe's Cos. shares fell, even after it reported its quarterly profit rose, helped by sales of higher-priced items like kitchen cabinets, and an expansion into big U.S. cities.
Shares of Lowe's, the world's No. 2 home improvement retailer after Home Depot Inc., fell 90 cents, or 1.8 percent, to $49.68 amid concerns that high energy prices and rising interest rates may hurt home improvement spending, analysts said.
But Kmart Holding Corp. rallied, after the discount retailer posted its second straight quarterly profit as it cut costs, though sales tumbled after it closed hundreds of stores last year.
Shares of Kmart, which emerged from bankruptcy last May with a new management team, fewer stores and lower debt, jumped $4.32, or 9.8 percent, to $48.62.
Security concerns took center stage after a suicide car bomb killed the president of Iraq's Governing Council on Monday, dealing a major blow to the U.S. coalition battling a Shi'ite insurgency and a growing prisoner abuse scandal.
Crude oil for June delivery settled at $41.55 a barrel, up 17 cents, but below a $41.85 record high in overnight trading, which was the highest price since the New York Mercantile Exchange introduced oil futures trading in 1983.
Gasoline prices also shot up to another intraday record high of $1.4250 a gallon for the NYMEX June contract, amid persistent concerns about gasoline supply and Middle East unrest. Instability in the Mideast has fed fears of possible disruptions of oil supplies from the region, traders said.
The spike in oil rippled through global stock markets, sending European stock markets to their worst close in almost two months and slamming shares in Tokyo and Hong Kong.
|
|
