The Associated Press
NEW YORK - Fears of war with Iraq pummeled Wall Street on Monday, pushing the Dow Jones industrials below the 8,000 level for the first time in three months and sending the overall market lower for the seventh time in eight sessions.
Investors also were cautious ahead of President Bush's State of the Union address today.
The Dow closed down 141.45, or 1.7 percent, at 7,989.56. The blue chips last traded below 8,000 on Oct. 15 and last closed below Monday's close Oct. 14, when they stood at 7,877.40.
The Dow suffered its fifth triple-digit decline in six sessions and its seventh loss in eight sessions. In eight sessions, the Dow dropped 853 points, more than wiping out all of its 2003 gains.
The broader market also pulled back sharply. The Nasdaq Composite Index fell 16.87, or 1.3 percent, to 1,325.27. The Standard & Poor's 500 Index fell 13.92, or 1.6 percent, to 847.48, having fallen Friday, as the Dow did, to levels last seen in October.
"The public at large is shunning equities. This is traditionally the time when money comes into equities, into retirement accounts. So, this is disturbing," said Stephen Massocca, president of Pacific Growth Equities. "People are concerned about Iraq, but I think there is a deeper concern about the state of the economy, the state of the markets. There is a kind of bear market malaise."
Investors are worried that war with Iraq would come as a particularly hard blow. One concern is that higher oil prices would result and would eat away at corporate profits. Another worry is that consumers would curtail their spending, which accounts for two-thirds of the economy.
Both consumer cyclical stocks, such as retailing and automobile issues, and oil stocks traded lower on investors' war fears. Retailer Kohl's fell $1.25 to $52.50, General Motors declined 56 cents to $36.99 and Exxon Mobil stumbled 87 cents to $31.82.
"The confrontation (with Iraq), even though anticipated, is still an expensive matter and one with an uncertain outcome. So, the markets are on edge," said A.C. Moore of Dunvegan Associates in Santa Barbara, Calif.
Overseas, Japan's Nikkei stock average finished Monday down 1.4 percent. In Europe, France's CAC-40 slid 3.6 percent, Britain's FTSE 100 dropped 3.4 percent and Germany's DAX index lost 2.7 percent.
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