It's the fundamentals.... high corporate debt, inflated PE ratios, sinking dividends, non-existent profits and foreign investors taking flight.... Now that is the recipe for a market crash. It's is going to get exceedingly hard for the
If Nasdaq takes a similar path of the DJIA of 1929, then we still have a long way to go down. Interesting comparison graph at http://www.zealllc.com/2002/1929.htm.
Steven
-----Original Message----- From: owner-lbo-talk at lists.panix.com [mailto:owner-lbo-talk at lists.panix.com] On Behalf Of Doug Henwood Sent: Wednesday, February 05, 2003 2:23 PM To: lbo-talk Subject: Stocks Fade as War Worries Weigh
<http://www.reuters.com/financeNewsArticle.jhtml?storyID=2176961&type=bu sinessNews&fromEmail=true>Stocks Fade as War Worries Weigh Wed February 05, 2003 04:49 PM ET
By Chelsea Emery
NEW YORK (Reuters) - Stocks sagged on Wednesday as worries about possible war with Iraq unnerved investors, erasing a rally sparked by Secretary of State Colin Powell's speech to the United Nations Security Council.
Powell's presentation, a bid to win over anti-war sentiment at home and abroad as well as among governments, included satellite photos and covertly taped conversations that he said showed that Iraq was hiding banned weapons from inspectors.
Stocks climbed during the address as investors hoped the evidence would convince other nations to support military action, but the market took a tumble after Iraq's information minister said the allegations were "hollow" and envoys from such key countries as France, Russia, China and Germany remained leery of war and hoped inspections would continue.
Iraq's defiant rebuttal added to jitters that war with Iraq may be longer and more costly than earlier anticipated, investors said. Already, major market gauges have fallen for the year as companies and consumer hold off spending, hurting corporate profits.
"This (war) is not going to be easy. It's not going to be short and it's not going to be limited," said Hugh Johnson, chief investment officer at First Albany Corp.
The blue-chip Dow Jones industrial average erased a 1.6 percent gain to fall 28.11 points, or 0.35 percent, to 7,985.18. The broader Standard & Poor's 500 Index gave up 4.61 points, or 0.54 percent, at 843.59. The technology-laced Nasdaq Composite Index, which had gained more than 2 percent, closed down 4.67 points, or 0.36 percent, at 1,301.48.
Declining stocks beat out advancers by a ratio of 9 to 7 on the New York Stock Exchange and Nasdaq. Trading was moderate, with 1.42 billion shares changing hands on the Big Board, and 1.35 billion traded on Nasdaq.
"There was some general optimism over Powell's speech, and that's rapidly dissipating into reality again -- the fact that we're probably going to load up the ships and start pointing the guns pretty soon," said Tony Cecin, head of equity trading at U.S. Bancorp Piper Jaffray.
Adding to worries about geopolitical instability, North Korea said it had restarted the atomic facilities at the center of its suspected nuclear weapons program.
"People are starting to sense that (North Korea) is more of a threat than even the administration is letting on," said Keith Keenan, vice president of institutional trading at brokerage Wall Street Access.