Dow Dive Aided by Trading Error

Other Notes and Notables

Prior to the final-hour scramble, traders focused on news of a resolution by the House giving President Bush the authority to oust Iraqi leader Saddam Hussein without U.N. authorization, the ongoing shutdown of West Coast ports, as well as some comments by various financial luminaries.

"I don't think excessive disinflation is a clear and present danger but whereas this possibility wasn't even on radar screens in past recoveries, it is in the range of plausible risks now," Richmond Fed president Alfred Broaddus said in a speech Wednesday, according to wire service reports.

Broaddus stressed a belief that forecasts for moderate economic growth and benign inflation as being "the most likely outcome over the next six quarters," but admitted there was an unusual amount of uncertainty in, and downside risk to, the economy.

In a separate but related development, Bill Gross, managing director at bond-fund giant Pimco, addressed the "deflationary/reflationary tug of war" in a report on the firm's Web site. You can find it here.

On a micro note, stocks were pressured by profit warnings from Dow Chemical , which fell 8.6% and dragged down shares of DuPont , as well as Comerica (CMA), which lost 20.3%.

Additionally, Morgan Stanley reduced targets for Citigroup (C), Merrill Lynch (MER) and Lehman Brothers (LEH), helping send the Amex Broker/Dealer Index down 2.9%, while UBS Warburg cut revenue estimates on Cisco (CSCO), which fell 8.4%.

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