Updated from 8:37 a.m. EDT
The assassination of the president of the Iraqi governing council in Baghdad sent oil prices soaring and world stock markets sharply lower, with the
opening at a new low for the year.
The Dow fell 103 points, or 1%, to 9910, the
dropped 10 points to 1085, and the
lost almost 27 points to 1877. The 10-year Treasury note, reprising its role as a safe haven amid world turmoil, was up 6/32 to yield 4.74%, while the dollar was sharply lower against the yen and euro.
The situation with oil prices turned dire Monday after Iraqi governing council president Abdel-Zahraa Othman, also known as Izzadine Saleem, was killed, along with three other Iraqis, in a car bombing in central Baghdad. The killing, which comes about 45 days before the scheduled transfer of power to an Iraqi interim government June 30, sent June oil futures up about 1% to $41.75 a barrel in London.
Othman was the second member of the governing council to be killed since it was set up in July.
London Brent crude futures were up 64 cents to $38.50 a barrel. Overseas markets were selling off, with London's FTSE down 1.3% to 4384 and Germany's Xetra DAX losing 1.9% to 3731. In Asia, Japan's Nikkei closed down 3.2% to 10,505 and Hong Kong's Hang Seng lost 2.8% to 10,968.
Also, India's stock market suffered the largest loss of its 129-year history, according to the
. The benchmark index of the Bombay Stock Exchange, the Sensex, dropped to 4282.98, down 15.5%, before trading was suspended for the second time of the session as investors panicked amid questions of how communist parties would influence the incoming government of Sonia Gandhi, the new prime minister. The index rebounded some after trading resumed for the third time, and the Sensex closed 11.1% lower at 4509.69 after state-run financial institutions were reportedly asked by the finance ministry to buy heavily into the market to help reverse the fall.
The assassination in Iraq thrust world violence back into the spotlight after a volatile week in which the Dow Jones Industrial Average was repeatedly buffeted by world politics and the threat of an interest rate hike, falling 104 points, or 1%, to 10,012 over the five sessions. The S&P 500 fell 3 points to 1095 last week, while the Nasdaq Composite dropped 13 points to 1904.
Also pressuring futures Monday were several reports over the weekend questioning how much the Bush administration knew about the treatment of Iraqi prisoners of war.
The New Yorker
magazine reported that Defense Secretary Donald Rumsfeld encouraged some of the harsh treatment as a means of gathering intelligence. A
story said White House counsel Alberto Gonzales prepared a memo in the aftermath of Sept. 11 that argued that a "new paradigm" of terrorism rendered the Geneva Convention's enemy prisoner provisions "obsolete."
In corporate news,
continued on its recent acquisition binge, agreeing to pay $1.1 billion of natural gas and oil fields from
. ChevronTexaco will part with 150 onshore properties in seven U.S. states, most of them in New Mexico and Texas.
Home improvement retailer
said first-quarter earnings rose to $455 million, or 57 cents a share, in the first quarter, up from $421 million, or 53 cents a share, last year. Analysts had been forecasting earnings of 54 cents a share in the latest quarter. Lowe's benefited from a 9.9% jump in same-store sales amid strong real estate markets.
lowered its hostile cash tender offer for
by 19%, saying it was warranted given the recent decline of the target's share price.
No major economic releases are scheduled for Monday.