Stocks Fall Hard at Open

An assassination in Iraq sends oil prices higher and stocks skidding again.
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Updated from 9:37 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

Dow

opening at a new low for the year.

The Dow fell 99 points, or 1%, to 9914; the

S&P 500

dropped 11 points to 1085 and the

Nasdaq

lost 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 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

Associated Press

. 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

Newsweek

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,

XTO Energy

(XTO)

continued on its recent acquisition binge, agreeing to pay $1.1 billion of natural gas and oil fields from

ChevronTexaco

(CVX) - Get Report

. ChevronTexaco will part with 150 onshore properties in seven U.S. states, most of them in New Mexico and Texas.

Home improvement retailer

Lowe's

(LOW) - Get Report

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.

On Friday,

Oracle

(ORCL) - Get Report

lowered its hostile cash tender offer for

PeopleSoft

(PSFT)

by 19%, saying it was warranted given the recent decline of the target's share price.

No major economic releases are scheduled for Monday.