Updated from 4:08 p.m. EST
Stocks edged lower Thursday as investors juggled the prospects of a longer-than-expected conflict in Iraq and upbeat comments from the leaders of the U.S. and Britain.
After posting triple-digit losses in the morning, the
Dow Jones Industrial Average
ended down 28.43 points, or 0.35%, to 8201.45. The
lost 3.20 points, or 0.23%, to end at 1384.25, while the
shed 1.44 points, or 0.16%, to 868.52.
The 10-year Treasury was 3/32 higher to yield 3.92%. Brent crude was up about 6% at $30.37 a barrel for May delivery, while the dollar was lower against the euro and yen.
"The realization that war will be longer than expected is becoming more pervasive. We've been very cautious, positioning ourselves quite conservatively for a while. We had some short positions, which we had to pull out of when the market went up, but we've reestablished most of them now," said Jim Melcher, president and market strategist at Balestra Capital, a hedge fund based in New York.
A few money managers are already painting a grim picture in case of an extended conflict. "A general emotional malaise could overcome investors, who will be less willing to take on risk in equities," said Tim Fidler, director of research at Ariel Capital Management in Chicago. "This could bleed into the real economy, with people changing their spending behavior dramatically,"
The major averages got a slight boost following comments from President Bush and U.K. Prime Minister Tony Blair in a joint press conference at Camp David. Both leaders reiterated that Saddam Hussein and his army would be defeated. Bush said the Iraq war has no specific time frame and that it will last "however long it takes to win." Blair suggested resuming the U.N.'s food-for-oil program "in the next few days," and encouraged the world body's participation in the postwar rebuilding of the nation.
Volume was light, with less than 1.2 billion shares trading hands on the
New York Stock Exchange
, as advancers outpaced decliners by a slight margin. On the Nasdaq, volume was a little more active, with 1.4 billion shares traded and losers practically tied with winners.
Meanwhile, coalition warplanes flew more than 600 bombing missions Thursday, as U.S.-led forces continued to advance toward Baghdad. Earlier, British troops destroyed 14 Iraqi tanks trying to break out of the southern city of Basra.
In other military developments, Defense Secretary Donald Rumsfeld reportedly ordered an additional 30,000 troops to Iraq, as military officials believe significantly more combat power will be required to win the war. Separately, more than 1,000 U.S. paratroopers reportedly were deployed in northern Iraq, where they will set up landing areas where tanks and artillery can be flown in to support a northern front. The landing occurred in an area controlled by opposition Kurds.
In the south, Republican Guard troops reportedly continued to maneuver toward U.S.-led forces that are heading to Baghdad, where heavy bombing continued overnight. Seventeen Iraqi civilians were killed when a bomb fell in a residential neighborhood, though it wasn't immediately clear who launched it. U.S. officials said it was possible that the missile was fired by Iraq.
Overseas markets were mostly lower, with London's FTSE 100 down 1.7% at 3729, while Germany's Xetra DAX was up about 0.18% at 2584. In Asia, Japan's Nikkei inched up 0.2% to close at 8369, while Hong Kong's Hang Seng lost 2% to 8872.
In economic news, the government said the number of people filing for first-time jobless benefits fell to 402,000 last week from 427,000 the previous week. The figure is lower than the 420,000 economists had predicted. Investors also received the final revision of the fourth-quarter gross domestic product, which held at an annualized growth rate of 1.4%, in line with the figure reported last month.
"It was good to see unemployment fall back a bit. The permanently upward trend was becoming alarming," said Liz Ann Sonders, chief investment strategist at Charles Schwab.
is seeking buyers for its Chipotle Mexican Grill, Boston Market and Donatos Pizzeria chains, in a move to concentrate efforts on its struggling burger business, according to media reports. This would be the first major strategic decision of the company's new chief executive, James Cantalupo. The former head of McDonald's, Jack Greenberg, had invested millions in these businesses. Shares of McDonald's climbed 2.5% to $14.58.
expects up to $300 million in charges in the current quarter related to accounting changes and asset impairments. The second-largest U.S. oil company also forecast higher pension and energy costs. Chevron shares fell 0.8% to $65.26.
On the research front, Morgan Stanley downgraded broadband chipmaker
to equal-weight from overweight in light of uncertainty about recent management changes. The firm cut its price target on the shares to $21 from $30. Shares of Broadcom shed 16.2% to $12.91 and were among the most actively traded issues.
said it expects significant losses in the first quarter and full-year 2003 because of lower air traffic during the Iraq war and higher costs related to terrorism and fuel. Continental shares slid 7.1% to $5.47.
Also in the airline sector,
( FRNT) said it expects to lose 34 cents to 38 cents a share in the fourth quarter, below its initial estimate of a loss of 21 cents per share. Frontier shares closed 3.7% lower at $4.92.
, a finisher of steel sheets used by automakers, warned that second-quarter earnings will be about 18 cents a share, below analysts' forecasts of 33 cents a share. Shares of Steel Technologies lost 8.1% to $9.10.
filed a suit late Wednesday against rival
( FON) for what it calls a "fat-finger dialing" scheme. AT&T alleges that Sprint, along with One Call Communications and ASC Telecom, subscribed to dozens of toll-free numbers similar to AT&T's 1-800-CALL ATT, its operator-assisted service. Sprint shares fell 0.5% to $11.84.
agreed to buy an 80% stake in Hyundai Group's money management divisions in a deal valued at $400 million. The goal is to strengthen the life insurer's foothold in South Korea. Prudential shares shed 0.8% to $30.14.
On Wednesday, the Dow gave up 50 points to end at 8229, while the Nasdaq slid 3 points to 1387 and the S&P 500 lost 4 points to 870. War worries, a weak report on new-home sales and the president's difficulty pushing through his tax cut hurt the markets.