Posted on 03/21/2003 12:00:40 PM PST by TLBSHOW
Stocks Surge for the Eighth Straight Day
NEW YORK - Wall Street kept in step with the escalating war on Iraq (news - web sites), pushing the Standard & Poor's 500 closer to its best winning streak in nearly six years as the United States launched its massive aerial attack against Iraq.
Trading was brisk as televisions flashed images of enormous explosions around Baghdad, part of the bombardment known as "shock and awe" to reflect the goal of forcing Saddam Hussein (news - web sites)'s regime to capitulate.
Analysts said the developments fed investor confidence about a short and swift victory, which they believe is needed before businesses commit to capital spending sorely needed to revitalize the economy.
"Investors are relieved by the progress of the conflict in Iraq, which is better than many people believed," said Robert Streed, portfolio manager of Northern Trust Select Equity Fund in Chicago.
"There might be another issue going on as well — the Dow and S&P have now moved into positive territory for the year and we're approaching the end of the quarter," he said. "So some portfolio managers who are not invested might feel a need to get money in the market."
By midafternoon, the S&P 500 index rose 10.43, or 1.2 percent, to 886.27, after advancing 75 points in the past seven days, its best performance since August 2000. The last time the index posted eight days of gains was during June 1997.
The Dow Jones industrial average was up 131.72, or 1.6 percent, at 8,418.32, having gained 762 points in the previous seven sessions — also the longest streak since 2000. The last time blue-chip stocks had eight winning days was in December 1998.
The Nasdaq composite index gained 6.48, or 0.5 percent, to 1,409.25, having risen in five of the past seven sessions.
The sharp advance lifted the Dow and S&P higher for the year, and pushed the main gauges toward their second straight winning week.
On Friday, the United States launched its long-awaited aerial bombardment. American and British ground forces, meanwhile, swept through Iraq and took over two important airfields.
U.S. officials said hundreds of Iraqi soldiers surrendered and Iraq's command structure appeared to have disintegrated. They said U.S. surrender talks with senior Iraqi officials were continuing.
Stocks have surged in recent days on expectations of a brief and successful war, but analysts caution that the market could quickly reverse itself if the conflict is prolonged. They added that trading will likely be choppy as investors focus on the latest headlines.
Subodh Kumar, chief investment strategist for CIBC World Markets, said Wall Street's winning streak was encouraging given its string of declines in recent months.
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