Mar 20, 2003 3 min read

By Hope Yen AP Business Writer

NEW YORK (AP) – Wall Street notched its longest winning streak in nearly three years Wednesday, as investors picked up shares before the deadline President Bush set for Iraqi leader Saddam Hussein to flee or face war.

Analysts said volume was somewhat light as many investors chose to see what happened once the 8 p.m. EST deadline passed. Tech shares, however, sagged on a cautious outlook from Oracle.

“There’s a sense of relief that we now understand all the war variables for the first time in a month,” said Brian Pears, head equity trader at Victory Capital Management. “We know there’s a military solution. That euphoria won’t last forever, but it certainly accounts for one of the best rallies in three years.”

The Dow Jones industrial average closed up 71.22, or 0.9 percent, at 8,265.45, for a six-day advance of 741 points. It was blue chip stocks’ highest closing level since Jan. 23, when the Dow finished at 8,369.47.

The Standard & Poor’s 500 index rose 7.57, or 0.9 percent, to 874.02. The last time the Dow and S&P 500 saw six straight days of gains was August 2000.

A third key market indicator finished lower, however. The Nasdaq composite index fell 3.47, or 0.3 percent, to 1,397.08.

Oracle Corp. dropped 94 cents to $11.31 after the software maker cautioned that profits may sag if the anticipated war isn’t completed quickly. The news weighed on other tech companies, including Siebel Systems, which fell 53 cents to $8.79.

“We’re used to Oracle being the cheerleader in the technology sector since it historically has given us relatively positive guidance,” said Arthur Hogan, chief market analyst at Jefferies & Co. “Yet their guidance was cloudy, so that didn’t help.”

Meanwhile, long columns of U.S. troops and armored vehicles advanced toward the Iraqi border. About 300,000 U.S. and British forces stood ready for attack as Iraq’s government resisted Bush’s ultimatum for Saddam to give up power.

Investors have pushed stocks sharply higher in the past week, boosted by hopes of a short and successful war with Iraq. Still, analysts caution that Wall Street could quickly see losses should the U.S.-led military conflict fail to achieve a quick victory.

“Unfortunately, we’re going to trade headline to headline for a while,” said Pears of Victory Capital Management in Cleveland. “It’s really difficult to say what the market will do in the short-term depending on what happens overseas.”

“For the rally to continue, it would have to be a quick and relatively casualty-free war,” he added.

Gainers included defense contractors General Dynamics, which climbed 67 cents to $58.42, and Northrop Grumman, which rose $1.29 to $87.45.

Albertson’s increased $1.25 to $20 after the supermarket chain reported fourth-quarter earnings that met analysts’ expectations.

FedEx rose $3.50 to $55.18 after the package-delivery company reported earnings that fell a penny short of analysts’ expectations.

But Bayer fell $1.19 to $14.21, pulling back after a huge increase the day before. The company’s U.S.-traded shares rose 37 percent Tuesday after the drug maker was cleared of liability in the first lawsuit to go to trial accusing it of ignoring research linking the cholesterol-lowering drug Boycott to dozens of deaths.

Advancing issues outnumbered decliners 5 to 4 on the New York Stock Exchange. Volume was moderate.

The Russell 2000 index, a barometer of smaller company stocks, rose 0.51, or 0.1 percent, to 368.51.

Overseas, Japan’s Nikkei stock average finished 1.2 percent higher Wednesday. In Europe, France’s CAC-40 climbed 1.5 percent, Britain’s FTSE 100 gained 0.5 percent and Germany’s DAX index rose 1.2 percent.

____

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com