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Wednesday, March 26, 2003

The Fortunes of War

It's one of the enduring ironies of life that as some get blasted others get rich. Today it's the turn of the stock markets to rise. This, I feel, is what is known as volatility, although it terrifies me to think about the kind of mediatic impact this must be having across the third world, and what they must think of us. Is this a case of hostages of fortune, or fortunes for the hostages. I don't know. But what is clear is that, on all fronts, we are going to have to wait for the dust to settle to see what is really happening.

Stocks climbed on Tuesday as reports of an uprising against Saddam Hussein's forces buoyed investor sentiment a day after the market posted the year's biggest losses on worries over the war's progress.Reports an uprising may have started in the southern Iraqi city of Basra sparked a rally shortly after midday. Iraq's information minister denied the reports, but a British military official said early signs suggest an uprising may be under way. "We will be very keen to capitalize on it," he added. "The news in Basra that there had been a revolt against the Iraq forces there really cheered people a lot," said Brian Pears, head of equity trading at Victory Capital Management. "It definitely brought things back more to a middle ground in terms of our feelings about the war."

The market rally lost some of its luster later after the U.S. Senate, driven by concerns about the cost of war, unexpectedly reversed course and voted to cut President Bush's proposed $726 billion tax cut plan to about $350 billion. The blue-chip Dow Jones industrials ended up 65.55 points, or 0.80 percent, at 8,280.23, after jumping almost 1.5 percent earlier. The tech-laced Nasdaq Composite (^IXIC - news) was up 21.23 points, or 1.55 percent, at 1,391.01, after an earlier rise of more than 2.2 percent. The broad Standard and Poor's 500 added 10.51 points, or 1.22 percent, to 874.74. "We are a headline-driven market," said Arthur Hogan, chief market analyst at Jefferies & Co, as the market bounced throughout the session. Investors are scouring headlines out of Iraq on how and when the U.S.-led war will end. Stocks sank more than 3 percent on Monday, snapping an eight-day streak of gains that pushed the Dow 13 percent higher as grim footage over the weekend reminded investors the war may be longer than some had hoped.
Source: Yahoo News

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