The Iraqi wacky stock market did another abrupt turnaround today, climbing steadily as U.S. troops hunkered down in a sandstorm preparing to attack the defenses of Baghdad, then pulling back after the Senate slashed President Bush's tax cut package.
Rumors that Saddam Hussein was losing control of Basra were credited with rallying the market after Monday's big retreat.
The market faded later in the session after the Senate voted to halve the Bush administration's tax cut package, saying a $350 billion reduction is all the nation can afford when it is facing a $75 billion bill for the war plus billions more for rebuilding Iraq.
Adding to the war-related costs is another round of help for the beleaguered airline industry, which Senate Majority Leader Bill Frist (R-Tenn.) promised today. "Relief will be given to some extent," he said, without specifying how much or when. Airline stocks climbed a little after that, as did hotel stocks, both battered during Monday's sell off.
After being up more than 120 points early in the session, the Dow Jones industrial average ended the day with a gain of 44 points to close at 8259.16. The Standard & Poors 500 stock index closed at 871.80, a gain of 8 points. The Nasdaq Stock Market composite index raced ahead of the other indexes, climbing 18 points to 1387.39.
As the market rallied, the disagreement over what will happen on Wall Street after the war became as intense and divisive as the United Nations' debate over Iraq.
"An equity market rally of 40 to 50 percent is plausible," proclaimed Barton Biggs, chief strategist of Morgan Stanley, long known as one of Wall Street's most bullish voices.
Others cautioned that Iraq is not the only thing holding back the market, citing other economic uncertainties, particularly the worrisome mood of consumers.
As expected, the Conference Board's March survey of consumer confidence showed growing gloom dragged that index to its lowest level in almost 10 years. The latest report on home sales also showed a big decline, but little was said about either statistic in the day's market commentaries.
While traders and analysts debated the impact of the war on the market, the New York Stock Exchange injected itself into the war of words about the war itself. The exchanged kicked out reporters from al-Jazeera, the Arab satellite news station, which has been broadcasting from the floor of the exchange for five years.
Officials of the NYSE, which permits two dozen news organizations to broadcast from the floor, said it was running out of room and needed the space for other organizations with more interest in the market.
Al-Jazeera complained that the ejection was politically motivated, part of a campaign in the U.S. media against the video service, which has been harshly criticized for showing pictures of American prisoners of war and dead soldiers.