The clank of tanks through the streets of Baghdad and the roar of unchallenged A-10 "Warthogs" above the city sounded like buying signals to Wall Street today.
Awakening to headlines hailing the progress of U.S. forces into the Iraqi capital and dramatic new television scenes of planes, tanks and amphibious vehicles attacking, traders unleashed salvos of buy orders.
Stocks jumped almost 3 percent in the first frenetic hour of trading, but unlike the troops, the traders couldn't hold the territory they attacked.
The big three indexes peaked early, slipped slowly through the session and then in the last two hours dove dramatically.
By the closing bell, the markets were barely ahead -- a pattern that marketwatchers warned does bode well for the days ahead. The fade may have been a warning that Wall Street's propensity for rallying in response to war developments may finally be replaced by a more rational analysis of the markets.
The Dow Jones industrial average closed up 23.26 points at 8300.41.
The Standard & Poors 500 stock index gained a point to close at 879.93.
The Nasdaq Stock Market composite index gained 6 points to close at 1389.51.
Airline stocks were among the day's best gainers as investors gambled that a quick end to the fighting in Iraq would overcome the fear of flying that kept planes flying with so many empty seats last week. Many airline investors remain highly skeptical of that scenario, warning that as war worries fade, Severe Acute Respiratory Syndrome will replace it as a reason not to fly.
As other markets responded to the news from Baghdad, stocks in Europe scored even bigger gains, advance more than 3 percent across most of the continent and more than 5 percent in Germany and the Netherlands.
Gold prices fell, the value of the dollar rose, and interest rates on U.S. government bonds edged back up as investors sold bonds to move back into the stock market.
Crude oil prices continued their retreat, prompting the Organization of Petroleum Exporting Countries to call a meeting to discuss possible production cuts. Managing prices has not been easy for the oil monopoly of late. OPEC tried to keep production up to minimize the impact of unrest in Latin America and the Middle East and in the process pumped so much oil that now prices are falling faster than the OPEC wants.
Gasoline prices in the U.S. dropped 7 cents a gallon over the past two weeks, the first decline in four months, the weekend Lundberg survey of prices showed. Lundberg reported $1.70 a gallon is now the nationwide average price for all grades of gasoline.
But gasoline prices are not going to come down as fast as crude oil has been, industry sources cautioned today. Gasoline supplies remain tight, which will slow the fall of pump prices.