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U.N. Security Council approves U.S. resolution on Iraq

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The major indexes remain pegged near their session lows as "war jitters" have kept stocks in the red for the bulk of the session. In the past hour, the Semiconductor Index (SOX.X) 301 did get back above the psychologically important 300 level and traded into positive territory at 308, but sector bulls have been unable to build on that gain.

In a unanimous decision, the U.N. Security Council backed a resolution that threatens "serious consequences" for Iraq if Saddam Hussein does not disarm. President Bush said Iraq would face the "severest consequences" if it did not comply with the new U.N. resolution.

"The agreement on the U.N. resolution will trigger geopolitical concerns back to center stage in financial markets, especially now that U.S. elections are over and the U.S. earnings season is concluded," said Ashraf Laidi, chief currency analyst at MG Financial.

"In case of Iraq's non-compliance of the resolution and looming military action, market uncertainty would return and destabilize an already shaky global economy and an already disarmed Fed."

Despite some of today's saber rattling between the U.N. and Iraq, defense related stocks as depicted by both the $DFX.X 161.80 -0.04% and $DFI.X 536.57 -0.84% trade modestly lower.

December Light,Sweet Crude futures (cl02z) $25.80 +1.65% are up 42-cents, while the equity side of things as the Oil Index (OIX.X) 253.36 +0.42% holding onto a modest gain. Dow component Exxon/Mobil (NYSE:XOM) $34.51 +0.08% is showing a 3-cent gain.

Shares of Amgen (NASDAQ:AMGN) $44.44 -1.98% got a brief lift from their session lows of $43.90 after Bloomberg reported that some members of Congress are questioning a decision by the Centers for Medicare and Medicaid Services that cut the 2003 reimbursement rate for Amgen's Aranesp by more that half if given to patients in outpatient clinics.

Treasuries closed just off their highs of the session with the benchmark 10-year (ty02z) 115'015 +0.23% having reached the 115'045 level. The benchmark bond's YIELD finished marginally lower at 3.852%. Modest selling in the shorter-dated 5-year had its YIELD ($FVX.X) edging up fractionally at 2.866%. The bond markets will be closed on Monday in observance of Veteran's day.

Jeff Bailey

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