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"As long as it takes"

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The major indexes are still showing red, but just off their session highs after President Bush and Prime Minister Tony Blair reiterated in a firm tone that the war against Saddam Hussein's regime would continue for an amount of time described to be "as long as it takes" to reach the coalitions objective.

Explosions were reported again in the vicinity of Baghdad by various news organizations. No explosions were seen on TV broadcasts from the city but the thick smoke from burning oil- filled trenches marred an otherwise clear sky.

Coalition forces remain about 50 miles outside of Baghdad and fighting is soon expected to intensify as they close in. "That will be some of the toughest fighting that will occur," said Defense Secretary Donald Rumsfeld during a briefing with reporters after Congressional testimony.

On Thursday (Iraq time), aircraft flew 600 sorties, according to the Associated Press, well off the campaign's opening tempo of more than 2,000.

In the last hour, selling picked up in the longer-dated 30-year Treasury as its YIELD ($TYX.X) edged into positive territory at 4.94%, while similar selling in the benchmark 10-year YIELD ($TNX.X) rose back to its WEEKLY pivot of 3.944%, but has since found some renewed selling at this near-term level of technical importance and has edged back lower to 3.936%. This bond market action continues to hint that there is some underlying selling in Treasuries, which appears to have some cash being put to work in equities on pullbacks.

The Dow Industrials (INDU) 8,202 -0.33% now shows a 27-point decline and just off its best intra-day recovery level of 8,211 and similar to yesterday, early negative breadth of 2 to 28 now has breadth more evenly distributed with 13 components showing gains compared to 17 stocks still in the red. The two stocks having shown early morning gains have McDonalds (NYSE:MCD) $14.60 +2.6% at levels found near 11:00, while shares of drug giant Merck (NYSE:MRK) $55.47 +1.87% build gains from earlier morning levels.

Sector action has seen modest improvement with Oil Service (OSX.X) 85.71 +2.99% continuing to lead today's sector winner's list, with fractional gains now building in Disk Drive (DDX.X) 76.39 +0.69%, Combined Telecom (IXTCX) 123 +0.72%, North American Telecom (XTC.X) 422 +0.39%, Drug (DRG.X) 302 +0.53%.

Early sector losers have seen some rebound from their morning lows with Gold/Silver (XAU.X) 62.52 -2.17% still leading today's sector loser list as the U.S. Dollar Index (dx00y) 100.63 +0.01% shows modest gain. Forest/paper (FPP.X) 261.09 -1.8%, Airlines (XAL.X) 30.97 -1.4% and Semiconductor (SOX.X) 317.60 -1% have recouped about one-third of their morning losses.

The broader market trade as the S&P 500 Index (SPX.X) 870 now at unchanged levels as the financial sector that had the S&P Banks Index (BIX.X) 270 -0.15% recovering from an earlier 1% decline helping bolster a rebound.

With a somewhat "mixed" trade among technology sectors still at hand, the NASDAQ-100 Index (NDX.X) 1,064 -0.23% trades off just 2 points, but well up from a morning low of 1,050.

Volumes have been light, with the NYSE trading just over 629 million shares at the halfway points, with heavier volume of 805 million shares at the NASDAQ. Market breadth at the NYSE is even, while breadth is slightly negative at the NASDAQ with 4 stocks declining for every 3 stocks showing gains.

Jeff Bailey

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