World wide equity markets appear to be lost in the "fog of war" as all attention remains focused on the conflict in Iraq. U.S. financial markets continue to ignore dramatic economic data pointing to a second dip recession. Instead, Wall Street is spellbound by the minute-to-minute headlines coming from Baghdad.
Speaking of Baghdad, news last night that Coalition forces had taken Saddam Hussein International Airport, which is only 10 to 12 miles from downtown Baghdad was a major victory and helped support global markets. Americans quickly renamed the airport Baghdad International but said the Iraqi people can rename to their own choosing once a new government has been erected.
Some Wall Street veterans have stated it's tough trading on war news. One minute the markets are starting to sink with news clips of Saddam walking around the city and raising questions on whether he is alive or dead. The next minute markets are starting to bounce again on news that 2,500 Republican Guards have surrendered to the Marines southeast of Baghdad.
The Iraqi defense minister claims that the Iraqis will not use chemical weapons but a new unconventional attack will be unleashed against the Americans and British troops tonight (or tomorrow). Obviously, this is contributing to the skittish markets but the major U.S. indices are oscillating around breakeven on the session.
Tugging at the Dow Jones Industrial average yet again are shares of Altria Group (MO). The stock is down another 4.7% today after an Illinois panel has chosen to hold MO's Phillip Morris division to a judge's decision for it to post a $12 billion bond.
Making headlines was the $80 billion supplemental spending package approved by Congress. Approximately $60 billion was earmarked for the war in Iraq while $3 billion was destined to the troubled airlines industry. This has given shares of AMR some lift as the stock is up 6.6% and up significantly from last week's lows when the company appeared destined for bankruptcy.
Not helping the airlines or the Asian economies is the SARS illness, which is seriously affecting businesses and travel throughout the region.
Despite it all most global markets were higher on the day. Meanwhile gold futures fell 70 cents to $325 an ounce and crude oil contracts are down to $28.35 a barrel.
The Dow Jones Industrials average is currently +15 points to 8255, the NASDAQ Composite is -12 points to 1383, and the S&P 500 is nearly unchanged at +1.5 points to 878. Overall advancing issues are narrowly out beating declining issues while up volume is falling behind down volume across the NYSE and NASDAQ exchanges.