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NEW YORK (AFP) - US share prices tumbled on a market
unnerved about the stiffening resistance to US forces in Iraq (news
- web sites), a jump in crude oil prices and weaker-than-expected profits
at Alcoa.
The Dow Jones Industrial Average of 30 top companies dropped 90.66 points
or 0.86 percent to 10,480.15. The broader Standard and Poor's 500 index
fell 7.65 points or 0.67 percent to 1,140.51. The Nasdaq market index
slid 9.66 points or 0.47 percent to 2,050.24.
"Events in Iraq are likely holding the markets back, as they present
a potential re-election problem for President Bush (news - web sites)
and conditions in that country continue to destabilize," Paul Mendelsohn,
chief investment strategist with Windham Financial Services, said in
a report.
"We are going to need some positive earnings surprises within the
next few days in order to drive this market higher."
US forces bombed a mosque in the flashpoint Iraqi town of Fallujah after
taking hours of small arms and rocket-propelled grenade fire, a marine
officer said. After initially estimating up to 40 dead, an officer said
no bodies were found in the damaged building.
"The ongoing terrorism, geopolitical unrest and fear, with more
news on that out today, has certainly got investors jittery," said
Jefferies and Co. analyst Arthur Hogan.
Investors also reacted with disappointment to news of a decline in US
commercial crude oil inventories.
"The hopes of the price of crude oil coming down have been re-exmained,"
he said.
Many traders had been expecting a rise in inventories, and the shock
sent New York's benchmark light sweet crude for delivery in April surging
1.33 dollars to 36.30 dollars.
A survey by the Department of Energy (news - web sites) found that US
commercial crude oil inventories fell 2.1 million barrels to 292.2 million
barrels in the week ended April 2.
A rival private survey by the American Petroleum Institute found crude
oil stocks fell by 2.3 million barrels to 292.3 million in the same
period.
Gasoline inventories also slipped.
"The other concern out there is that the first Dow component that
reported missed by two cents," Hogan said, referring to aluminum
giant Alcoa's weaker-than-expected profits.
That led to "concerns about great expectations for the first quarter's
reporting season not being so great," he said.
Alcoa fell 1.21 dollars, or 3.32 percent, to 35.29 dollars.
After the market closed Tuesday, Alcoa reported that net profit surged
135.1 percent from a year earlier to 355 million dollars, or 41 cents
a share in the three months ended March 31.
Revenue surged 10.8 percent to 5.7 billion dollars.
But the result fell short of expectations in a climate of soaring aluminum
prices.
Alcoa said the full impact of higher prices had yet to land.
"Looking forward, we expect that the recent, rapid increase in
aluminum prices will have a greater impact in the second quarter and
contribute to improved profitability," said chairman and chief
executive Alain Belda.
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