COMMUNITIES AGAINST CAPITALISM

Dow Posts Biggest One-Day Gain Since Mid-October
     By Jerry Knight
     Washington Post

     Thursday 13 March 2003

Dow Up Nearly 3.6 Percent

     Ignoring weak February retail sales and persistently high claims for jobless benefits, the markets took off on an unexpected run today after it appeared a showdown over Iraq has been put off until next week.

     The Dow Jones industrial average jumped more than 269 points, about 3.6 percent, its biggest one-day gain of the year and the largest since mid-October.

     As the price of crude oil and gold fell steadily today, stocks rose across the board. The Standard & Poor's 500 stock index rose nearly 28 points, or about 3.4 percent, to 831.91 and the Nasdaq Stock Market composite index was up more than 4.8 percent, gaining nearly 62 points to 1,340.78.

     Wall Street analysts could find little but psychological factors to explain today's rally. They cautioned against proclaiming it a turning point for stocks, which many investors fear are on their way to new lows.

     In fact just before trading began, Salomon Smith Barney issued a report from its team of chart-watchers and statistical analysts saying, "The weight of the technical evidence suggests the October lows ultimately are unlikely to hold."

     Today they not only held, they sprung back, giving the biggest bounce to technology stocks. Every single member of the tech-dominated Nasdaq 100 index was up for the day, lead by Microsoft, Qualcomm, Intel, Cisco and Oracle. Tech-stock bulls rationalized the rally by saying that the big name computer stocks have fallen more than warranted by the fundamentals of their business.

     The prevailing wisdom, however, was that the rally represented a giant sigh of relief by battered investors who have been bracing for the start of war with Iraq. The U.N. Security Council resumed the Iraq debate this afternoon, but it looked like tomorrow's expected showdown will be delayed. The Bush administration, which had been pressing for a vote this week, signaled that it could wait until after the weekend.

     Economic statistics issued today provided no justification for a stock market rally. New claims for unemployment benefits fell last week, but remained at 420,000--a level considered a symptom of an unhealthy labor market. The government's report on February retail sales showed a 1.6 percent overall decline and a 1 percent drop when volatile car sales are factored out.

     Today's stock rally started after markets in Europe recovered from a massive sell-off the day before. As European stocks fell, so did the prices of crude oil and gold--the key indicators of war worries. Crude, which touched $40 a barrel a few days ago, dropped back today to the $36 range and gold fell to $336 an ounce, its lowest level in three months.