Iraq move boosts market

IRAQ's acceptance of a UN resolution combined with an indication from Federal Reserve chairman Alan Greenspan that the central bank still had room to act boosted stocks at midday yesterday after an earlier decline.

Around 12.05pm ET, the Dow Jones industrial average, up 96.20 to 8482.20, the Nasdaq composite, up 21.47 to 1371.03, and the Standard & Poor's 500, up 8.43 to 891.38, index all pulled higher.

Iraq’s ambassador to the United Nations said yesterday he delivered a letter to the UN secretary-general's office indicating his nation accepted the terms of the latest resolution requiring it to disarm and allow weapons inspectors back into the country.

Stocks had started lower after Greenspan, in his testimony for the Congressional Joint Economic Committee, said the economy had hit a “soft patch” amid weakness in the stock market and prospects of a war with Iraq.

But in the Q&A session that followed, Greenspan said that despite the central bank shifting its bias to neutral after last week's rate cut, the Fed was not averse to acting again if economic risks grow.