Bush stance unnerves stocks

US stocks felt the pull of political concerns yesterday, as comments from President Bush about Iraq reinforced market nervousness and muted optimism from a better-than-expected economic report.

Around 11.40am, the Dow Jones industrial average gained 28.15 points to 8,336.20 after briefly retreating into the negative on Bush’s remarks. The Nasdaq composite added 8.26 to 1,272.10.

The Standard & Poor’s 500 index rose 3.69 to 881.71. Bush said he would ask at an appropriate time to support any action on Iraq. The President also said he will make a case against Iraqi leader Saddam Hussein when he addresses the UN on September 12, the day after the one-year anniversary of the worst terrorist attack against the US.

”The struggling rally immediately deflated on Bush’s comments,” said Mike Thompson, market strategist with RiskMetrics.

Market breadth was positive. On the New York Stock Exchange, advancers beat decliners 4-to-3 as 485 million shares traded. On the Nasdaq, winners topped losers 9-to-8 as 574 million shares traded.