Dow drops more than 150 points

Capping a dreary first quarter, Wall Street suffered another sharp drop today, depressed by fears of prolonged fighting in Iraq and a disappointing report on the state of manufacturing in the Midwest.

The Dow Jones industrials slid more than 150 points in the market’s fourth straight declining session.

The Dow and Standard & Poor’s 500 index ended the first three months of 2003 with substantial losses, while the Nasdaq composite index, which had fallen the most in the bear market, eked out a modest gain. The month of March, however, turned out to be positive for all three indexes.

Analysts said investors are concerned that the war will last for several months rather than a few weeks. Investors believe that the longer the fighting lasts, the more conservative businesses and consumers will become in their spending, a threat to an already troubled economy.

“It is just hard to find buyers. Not a lot of people are willing to step up to the plate,” said Bryan Piskorowski, market commentator for Prudential Securities. “For the most part, it is all Iraq all the time, but you also have soft economic data ahead of quarterly earnings warnings. That triumvirate is hard to overcome here.”

The Dow closed out Monday’s trading down 153.64, or 1.9%, at 7,992.13, according to prelminary calculations. The Dow amassed a four-day loss of 288.10.

The broader market was also sharply lower. The Nasdaq composite index sank 28.82, or 2.1%, to 1,340.78. The Standard & Poor’s 500 index fell 15.38, or 1.8%, to 848.12.

But some optimism earlier in the month, when investors sent stocks rallying on the belief that war would be short, enabled the indexes to end the month with gains. The Dow rose 1.3 percent, the Nasdaq advanced 0.3% and the S&P increased 0.8%.

Stocks finished the first quarter mostly lower. The Dow gave up 4.2% and the S&P shed 3.6%, although the Nasdaq gained 0.4%.

Today’s economic news was a big blow to the market. The Purchasing Management Association of Chicago reported that its index of business activity fell to 48.4 in March on a seasonally adjusted basis from 54.9 in February. Not only was the reading much weaker than economists predicted, but because it was below 50, it indicated a contraction in business activity.

The index is considered a harbinger of the Institute for Supply Management’s national survey on manufacturing, due to be released on Tuesday.

Analysts said the investors fears about the wobbly economy stand to deepen as companies begin revising their first-quarter earnings estimates, with many bound to cut their outlooks.

Retailers were among the market’s losers but Wall Street’s losses were spread across sectors, an indication that investors are extremely nervous. IBM fell 2.42 to 78.43, Boeing tumbled 1.04 to 25.06 and American Express declined 99 cents to 33.23.