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US Stock Prices Drop Sharply Monday - 2003-03-25

U.S. investors took a gloomier view of a quick end to the war in Iraq Monday, and sent stock market prices sharply down. The U.S. dollar also fell, while the prices of crude oil went up.

Crude oil prices Monday registered their biggest gain in 15 months as pockets of stiff Iraqi resistance to the U.S.-led invasion raised concern that Iraqi oil may not quickly return to world markets.

Oil for May delivery rose 6.5 percent or $1.75 in New York to just under $29 a barrel. Oil is still priced nearly 28 percent below its peak of just under $40 per barrel touched in late February.

Another development helped push crude higher. Ethnic strife in Nigeria has shut down 40 percent of that country's oil output. Venezuela, meanwhile, is getting its oil production back on line following a crippling strike.

The stock market fell sharply with the main index, the Dow Jones industrials, losing three and a half percent or 307 points to close at just over 8,200. The loss was the biggest in three months and reversed the 235-point gain of last Friday. Volume was light. The market was up sharply last week, its best five-day performance in 20 years.

Gold was higher and the dollar lower.

Travel-related stocks were the hardest hit as advance reservations for air travel are down amid war and terrorism related worries impact. Delta Airlines is the last carrier to announce capacity reductions and further staff reductions are expected. Oil and defense related issues closed higher.