Newspaper article THE JOURNAL RECORD

Stocks, Bonds Plunge after Peace Talks Fail

Newspaper article THE JOURNAL RECORD

Stocks, Bonds Plunge after Peace Talks Fail

Article excerpt

NEW YORK (AP) - Stocks and bonds plunged, the dollar and gold rose, and oil prices swung wildly Wednesday as the nation's financial markets erupted after U.S.-Iraqi talks on the Middle East crisis appeared to fail.

The markets soured the instant Secretary of State James A. Baker III used the word ``regrettably'' in discussing the outcome of talks with Iraqi Foreign Minister Tariq Aziz, in Geneva.

The Dow Jones industrial average plunged 87 points from its highest point of the day as sell orders flooded stock exchanges and computerized program trades in the Chicago futures markets kicked in late in the day.

The key stock barometer finished down 39.11 points at 2,470.30, extending a sell-off since the beginning of the year. The index tumbled more than 50 points in about five minutes as Baker spoke to reporters.

``Baker's comments initiated it and all hell broke loose in the futures pits and on the New York Stock Exchange,'' said Manny Geranimos, head of block trading at Shearson Lehman Brothers Inc. ``We're on an emotional, geopolitical ride here.''

After brief opening comments on his six hours of talks with Aziz, the markets exploded when Baker said: ``Regrettably, I heard nothing today that suggested to me any Iraqi flexibility.''

Baker left open the possibility of a settlement before the United Nations' Tuesday deadline for Iraq to leave neighboring Kuwait, which it seized Aug. 2, but he said ``the time for talk is running out.''

Oil prices, which have surged on the fear that supplies could be disrupted during a war, leaped more than $7 from intraday trading lows to $31 a barrel on the New York Mercantile Exchange, then moved sharply lower again. …

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