Stocks mired in red as Blix speaks

New York - Stocks languished in negative territory on Monday, with the blue-chip Dow Jones industrial average losing two percent, as chief U.N. inspector Hans Blix said Iraq cooperated in providing inspectors with access but seems "not to have genuinely accepted disarmament demands."

Blix, whose team spent two months hunting for evidence of banned weapons of mass destruction in Iraq, was in the midst of offering a highly anticipated briefing on Iraq to the Security Council. His report comes a day before President Bush's State of the Union speech, in which Bush will try to rebuild foreign support for a potential war on Iraq as well as answer growing doubts from the U.S. public.

At midday, the Dow was down 130.82, or 1.6 percent, at 7,998.21, having dropped 5.3 percent last week and to levels last seen in October. It was the Dow's fifth triple-digit decline in six sessions..

The Dow was adding to Friday's decline of 238.46. In eight sessions, the Dow has dropped about 850 points.

The Dow last traded below 8,000 Oct. 15 and last closed below that level Oct. 14, when it stood at 7,877.40.

The broader market was also lower. The Nasdaq composite index fell 14.98, or 1.1 percent, to 1,327.16, having lost 2.5 percent last week. The Standard & Poor's 500 index fell 12.66, or 1.5 percent, to 848.74, following last week’s decline of 4.5 percent that brought it to levels last seen in October.

"The markets are experiencing extreme volatility," said John Person, head financial analyst at Infinity Brokerage Services.

The stock market had briefly trading in positive territory after a report showed that sales of existing U.S. homes surged 5.2 percent in December while home sales for 2002 set a record.

The market, however, quickly sank back into negative ground later in the morning.

Corporate news took a backseat to the U.N. briefing, and few stocks made big moves.

Freddie Mac , the No. 2 U.S. mortgage finance company, dropped $1.21 to $57.90. The company said it would not provide a 2003 earnings forecast or an interest margin outlook amid a cloudy business environment.

Johnson & Johnson dipped $1.57 to $52.04, weighing on the Dow. The drug giant said it will take a charge against fourth-quarter earnings after being ordered to reimburse Amgen Inc. for attorneys' fees and costs related to a licensing dispute.

Action Performance Companies Inc. , which markets motor sports merchandise such as car replicas and apparel, lost $1.02 to $16.13. The company said quarterly income fell slightly due to production delays for several toy car models.

Tyson Foods Inc. , the world's largest meat company, sank $1.02 to $10.47. The company said quarterly earnings fell sharply, hurt by high grain prices as well as low meat prices due to oversupply. -- Washington Post

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