NEW YORK -- It was a frightening, jittery session yesterday for the New York financial markets as apprehension over the imminent decision on war in the Middle East produced volatile prices on little activity.
"There is no way to evaluate what is going on," said Michael Wilner, an oil trader on the New York Mercantile Exchange, "so we spend a great deal of time just weighing the news."
Oil prices soared $5 a barrel, to $32, at the opening and then fluctuated throughout the day in light, sporadic trading before closing up $3.49 at $30.78.
Similarly, 400 yards away at the New York Stock Exchange, traders complained of a nervous inertia -- prices gyrating on low volume but ultimately merely continuing their steady move lower. Late in the session, the Dow was off 54 points before rebounding sharply on a Cable News Network report suggesting that Iraq might withdraw from Kuwait.
The Dow closed down 17.58 at 2,483.91, and other major indexes registered similar losses. Declining issues on the New York Exchange outnumbered rising ones by a margin of more than 3-to-1 on light trading of 120.83 shares.
"The market is in the process of discounting a less than favorable outcome of the Persian Gulf crisis," said Eugene Peroni, director of technical research with Janney Montgomery Scott Inc. in Philadelphia.
"The volume tells it all," said Tom Ryan, head of equity for Kidder Peabody. "Everyone is on standby, doing little or nothing, waiting to see what develops in the Middle East. It's been dead."
In contrast to the recent past, activity on the petroleum-oriented Mercantile Exchange was less frenetic than at the adjoining Commodity Exchange, where gold shot up $8.50, to $400.10 an ounce. Shares of many gold-mining companies moved up a bit in response to higher prices for the metal, but the moves were not decisive.
Among the most actively traded issues, IBM was off 1 3/8 , to 106 3/4 ; Philip Morris dropped 1/8 , to 48 7/8 ; and General Electric gained 1/8 , to 54 1/8 .
Since the beginning of the year, the Dow has slid more than 150 points, and there appears to be little enthusiasm for a rally. But John Burnett of Donaldson Lufkin Jenrette, said a pervasive caution has prompted most stock-trading companies to hold low numbers of shares, which could cause any shift toward optimism to push up prices dramatically.
"What we are seeing here is a market without a heck of a lot of supply," Mr. Burnett said. "The feeling seems to be that if there is a peaceful solution, the market could rally significantly. . . . But the fear is a long protracted battle. If the occurs, the market will be in deep trouble."