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Capture should lift market

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Posted: Monday, December 15, 2003 6:34 am | Updated: 1:56 pm, Thu Oct 6, 2011.

The capture of Saddam Hussein will give an added boost to a Wall Street already bullish after the Dow Jones industrials recently pushed through the 10,000 barrier, analysts said Sunday.

‘‘Psychologically, the news is nothing but good. There’s no doubt the world market will rally off that,’’ said Gary Kaltbaum, president of Kaltbaum & Associates, a money management firm in Orlando, Fla.

The news is likely to push the dollar higher and could send crude oil prices lower when trading resumes today, as the Iraqi supply had been curtailed because of widespread infrastructure problems.

Many believe Saddam’s capture might help stabilize the country and boost oil production and exports.

Still, Saddam’s capture will have no lasting effect on financial markets, analysts said.

‘‘I don’t think anybody will believe that because we’ve captured Saddam, the war in Iraq or the war on terrorism is over,’’ said Hugh Johnson, chief investment officer at First Albany Corp. ‘‘The market response I think will be positive, but in my judgment somewhat subdued.’’

In Asian trading today, the dollar was strong against major currencies. The euro was trading at $1.2143 compared with Friday’s New York close at 1.2275, while the dollar was worth 108.33 yen against its New York close at 107.86 yen.

Still, Kaltbaum also was less certain about the longterm impact on stocks, explaining that valuations are a bit high.

Last week, the Dow closed above 10,000 for the first time since May 2002 on a batch of strong economic data.

Earlier this month, the Nasdaq composite index crossed the 2,000 milestone, although it has since retreated from that level.

‘‘We’ll have a strong open Monday, but I don’t know if it will last,’’ Kaltbaum said. ‘‘This is something out of the ordinary. . . . But in the real scheme of things, will it affect the earnings and economy? Absolutely not.’’

That view is in contrast to investor sentiment nine months ago during the height of Operation Iraqi Freedom.

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