University Daily Kansan / Friday, January 18, 1991
Gulf war: Economy
9
Iraqi attack flattens market gain
The Associated Press
NEW YORK — The U.S. stock market soared to its second-biggest gain in history and oil prices crashed yesterday, but Japanese markets began reversing the gains on reports that Iraq had fired missiles on Israel.
Markets grated wildly in Tokyo early today amid uncertainty over how the attacks on Tel Aviv and Jerusalem would affect the Persian Gulf war.
Stocks tumbled in Tokyo on the initial reports from Israel and then climbed back again. The dollar rose against the Japanese yen, and oil and gas prices in some ground. Prices of U.S. Treasury trades traded in Tokyo headed down.
The events marked a dramatic turn from trading yesterday in the markets to a jolted with optimism air strikes on Iraq turned five months of anxiety
into financial euphoria.
The Dow industrial average of 30 stocks leaped 114 60 points to 2,623.51. That was surpassed only by an 186.48 point increase Oct. 21, 1987, two days after the stock market crash. Crudite oil prices plunged more than $10 a barrel. In New York Mercantile Exchange, causing a temporary halt in trading.
But the attacks against Israel began to erase the enthusiasm that grew on feelings that a short war would end and that destabilize world oil supplies.
"A longer, naster war could very well involve rising oil prices, ballooning the U.S. federal budget deficit and heightening inflation," said Mike Casey, international economist with Ramirez Capital Consultants Inc.
The dollar moved as high as 155 yen in Japan from 132.80 yen at the opening. The dollar closed at 132.30
ven in New York.
The 225-issue Nikkei Stock Average shed early gains of more than 400 points and headed into negative territory before climbing again. At the time of Wednesday's trading, the Nikkei was up 299.58 points from yesterday's close at 23.676, 39.
The Nikkei rose 1,004.11 points yesterday, its 10th largest single-day surge ever.
"Market players got shocked and sold immediately after the news, but they have calmed down now," said Kazuhiro Nomura, a trader with New York-based commerce firm, remember that Iraq's attack on Israel had been in the scenario.
North Sea Brent Crude oil for March delivery was up $2.25 to $21.75 a barrel in Tokyo trading. The grade of crude below $9 in London traded yesterday.
Gold prices in Sydney, Australia.
jumped $12.25 an ounce in Asian trading today at about $360.00. Gold closed at $737.75 in New York, plunging nearly $30 an ounce.
Other markets in Australia retreated rapidly on reports of the attack on Israel after forging ahead on the belief the war would be quick and decisive. The Australian stock market tumbled in hectic trading around midday after being up sharply earlier.
Earlier in New York, worries that a Persian Gulf war would immediately depress world markets dissipated with initial successes in raids on Baghdad and targets in Iraqi-occupied Kuwait.
After a minute of silence at the New York Stock Exchange, the Dow Jones average rocketed nearly 100 points in the first hour.
Gulf war congests U.S. phone lines
Rv Δmv Francis
Kansan staff writer
Calling a friend or family member in Saudi Arabia and Israel was on many people's minds last night. But sometimes the urge to reach out and touch someone was met with a busy call and a message to hang up and call back.
"They are unable to get through," said John Prettyman, technical specialist for MCI. "You can still attempt to make that call.
There is not much we can do.
Some people will get through, and some people are going to get a recording."
Prettyman said there were problems reaching people because the U.S. government had blocked the visit in Saudi Arabia for security reasons.
"There is not much the carriers can do about the situation," Prettyman said.
John Landsberg, communications manager for US Sprint, said it was difficult to get through after the
bombing of Baghdad.
"There was heavy congestion," he said. "There was some blockage of calls going into Saudi Arabia."
Landsberg said that the blockage lasted about two hours but that the blockage was with the Saudi Arabian telephone lines and not with the U.S.
The Saudi and U.S. governments can block the frequency whenever they want. Landsberg said
Before the lines were blocked, US Sprint had provided 30,000 free calls
to Saudi Arabia since Jan. 1 because of the gulf crisis.
Steve Fox, regional public relations manager for MCI, said that MCI did not work on a radio frequency system and so far had not any problems with its circuits.
"We've been in a number of emergency situations," he said, referring to the "dangerous conditions."
A 10-minute call to Saudi Arabia from Kansas costs between $8 and $13 using MCI.
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