Dow Manages to Gain 6.68 in Light, Subdued Trading

Stock prices finished barely higher in subdued trading today as the deadline for Iraq’s withdrawal from Kuwait ticked closer.

The Dow Jones industrial average closed up 6.68 points at 2,490.59. Volume was an extremely light 109.98 million shares, an indication that investors refused to make any commitments should war erupt following the midnight EST (9 p.m. PST) deadline.

All eyes were on the news ticker, analysts said, seeking last-minute moves before the deadline and expected hostilities in the Persian Gulf.

“If something breaks out, you’ll see a selloff, and if nothing happens there’ll be continued uncertainty,” said Ronald Daino, a vice president at Smith Barney, Harris Upham & Co.

Either way, Daino said, “that’s not a recipe for a good cake.”

Some selected blue-chip buying surfaced sporadically in the early going on rumors that the United States might consider a French peace plan. But the plan ultimately was deemed unacceptable because it promised to address Palestinian demands for an independent state on Israeli-occupied territory, and what was shaping up to be a modest rally ran out of steam.

“We’re clearly looking at a failure of diplomacy and a failure of sensibility, and the world is waiting for the other shoe to drop,” said Alan Ackerman, an executive vice president at Rich & Co.

Overseas, Japanese markets were closed for a holiday, while stock prices fell modestly in London.

Though some investors have sought a safe haven in the dollar and in precious metals, Ackerman noted that a substantial amount of cash remains on the sidelines.

“Professionals are in and out of the market without much conviction,” Ackerman said. “Nobody wants to be a hero.”

Oil, which has risen sharply ahead of the expected outbreak of war, was virtually unchanged. Crude for February delivery lost 33 cents to $30.45 a barrel on the New York Merchantile Exchange.

The bond market was also quiet, with the benchmark 30-year U.S. Treasury bond off 6/32, or $1.88 per $1,000 face amount.