NEW YORK (CNN/Money) -
U.S. stocks tumbled early Wednesday as investors concluded after President Bush's State of the Union address that war with Iraq is almost inevitable.
Around 9:35 a.m. ET, the Nasdaq composite (down 15.19 to 1326.99, Charts), Dow Jones industrial average (down 115.80 to 7973.04, Charts) and the Standard & Poor's 500 index (down 10.32 to 848.22, Charts) all lost more than 1 percent.
Bush's State of the Union Address discussed a number of issues, including plans for what he called "strengthening the economy," but what investors were most focused on what he had to say about the potential for war with Iraq. He stressed the need for Saddam Hussein to be forthcoming on weapons of mass destruction and tried to draw links between the Iraqi leader, the al Qaeda terrorists and the attacks of September 11, 2001.
In terms of new dates to focus on, Bush said that the United States would ask the U.N. Security Council to meet on February 5th to discuss potential actions against Iraq. Additionally, February 14th marks the day when U.N. weapons inspectors are expected to provide a follow-up to their report earlier this week.
Also impacting trade, the Federal Reserve's two-day policy setting meeting ends Wednesday. Although few on Wall Street expects interest rates to change, economists suspect the Fed could change its 'bias' -- its view on where the economy is headed -- toward weakness, indicating that a rate cut could come sometime later this year.
In corporate news, shares of Altria (MO: down $1.48 to $36.90, Research, Estimates), formerly Philip Morris, fell more than 4 percent after Kraft Foods (KFT: down $4.51 to $31.60, Research, Estimates) warned that 2003 profits won't meet estimates due to problems in Latin American markets. Altria is the parent company of Kraft and is also expected to report its own results during trading hours Wednesday. The company is expected to have earned 92 cents per share.
European markets were mixed at midday, while Asian-Pacific stocks closed lower.
Treasury prices rose slightly, sending the 10-year note yield down to 3.96 percent from 3.97 percent late Tuesday. The dollar fell against the euro and the yen as global investors responded to the war talk.
Brent oil futures fell 37 cents to $39.90 a barrel in London. Gold remained around $370 an ounce.