"On the eve of any bombing campaign, the markets are bound to take some defensive positions because nobody knows what will happen," says TIME senior economics reporter Bernard Baumohl. How long will it go on? Will there be loss of U.S. life? Whenever a mini-war turns serious, says Baumohl, "American consumers tend to become glued to their TV instead of going out and buying stuff." That could put a damper on the current consumer-driven U.S. boom -- after all, consumer spending is the major economic engine in the U.S. -- and that worries the markets. Of course, these concerns could ease by week's end. "If it's seen that there's no major fallout, that this is just another Iraq-style campaign where nothing really serious comes of it, then this will just be a momentary pullback," says Baumohl. "And the Dow will resume its march to 10,000. And beyond."
NEW YORK: The markets have plenty of reasons to take a dive these days: Corporate earnings have been disappointing, and 10,000 has turned out to be an elusive milestone. But the Dow's 200-point slide Tuesday, and the Nikkei's subsequent 500-point loss Wednesday in response, also has plenty to do with the fact that NATO bombs are about to fall on Yugoslavia. The U.S. is going to war yet again against a dictator who doesn't seem to care, and once again there's no clear way out. And that's all the uncertainty these jittery markets need.