While Wall Street insiders are not predicting a crash a
la 1929 or 1987, they say the stock market will have a
hard time ascending to new highs as long as there is so
much uncertainty about events around the world.

Just yesterday, stocks fell and gold gained ground as
nervous investors decided to lock in profits and
increase their cash and gold reserves to see them
through the troubled times ahead.

The market fell at the end of the day because Wall
Street trading desks wanted to own as little stock as
possible overnight, given the uncertainty of what might
happen with Iraq or impeachment, said Paul
Hennessey, head of trading at Boston Partners Asset
Management.

News on Iraq or Clinton "could throw the market in
either direction at any time," he said.

The Dow Jones industrial average dropped 32.70 to
8,790.60 yesterday.

Seventy minutes after the market closed, Clinton told
Congress that he had ordered an airstrike on Iraq.

The move delayed the impeachment debate and vote
in the House of Representatives - for an indefinite
time.

That's not good news for the markets, since investors
detest uncertainty and would like the Iraq and Clinton
situations to be settled.

The Dow Jones industrial average fell 500 points since
mid-November.

"Some observers fret that a preoccupied and
politically weakened White House will fail to
effectively address global economic problems," said
Edward Kerschner, chief investment officer at
PaineWebber Inc.

So far, the United States has managed to avoid the
economic malaise that has left one-third of the world's
countries in recession. Sources in Clinton's
administration say there's no reason that should
change.

Treasury Secretary Robert Rubin, for example, said
that in the long run what determined the stock-market
values were underlying economic fundamentals, and he
said on that score, "The most likely scenario is still, as
you look forward, solid growth and low inflation."

-- Beth Piskora - 12/17/98