Global Markets: Wall Street battered but unbowed

Defiant US markets have overcome war concerns to scale back heavy losses made earlier in the week and last Friday.

With the markets losing all of their post-New Year gains early last week, last Thursday's brief rally to end five days of losses came as welcome relief.

Techs provided most of the support to help the market shrug off disappointing earnings news from long-distance provider AT&T as well as news of a unique quarterly loss from McDonald's.

Texas Instruments helped out sentiment among semiconductors with better-than-expected earnings.

The rally proved to be all too brief as war concerns once again spooked investors and hammered the markets on Friday.

The Dow Jones Industrial Average experienced its biggest one-day drop this year as it tumbled 238 points to 8,131.

Both the Dow Jones and the S&P 500 hit lows not seen since last October as all sectors weakened ahead of a UN Weapons Inspection Report and a White House State of the Union address.

The Dow Jones sank below 8,000 on Monday this week as Hans Blix's critical UN Weapons Inspection report on Iraq raised fears that Bush would step up his war rhetoric on Tuesday.

Even oil stocks slumped on fears that Saddam Hussein would irrevocably damage oil fields.

There were signs investors were diverting funds away from the stockmarket and towards property as the National Association of Realtors reported a 5.3% increase on sales of existing homes in December.