Stock Rally Suffers Its First Big Setback On Longer War Fear Indexes Off With Volume Up First time in three weeks that market came under heavier selling pressure.(A)

Byline: CHRIS GESSEL

Wall Street's war rally suffered its first setback on Monday. With the battle for Iraq leaning toward months rather than weeks, the major market averages sold off in heavier volume.

After a weekend of more debate over the war's length, punishing air attacks against the Republican Guard and a suicide bombing, the stock market plunged at the open.

U.S. officials said of the 8,000 precision bombs dropped in Iraq, 3,000 have been unleashed since Friday. Most targeted Iraqi forces ringing Baghdad. Still, Gen. Richard Myers, head of the U.S. Joint Chiefs of Staff, said there was no rush to storm the city. "We'll be patient," he said in Washington.

The stock market, which had drifted lower in tepid trading from Wednesday to Friday, did not share the sentiment. The Nasdaq gapped down and tumbled as much as 2.4%. The blue chip Dow Jones industrial average lost more than 216 points, or 2.7%. Unlike prior declines in the almost three-week rally, volume surged as big investors sold stocks.

But sellers ran out of steam 40 minutes after the open. The market began to claw its way higher. A burst of buying in the afternoon cut the Dow's loss to 75 points.

Wall Street looked poised to dodge another bullet as it did repeatedly last week. Yet sellers refused to retreat and knocked the market lower in the last hour of trading.