By David Schepp BBC News Online North America business reporter

Stocks on US markets have maintained their triple-digit losses despite a speech by President George W Bush to the United Nations, in which he urged the world-governing body to put pressure on Iraq to disarm.

Bush: Iraq has thumbed its nose at the UN

It was a largely predictable response given that Wall Street in recent weeks and months has largely taken the possibility of war with Iraq into account.

"It's a questioning of anticipating when - not if," said Barry Hyman, chief equity strategist at Ehrenkrantz King Nussbaum.

"It is affecting the stock market, and it will affect the stock market because you have a reallocation of resources", he said, adding that war with Iraq would tend to have an immediate, upward push on the price of oil.

In mid-afternoon trading, shares of blue chip stocks as measured by the Dow Jones industrial average were lower by more than 130 points, or 1.5%.

Fluctuating oil prices

In the US's last bout with Iraq, during 1991's Gulf War, oil prices surged in the US, pushing petrol prices higher.

If the US launched another attack on Iraq, it would hope to avoid the run-up of oil prices, which previously helped lead the nation into recession.

Following Mr Bush's speech, however, oil prices surprisingly fell - to well below $30 a barrel, after starting the day above that level.

Oil prices have surged in recent weeks on world markets in anticipation of a US invasion of Iraq.

Also following Mr Bush's speech, defence stocks moved higher in anticipation of increased business with the prospects of military action.

Bush criticism

Mr Bush told the UN in his speech the current regime in Iraq presented a clear and present danger to peace in the world.

The budget position should be a cause for concern on Wall Street right now

Ian Shepherdson, economist

Other world leaders, however, have said the US itself posed a threat to world peace and was acting out of its own self interest with the hopes of maintaining cheap oil prices and its commercial interests in the Middle East.

Former South African President Nelson Mandela earlier this week said the US president's plan to invade Iraq was "clearly a decision that is motivated by George W Bush's desire to please the arms and oil industries in the United States of America".

Fiscal discipline

Of greater to concern to many in Washington are rising budget deficits, sparked after last year's massive $1.35 trillion tax cut and massive federal spending following the September 11 attacks.

In a speech before Congress, delivered at the same time as Mr Bush's UN address in New York, US central bank chief Alan Greenspan warned that undisciplined spending threatened the country's economic stability.

Failure to re-establish rules that rescued the US from its last period of deficits would be a "grave mistake", the Federal Reserve chairman said.

Wall Street appeared less concerned with the rising deficits, focusing more on weak corporate profits and rising oil prices.

That lack of anxiety over rising deficits has some market watchers puzzled.

"The budget position should be a cause for concern on Wall Street right now," said Ian Shepherdson, chief US economist at High Frequency Economics.

"But [Wall Street] right now - for reasons I don't fully understand - is willing to believe the official forecasts at least from the Congressional Budget Office (CBO) if not from the White House."

Still, Mr Shepherdson said, even those projections remain "wildly optimistic".