By Amy Baldwin
The Associated Press

NEW YORK - While the threat of war with Iraq has sent stocks falling sharply for more than a month, it is trading volume, not prices, that has taken the biggest hit and that poses the biggest risk to the market.

Most investors aren't selling - they're not trading at all, and that has given Wall Street extremely low volume and in turn the big price swings that are becoming routine.

Since the market's short-lived New Year's rally, volume has fallen sharply to about 1.3 billion shares a day on the New York Stock Exchange from an already sluggish 1.5 billion shares, a drop of approximately 13 percent.

"Light trading volume means there is no interest on the part of retail investors and on some institutions, as well. We have a market in which no one is open for business," said Peter Cardillo of Global Partner Securities Inc.

With fewer shares changing hands, stocks are much more vulnerable to big declines. With few, if any, buyers, sellers have to drop their prices.

But stocks have also experienced brief surges as blips of optimism drive prices higher. The gains have also been the result of technical trading - investors who sold short, thinking the market would go even lower, have periodically been forced to buy stock to cover their positions.

That was the case with the market's rally Friday, when the Dow Jones industrials gained 103 points.

Volume on the NYSE this month is down from an average of 1.6 billion for October, according to Lowry's Research Reports in Palm Beach, Fla. "It is worrisome. For one thing, very light volume is symptom of a bear market," said Richard Dickson, senior market strategist, at Lowry's. Dickson is troubled by the notion that there's more room for volume to drop off further and for prices to continue their sharp decline.

He said there are plenty of potential sellers waiting for bad news about Iraq or the economy to prompt them to unload shares. And meanwhile, no one wants to buy.