SAN FRANCISCO -- Stop me (oh ho ho) stop me, stop me if you think that you've heard this one before:
spoke about the likelihood of higher interest rates today, sending blue-chip stocks reeling.
But in a new twist on the old song, tech favorites couldn't resist the siren selling in "old economy" stocks, and the
Nasdaq Composite Index
retreated from its record-setting pace. The
set another record but even that small-cap proxy cooled off in the final hour, as the majority of stocks reflected the mood of most songs by
. (Depressed, that is.)
"Until market forces, assisted by a vigilant
, effect the necessary alignment of the growth of aggregate demand with the growth of potential aggregate supply, the full benefits of innovative productivity acceleration are at risk of being undermined by financial and economic instability," Greenspan said in a
speech at a conference at
Those remarks (and others) poured cold reality on anyone who thought Friday's
employment report would prompt the Fed to rein in its aggressive monetary stance. A rethinking of that notion -- which helped spur stocks higher across the board
Friday -- snapped the five-session winning streak of the
Dow Jones Industrial Average
, which fell 196.70, or 1.9%, to 10,170.50 after trading as low as 10,121.48.
The price of the 10-year Treasury note fell 7/32 to 100 18/32, its yield rising to 6.42%.
But Brian Belski, chief investment strategist at
George K. Baum
in Kansas City, Mo., argued Greenspan didn't depart from his recent commentary and thus wasn't truly responsible for the action -- a view shared by many.
"You're seeing a normal pullback from
the Dow being overextended as of Friday," Belski said of today's setback. "It's all normal-type action."
Further supporting the notion that today's decline was more of a technical move than fundamental story, financial stocks were relatively unscathed today, the strategist noted. "It's more a case of some of these Dow stocks bounced up too much from oversold."
The Dow was most restrained by tech components
, as well as
The Dow avoided a wider loss thanks to a big advance by
, which leapt 5.1% in concert with its recent spinoff
. Agilent soared 40% after announcing new switching technology designed to increase the speed of fiber-optic networks.
With the Agilent news plus a fiber-optic conference opening in Baltimore, shares of several names in the sector were sharply higher.
jumped 15.3% and
Advanced Fibre Communications
rose 14.8%, just to name a few.
Net Faves Rally
With those names in the lead and big Internet favorites such as
also in favor, the Nasdaq Composite rose as high as 4980.15 around 2 p.m. EST.
But the late afternoon proved troubling and the Comp closed off 9.94, or 0.2%, to 4904.85 as mega-cap tech names such as Microsoft, Intel, and
followed their blue-chip counterparts lower.
shed 16.2%, continuing to retreat from last week's big advance. Its
, freshly traded as of last week, sledded 17 1/8, or 21.3%, to 63 1/8.
Market players debate the significance of round numbers, but "the Comp rolled right off 5000 and came back with the rest of the broader market," noted one equity trader. "Everyone was yelling '5000, 5000' and it never stood a chance. This group will continue to do well, but today you saw some of the volatility increased."
Behind strength in Yahoo! and CMGI,
TheStreet.com Internet Sector
index rose 31.64, or 2.6%, to a record 1252.74. Meanwhile,
TheStreet.com New Tech 30
rose 101.76, or 13%, to 883.87, getting a big lift from
Internet Capital Group
, which rose 21% after
upped its recommendation to strong buy. Unveiled Jan. 5, the TSC New Tech 30 is a market-cap-weighted index focusing on tracking the so-called hot money part of the market. A list of index components is available at
The Russell 2000 gained 3.76, or 0.6%, to 601.64 as small-cap tech and biotech names continue to enjoy heightened interest from traders. The
American Stock Exchange Biotech Index
was the standout in the biotech group, rising 152% after reporting successful testing of its cancer treatment on laboratory mice.
followed the Dow lower, dipping 17.89, or 1.3%, to 1391.28 as weakness in most major industry groups overshadowed runaway gains in tech components such as
Advanced Micro Devices
, which rose 15.7% after
unveiling a one-gigahertz microprocessor.
No Unifying Theme
Despite the hubbub about Greenspan, there was no overarching factor moving stocks today, traders said.
Jay Meagrow, vice president of trading
in Cleveland, noted airline stocks were hurt by negative comments from
while utility stocks got "pummeled" after
, down 30%, warned of a profit shortfall. The
American Stock Exchange Airline Index
shed 2.7% while the
Dow Jones Utility Average
slid 9.40, or 3.2%, to 280.80
Meanwhile, retailing stocks were flattened by a
profit warning by
, which dumped 39.3%. The
American Stock Exchange Retailing Index
Despite the concerns about certain names and groups, Meagrow observed the buying interest in small-caps remains strong, although "I don't think anybody is chasing" anything.
New York Stock Exchange
trading, 1.03 billion shares were exchanged while declining stocks led advancers 1,908 to 1,116. In
Nasdaq Stock Market
action just under 2 billion shares traded while losers led 2,190 to 2,099. New 52-week lows bested new highs 189 to 27 on the Big Board while new highs routed new lows 505 to 121 in over-the-counter trading.
Among other indices, the
Dow Jones Transportation Average
fell 58.36, or 2.4%, to 2376.09 and the
American Stock Exchange Composite Index
gained 8.65, or 0.9%, to a record 1022.36.
For coverage of today's top stocks in the news, see the Company Report, published separately