Greenspan Sparks Massive Afternoon Rally

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To the stock market, sometimes he's a villain, sometimes he's a hero.

Today,

Federal Reserve

Chairman

Alan Greenspan

, of "irrational exuberance" fame, was a hero on Wall Street.

Unofficially, the

Dow Jones Industrial Average

ended up 257.21, or 3.3%, to 8154.41. The

S&P 500

jumped 36.46, or 3.5%, to 1066.09, the

Nasdaq Composite Index

surged 62.47, or 3.7%, to 1760.27 and the

Russell 2000

rose 7.76, or 2.1%, to 376.00.

Meanwhile, with the strength in stocks today, the long end of the Treasury curve fell. The 30-year Treasury bond was recently down 8/32 to 105 1/32, yielding 5.17%.

Stocks were sharply higher through much of the session as the Street hoped Greenspan would hint -- in his Greenspanly way -- at a rate cut in his testimony before the

Senate Budget Committee

.

He didn't disappoint.

The major stock gauges popped modestly after headlines taken from the chairman's prepared text hit the news wires, then eased off, before rising steadily through the rest of the session and into the close.

Also appearing with Greenspan was Deputy Treasury Secretary

Lawrence Summers

. They were still testifying before the panel after the closing bell.

In other news, creation of the world's biggest financial-services company got the official okey-dokey today from the Fed. The Fed conditionally approved the merger between

Travelers

(TRV) - Get Report

and

Citicorp

(CCI) - Get Report

. Travelers rose 3 2/16 to 42 13/16, while Citicorp was up 10 7/8 to 106.

Breadth, to say the least, was good.

On the

New York Stock Exchange

, 2,357 advancers led 779 decliners on 902.9 million shares.

Nasdaq Stock Market

winners beat losers 2,698 to 1,442 on 933.2 million shares.

On the NYSE, 105 issues hit new 52-week lows while 63 hit new highs. On the Nasdaq, 147 issues were at new lows while new highs totaled 43.

Market data above are preliminary. Updated numbers and analysis will follow in the Market Roundup

.