Chairman Alan Greenspan tonight praised the productivity-enhancing virtues of technology, but devolved into a discussion of the possibility that productivity growth is not accelerating fast enough to keep the economy from overheating.
Even so, Greenspan did not clearly suggest in his
The Business Council
in Boca Raton, Fla. that the Fed will hike interest rates again at its next meeting on Nov. 16.
Sounding a theme he has voiced often in recent years, Greenspan said: "
Consumer demand can accelerate so much that total demand could rise above even the productivity-augmented overall growth of potential. This seems to have been happening in recent years, owing to an expanding net worth of households relative to income and perhaps a perception that the recent acceleration in real incomes will continue."
"This extra demand," he continued, "can be met only with increased imports or with new domestic output produced by employing additional workers."
With the rising trade deficit threatening import growth and with the labor supply drying up (the unemployment rate, at 4.2%, is at a 29-year low), Greenspan said, "Market pressures must eventually emerge that work to contain such unsustainable growth."
Rising long term interest rates may be sufficient to get the job done, Greenspan implied. "The process of containment may already be significantly advanced," he said.
But he left room for the possibility that additional interest rate hikes will be necessary, saying: "We do not have enough experience with technology-driven gains in productivity growth to have a useful sense of the time frame in which market pressures contain demand. Moreover, it is not clear as yet how much cumulative impact the rise in real long-term rates over the past two years will have on future demand."
said it set a 2-for-1 stock split, its seventh such split in seven years. AOL reported that more than two million individual investors will get one share for every share they own on Nov. 8, with the remaining shares up for grabs starting Nov. 22. After the split's effective date, the company will have 2.2 billion outstanding shares. According to AOL, a stockholder who purchased 1,000 shares for $11,500 at its IPO and held his position, would now own 128,000 shares worth roughly $7.8 million. In post-market activity, AOL shares bounced 3 1/2 to 130, on 2.375 shares.
"How to Go Thermonuclear in After-Hours Trading," by
Step one: Announce two-for-one stock split at 5:16 p.m. EDT.
Step two: Cheer as stock skyrockets up
most-actives list in heavy trading. Well, heavy for MarketXT, anyway.
Aside from AOL's huge performance,
was strong, along with heavily traded
led most of the evening after dethroning original leader
around 6:00 p.m.
Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EDT. Prior to Sept. 15 Island offered trading from 8 a.m. to 5:15 p.m. EDT
MarketXT, formerly Eclipse Trading, offers after-hours trading to retail clients of Morgan Stanley Dean Witter's (MWD) Discover Brokerage and Mellon Bank's (MEL) Dreyfus Brokerage Services. Clients can trade 200 of the most actively traded New York Stock Exchange and Nasdaq Stock Market issues, 4:30 p.m. to 8 p.m. EDT Monday through Thursday. Prior to Oct. 11, MarketXT traded issues from 6 to 8 p.m.
Need more information on the ins and outs of after-hours trading? Click
here to see how the rules change when the sun goes down.
In other post-close news (earnings estimates from
First Call/Thomson Financial
; earnings reported on a diluted basis unless otherwise specified):
Earnings/revenue reports and previews
posted third-quarter earnings of 14 cents a share, missing the six-analyst estimate of 16 cents but up from the year-ago 3-cent loss, which included a charge.
posted third-quarter earnings of 51 cents a share, beating the 18-analyst estimate of 49 cents a share, and the year-ago 39 cents which included charges.
said that operating losses from its latest acquisition,
, will cut fourth-quarter earnings by "a few pennies", but would boost fiscal 2000 earnings. EMC said it also plans to assume a transaction and restructuring charge for more than $100 million for the quarter. The company recently posted third-quarter earnings of 29 cents a share, beating the 20-analyst estimate of 27 cents. According to the company's CEO, Michael Ruettgers, EMC and Data General would have had combined third-quarter earnings of 27 cents a share. For the fourth-quarter, the 20-analyst estimate has the company forecasted to earn 32 cents a share and for fiscal 2000, the 21-analyst estimates sees the EMC raking in $1.41 a share.
reported a 21-cent loss for the fourth-quarter, which included a charge related to a minority participation in Clark Enterprises. The results are narrower than the two-analyst estimate of a 26-cent loss but wider than the year-ago 18-cent loss.
warned investors that it expects to post second-quarter earnings 10% to 20% below the year-ago 26 cents a share. Methode said its second-quarter results will include a 6-cent charge from the bankruptcy of a large automotive customer. The four-analyst estimate has the company pegged to make 27 cents a share in the quarter.
posted third-quarter earnings of 88 cents a share, which includes an exchange translation loss. The report beats the three-analyst estimate of 81 cents a share and the year-ago 73 cents a share.
, parent of this publication, reported a third-quarter loss of 32 cents a share, in line with the six-analyst expectation and smaller than a year-ago loss of 40 cents a share.
posted a third-quarter pro forma loss of 15 cents a share, smaller than the lone-analyst estimate of a 38 cent loss per share, and a year-ago pro forma loss of 25 cents a share.
Offerings and stock actions
priced a 15.75 million-share IPO for
at $18 a share, the top of its expected $16 to $18 price range.
Salomon Smith Barney
priced a 22.5 million-share IPO for
Chartered Semiconductor Manufacturing
above its $18 to $19 price range, at $20 a share.
said it has boosted capital expenses for 1999 by $20 million, increasing its capital budget to $125 million. According to the company, the $20 million increase will be principally used to support offshore exploratory drilling.
Goldman Sachs also priced a 6 million-share IPO for
at the top of its $13 to $15 range at $15 a share.
The U.S. government announced its plans to file legal proceedings in an attempt to halt
planned acquisition of
, claiming the deal would boost the price of certain mainframe software.
said it does not expect Y2K to put a dent in its business and is forecasting PC prices to stabilize. According to the company, it has now captured more than 60% of the under-$1,000 PC market and will further pursue acquisitions involving networking and communications.