With all eyes on Washington as the man testified, stocks turned mixed after spending a majority of the morning higher. But the racy tech sector was still turning in a strong performance.
The man, of course, is
, who took to Capitol Hill today to deliver the first leg of his semiannual
testimony on the state of the economy, which is pretty good.
Yesterday, stocks rallied in part on hopes that Greenspan wouldn't say anything today to greatly upset the market. He didn't, and some are feeling optimistic about the market's prospects looking ahead.
"I think this market is looking to break out on the upside," said Dan Marciano, head of trading at
, this morning. "Technically it is set up on the upside."
Marciano said the
Dow Jones Industrial Average
is probably on its way to 10,000.
To be sure, however, the market's ride wasn't exactly smooth, particularly early this morning. When headlines of the prepared text of Greenspan's testimony hit newswires, the Dow -- which had been slightly higher -- came off the top and fell to 9473.24, down 79.44 from yesterday's close, before recovering and rising again.
Marciano was impressed by the strength of the market, with the Dow selling off initially to the chairman's speech and then bouncing right back.
He did note however, that "there's still a lot of bearish sentiment out there."
Despite that, he pointed out that there's a lot of money coming into the market and poised to enter, a big plus for stocks.
Overall, "I don't see a negative scenario here at least for a while," Marciano said.
The Dow peaked at 9611.33, and lately was down 28 to 9525. Financial services titan
was the biggest gainer in the average, up 3 3/16 to 111 11/16, while
, down 2 5/16 to 124 3/16, led on the downside.
Nasdaq Composite Index
was making the biggest jump and lately was up 26, or 1.1%, to 2369. Tech giants
were all higher. Microsoft was up 4 7/8 to 153 11/16 on positive comments from noted
Morgan Stanley Dean Witter
analyst Mary Meeker.
Intel gained 3 1/4 to 136, while Dell rose 1 3/8 to 86 1/4.
Other tech-sector barometers were higher. The
was up 1%, while the
Morgan Stanley High-Tech 35
gained 1.1%. The
Philadelphia Stock Exchange Semiconductor Index
was down 0.2%.
Internet stocks also gained.
TheStreet.com Internet Sector
index jumped 17, or 3.4%, to 508.
TheStreet.com E-Commerce Index
was down a fraction to 98.
was down 4, or 0.3%, to 1269.
gained 1, or 0.2%, to 399.
While stocks were mostly higher, Treasuries were suffering a beating. The 30-year bond was down 1 to 97 15/32, yielding 5.42%. (For more on the fixed-income market, see today's early
The week's most anticipated event, Greenspan's Humphrey-Hawkins testimony, concluded several minutes ago.
In his prepared remarks, Greenspan said "monetary policy must be ready to move quickly in either direction should we perceive imbalances and distortions developing that could undermine the economic expansion."
David Orr, chief capital markets economist at
, said with that comment Greenspan sounded "like a two-handed economist."
"I see a much more neutral stance on his part," as far as direction on interest rates, Orr said.
In the wake of the testimony, Orr said his sense was that whatever a person's view was on the outlook for interest rates before the testimony, after the testimony, "you still have the same view."
The chairman also had something to say about stock prices: "Equity prices are high enough to raise questions about whether shares are overvalued."
As for the economy, Greenspan said it "over the past year again performed admirably."
"Can this favorable performance be sustained? In many respects, the fundamental underpinnings of the recent U.S. economic performance are strong," he said. He also threw in a cautionary note: "But, after eight years of economic expansion, the economy appears stretched in a number of dimensions, implying considerable upside and downside risks to the economic outlook."
On inflation, Greenspan said: "Assuming that aggregate demand decelerates, underlying inflation pressures, as captured by core price measures, in all likelihood will not intensify significantly in the year ahead, though the Federal Reserve will need to monitor developments carefully."
The Fed, in its Humphrey-Hawkins report, expects gross domestic product to rise 2.5% to 3%; the consumer price index is forecast to increase 2%-2.5%, and household unemployment is expected to come in at 4%-4.5%.
Meanwhile, among other indices, the
Dow Jones Utility Average
was down 0.9%. The
Dow Jones Transportation Average
was down 0.5%, giving up some of its recent gains. The
American Stock Exchange Composite Index
New York Stock Exchange
, decliners were beating advancers 1,627 to 1,194 on 468 million shares. On the
Nasdaq Stock Market
losers were leading winners 1,984 to 1,846 on 555 million shares.
On the NYSE, 53 issues had set new 52-week lows while 38 had touched new highs. On the Nasdaq, 54 issues had set new lows while new highs totaled 36.
Most active on the Big Board was
, with 25.1 million shares changing hands. It was up 2 15/16 to 89 7/16.
On the Nasdaq, Dell was most active, with 20.7 million shares changing hands.
Greenspan Critiques Himself
Responding to a question from Republican Sen.
of Kentucky, Greenspan revisited the infamous "irrational exuberance" remark, referring to that
speech as "turgid" and intimating that it put most listeners to sleep. The Fed chairman, resting his head in his hand, also said that recognizing such a stock bubble is almost impossible to predict, a repudiation of his two-year-old remark. He did, however, say he had no doubt that stocks were "highly valued."
"So you have the same concerns?" Bunning asked.
"I have concerns -- I wouldn't say they're the same concerns," the chairman answered.
David A. Gaffen
Tuesday's Midday Movers
New American Healthcare's
stock was splitting in two, plunging 4 3/16 to 3 1/4, after the company lowered its earnings estimates through fiscal 2000 due to pricing pressures, lower volume growth and a slowdown in physical recruitment. For the fourth quarter, New American now expects a loss of 10 cents a share compared with previous estimates for a profit of 8 cents.
Credit Suisse First Boston
cut the stock to hold from buy. Last night, the company's chairman and chief executive, Robert H. Martin, resigned. President Thomas W. Singleton will replace Martin as chief executive; Paul B. Queally, a director, will become chairman.
In other news:
was down 3 3/8, or 15.8%, to 18 after last night saying it's no longer considering acquisition offers from other airlines. The stock surged last week on market chatter that
made a takeover offer for the company. UAL was down 11/16 to 61 5/16.
wondered if this was really the end of merger talks for AWA in a story
Corporate Executive Board
, which provides research and analysis on corporate strategy and operations, was up 4 3/8, or 23%, to 23 7/16 after
Salomon Smith Barney
priced its 8.1 million-share IPO top-end last night.
was up 3 3/16, or 8.5%, to 40 15/16 on news it will replace
in the S&P 500 after the closing bell Friday. Oryx, which is being acquired by
, was up 1/8 to 10 13/16.
U S West
was down 4 7/16, or 7.2%, to 57 3/4 after warning its 1999 earnings will grow by 10% -- less than expected -- because of a $300 million effort to eliminate network bottlenecks. The company said the move is a response to aggressive actions by competitors, including
plans to enter four of U S West's major markets -- Denver, Portland, Ore., Salt Lake City and Seattle.
Zenith National Insurance
was up 2 7/16, or 10.5%, to 25 5/8 after last night agreeing to sell its
Nationwide Mutual Insurance
for $272 million in cash.
was down 4 5/8, or 19.2%, to 19 5/8 even after meeting fourth-quarter earnings estimates of 13 cents a share last night.
was up 13/16 to 19 3/16 after posting fourth-quarter earnings of 4 cents a share, far short of the 16-analyst view of 23 cents but a reversal of the year-ago loss of 63 cents.
was up 2 3/4, or 10%, to 30 3/8 after reporting fourth-quarter earnings of 36 cents a share, beating both the 13-analyst estimate of 33 cents and the year-ago 30 cents.
was down 7/16 to 61 after posting fourth-quarter earnings of 27 cents a share, beating the 24-analyst view by a penny and up from the year-ago 20 cents.
was down 9/16 to 36 15/16 after recording fourth-quarter earnings of $1.07 a share, in line with the 18-analyst view and up from the year-ago 96 cents.
was up 2 1/8, or 9.6%, to 24 3/8 after last night posting fourth-quarter earnings of 53 cents a share, a nickel ahead of estimates.
was up 1 1/16, or 7.2%, to 15 13/16 after last night topping fourth-quarter earnings forecasts by a penny with a profit of 36 cents a share.
was down 2 3/16, or 5%, to 41 11/16 after last night posting a 5.4% drop in fourth-quarter same-store sales. The retailer also posted fourth-quarter earnings of 47 cents a share, matching the 20-analyst estimate and topping the year-ago 38 cents.