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Stocks Close Mixed After Greenspan's Testimony

However, the tech sector posted solid gains.

Stocks ended mixed while the technology sector posted solid gains in the wake of

Federal Reserve

Chairman

Alan Greenspan's

TST Recommends

Humphrey-Hawkins

testimony.

Meanwhile, Treasuries were crushed. The benchmark 30-year bond was down 31/32 to 97 16/32, yielding 5.42%.

The

Dow Jones Industrial Average

fell 8.26, or 0.1%, to 9544.42. The

S&P 500

drooped 1.00, or 0.1%, to 1271.14.

The

Nasdaq Composite Index

jumped 34.21, or 1.5%, to 2376.22.

TheStreet.com Internet Sector

jumped 23.56, or 4.8%, to 514.54, while

TheStreet.com E-Commerce Index

fell 0.18, or 0.2%, to 97.71.

Positive talk from Mary Meeker, the prominent

Morgan Stanley Dean Witter

analyst, on

Microsoft

(MSFT) - Get Report

and several Internet stocks helped boost the tech and cyberspace sectors.

The

Russell 2000

rose 1.18, or 0.3%, to 399.00.

The chairman, in an appearance before the

Senate Banking Committee

, said the "economy's performance should remain solid this year, though likely with a slower pace of economic expansion and a slightly higher rate of overall inflation than last year."

As for the stock market, the Fed chief said: "Equity prices are high enough to raise questions about whether shares are overvalued."

As for monetary policy going forward, 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."

Greenspan will conclude his semiannual Humphrey-Hawkins testimony tomorrow before the

House Banking Committee

.

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% to 2.5%, and household

unemployment

is expected to come in at 4% to 4.5%.

On the

New York Stock Exchange

decliners beat advancers 1,710 to 1,261 on 770 million shares. On the

Nasdaq Stock Market

losers beat winners 2,143 to 1,999 on 912 million shares.

On the NYSE, 81 issues set new 52-week lows while 45 touched new highs. On the Nasdaq, 82 issues set new lows while new highs totaled 48.

Most active on the Big Board was

America Online

(AOL)

, with 34.2 million shares changing hands. It was up 1 15/16 to 88 7/16.

On the Nasdaq, most active was

Dell

(DELL) - Get Report

, with 28.4 million shares changing hands. It was up 2 3/16 to 87 1/16.

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

2:54 p.m.: Stocks Still Mixed but Treasuries Down Markedly

Treasuries were sharply lower while stocks were mixed in the wake of

Federal Reserve

Chairman

Alan Greenspan's

Humphrey-Hawkins

te stimony.

The 30-year Treasury bond was down 1 5/32 to 97 10/32, yielding 5.43%. Some of the blame for the selloff was laid on this comment from Greenspan: "The Federal Reserve must continue to evaluate, among other issues, whether the full extent of the policy easings undertaken last fall to address the seizing up of financial markets remains appropriate as those disturbances abate."

The

Dow Jones Industrial Average

was down 6 to 9547. The

S&P 500

was down fractionally at 1272. The

Nasdaq Composite Index

, meanwhile, was up 37 to 2379. The

Russell 2000

was up 1 to 399.

TheStreet.com Internet Sector

was up 23 to 514.

TheStreet.com E-Commerce Index

was up fractionally at 98.

Positive comments from Mary Meeker, the prominent

Morgan Stanley Dean Witter

analyst, on

Microsoft

(MSFT) - Get Report

helped boost the software behemoth.

CNBC

reported the comments before the open. Meanwhile, Meeker also said that

Yahoo!

(YHOO)

,

eBay

(EBAY) - Get Report

and

Amazon.com

(AMZN) - Get Report

would post in-line or better-than-expected financial results,

CNBC

reported.

Greenspan, in his appearance before the

Senate Banking Committee

, indicated a neutral stance by the Fed on interest rates. He said in his prepared remarks that "monetary policy must be ready to move quickly in either direction should we perceive imbalances and distortions developing that could undermine the economic expansion."

Greenspan is slated to finish off his semiannual Humphrey-Hawkins testimony tomorrow before the

House Banking Committee

.

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.

The Fed, in its Humphrey-Hawkins

r eport, expects

gross domestic product

to rise 2.5% to 3%; the

consumer price index

is forecast to increase 2% to 2.5%, and household

unemployment

is expected to come in at 4% to 4.5%.

Greenspan was also relatively sanguine on the inflation picture going forward.

"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 chairman said.

On the

New York Stock Exchange

, decliners were beating advancers 1,727 to 1,175 on 596 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,102 to 1,872 on 710 million shares.

On the NYSE, 69 issues had set new 52-week lows while 42 had touched new highs. On the Nasdaq, 66 issues had set new lows while new highs totaled 45.

On the Big Board,

America Online

(AOL)

was most active with 29 million shares changing hands. It was up 2 1/8 to 88 5/8.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active on volume of 24 million shares. It was up 1 15/16 to 86 13/16.

2:02 p.m.: Stocks Remain Mixed as Greenspan Testimony Ends

Stocks were mixed this afternoon while the tech-laden

Nasdaq Composite Index

was significantly higher, up 1%.

The market's focus has been on Washington and

Federal Reserve

Chairman

Alan Greenspan's

Hawkins-Humphrey

testimony, which kicked off today before the

Senate Banking Committee

. Tomorrow he will appear before the

House Banking Committee

.

The major market barometers spent much of the morning on the plus side. However, the

Dow Jones Industrial Average

and

S&P 500

tumbled into negative territory earlier this afternoon.

Greenspan's appearance before the Senate panel has concluded. In the question-and-answer period, Greenspan said he was concerned about the high valuations in the market; however, whether it is "gripped by irrational exuberance" cannot be known until after the fact.

The chairman addressed equity valuations in his prepared remarks, when he said: "Equity prices are high enough to raise questions about whether shares are overvalued."

The Dow was down 29 to 9524. The

S&P 500

was down 3 to 1269. The Nasdaq Comp was up 32 to 2374. The

Russell 2000

was up 1 to 399.

TheStreet.com Internet Sector

was up 18 to 509, while

TheStreet.com E-Commerce Index

was up fractionally at 98x.

The 30-year Treasury bond was getting pounded and was down 1 2/32 to 97 14/32, yielding 5.43%.

Market breadth was negative.

On the

New York Stock Exchange

, decliners were beating advancers 1,686 to 1,162 on 527 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,045 to 1,848 on 625 million shares.

On the NYSE, 60 issues had set new 52-week lows while 39 had touched new highs. On the Nasdaq, 59 issues had set new lows while new highs totaled 41.

On the Big Board,

America Online

(AOL)

was most active with 27 million shares changing hands. It was up 2 5/82 to 89 1/8.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active on 22 million shares. It was up 1 3/4 to 86 9/16.

Sector Focus: AT&T & the Baby Bells

The market didn't like the news out of

U S West

(USW)

this morning as its stock fell 4 5/16, or 8%, to 57 1/4. U S West tumbled after warning that its 1999 earnings will grow by 10% -- less than the 12% to 14% earnings-per-share growth it previously committed to -- because of a $300 million effort to eliminate network bottlenecks. The company said the move comes in response to aggressive moves by competitors, including

AT&T's

(T) - Get Report

plans to enter four of U S West's major markets -- Denver; Portland, Ore.; Salt Lake City and Seattle -- by year's end. AT&T slumped 13/16 to 85 3/4.

The

Philadelphia Stock Exchange Phone Index

was down 3.3%.

Other notable losers were

Bell Atlantic

(BEL)

, which fell 3 5/8, or 6%, to 56 7/16, while

BellSouth

(BLS)

dropped 2 to 46.

1:09 p.m.: Midday Musings Market Turns Mixed as Blue-Chips Give Back Gains

11:59 a.m.: Stocks Cling to Modest Gains as Greenspan's Testimony Continues

Greenspan

is speaking! Greenspan is speaking!

As

Federal Reserve

chairman Alan Greenspan concluded his prepared testimony and fielded questions from the

Senate Committee on Banking, Housing, and Urban Affairs

, the stock market continued to rebound from its initial displeasure with his remarks.

Perhaps the selling that greeted Greenspan's

Humphrey-Hawkins

testimony was rash and overdone. Or maybe traders decided just to overlook the chairman's cautionary comments about inflation and the level of equities and focus on the forces behind

yesterday's blockbuster gains.

Technology stocks remained at the forefront of the advance, leading the

Nasdaq Composite Index

up 41k to 2383.

Microsoft

(MSFT) - Get Report

led the index higher after

Morgan Stanley Dean Witter

analyst Mary Meeker made positive comments about the software giant.

The Nasdaq was getting a further boost from bellwethers

Dell

(DELL) - Get Report

,

Intel

(INTC) - Get Report

and

Sun Microsystem

(SUNW) - Get Report

. The

Nasdaq 100

was lately up 2%.

Internet leaders such as

America Online

(AOL)

,

Amazon.com

(AMZN) - Get Report

and

Yahoo!

(YHOO)

were also rising sharply.

TheStreet.com Internet Sector

index was lately up 22 to 513 while

TheStreet.com E-Commerce Index

was higher by 1 to 99.

The

Dow Jones Industrial Average

, which dropped about 95 points from its initial high of 9568.94 in the wake of Greenspan's testimony, was lately up 15 to 9568 after trading as high as 9611.33.

"You have to realize how much money could have been made when that first announcement

about Greenspan's testimony came out and the market went down," said the head trader at one Wall Street firm. "It's amazing to me what the rush to buy or sell in that second will do. I can imagine there's a lot of money lost. The first inclination is 'get out', and then you're buying it back. Now you're at the point of 'now what do we do?' That's why the market is kind of flat."

American Express

(AOL)

and

Citigroup

(C) - Get Report

paced Dow gainers, as financial names overall were strong. The

Philadelphia Stock Exchange/KBW Bank Index

was lately up 1% while the

American Stock Exchange Broker/Dealer Index

was higher by fractionally.

"Obviously the market is heading higher and the tape looks good," the trader continued. "But it's choppy. It's a very selective market. The banking sector is obviously hot. There are takeover rumors in any Wall Street firm on any given day."

The trader, who requested anonymity, said he's heard a variety of rumors in recent days concerning

PaineWebber Group

(PWJ)

,

Chase Manhattan Bank

(CMB)

and

J.P. Morgan

(JPM) - Get Report

. PaineWebber was recently up fractionally while Chase was up 1% and J.P. Morgan was higher by 2%. "It's getting ridiculous," he said.

Beyond technology and financials, "gaming has been real hot and an area to make money," the trader observed, noting recent gains by

Circus Circus

(CIR) - Get Report

and

Mirage Resorts

(MIR)

. "But to me it goes deeper than sectors as a whole. It's about individual stocks and individual happenings. I don't think you can go out and buy any one sector because you get one piece of negative news

on a particular company and the punishment has been great."

Among broader market proxies, the

S&P 500

, once as low as 1263.35, was lately up 4 to 1276 while the

Russell 2000

was up 2 to 400.

In

New York Stock Exchange

trading, 357 million shares have traded while declining stocks lead advancers 1,536 to 1,214. In

Nasdaq Stock Market

activity, 433 million shares have traded while winners lead 1,901 to 1,707.

As is their wont, bond traders were being more pessimistic than their equity counterparts. As stocks recovered and then held steady, the bond market remained near its morning lows. The price of the 30-year Treasury bond was lately down 26/32 to 97 22/32, its yield rising to 5.41%.

10:57 a.m.: Stocks Up Modestly as Market Begins to Digest Greenspan Testimony

Before the opening of trading today,

Morgan Stanley Dean Witter

analyst Mary Meeker talked up

Microsoft

(MSFT) - Get Report

and former

Federal Reserve

governor Wayne Angell (now chief economist at

Bear Stearns

) mused about

Dow

12,000. Both helped the market get off to a very modest upward bias this morning, with technology stocks leading the way.

But if Meeker and Angell are heavyweights, they are

Jerry Quarry

(R.I.P.) to Fed chairman

Alan Greenspan's Muhammad Ali

. They are

Michael Spinks

to Greenspan's

Mike Tyson

(when he was terrifying as a boxer, not as a person).

Randall "Tex" Cobb

to Alan G's

Larry Holmes

. You get the picture.

When Greenspan's

Humphrey-Hawkins

testimony hit the Fed's web site at 10:00 a.m. EST (before the actual speech began), the bond market got flattened and the tenuous rally in stocks went the way of

Gerry Cooney

(down, that is). Lately, stocks were back on their feet, but a little wobbly.

"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," Greenspan said in the most glaring sentence of the testimony. "Recent strong growth in spending cannot continue without a pickup in inflation unless labor productivity growth increases significantly further."

The price of the 30-year Treasury bond, virtually unchanged ahead of the testimony, quickly dropped to a near one-point loss. Lately, the price was down 27/32 to 97 20/32, its yield rising to 5.41%.

Later in his introductory remarks, Greenspan said: "Labor markets remain exceptionally tight and the economy evidently retains a great deal of underlying momentum despite the global economic problems and the still-visible remnants of the earlier financial turmoil in the United States. At the same time, no evidence of any upturn in inflation has, as yet, surfaced."

Greenspan also said: "Equity prices are high enough to raise questions as to whether shares are overvalued." But, overall, the testimony seems to indicate the Fed remains (as always) vigilant against the onset of inflation, but does not see any such dangers at present. That helped take some of the starch out of the initial knee-jerk by traders.

The Dow Jones Industrial Average hit a high of 9568.94 in the early going as it tried to push

yesterday's blockbuster advance further. Shortly after 10:00 a.m. EST, the Dow was as low as 9473.24 (or about 95 points off its high). The index has since bounced and lately was up 33 at 9585.

The

Nasdsaq Composite Index

raced to as high as 2350.69 in its initial upswing, then cooled its jets, but remained in positive territory throughout. Lately, the index had regained its footing and was up 31 to 2373.

In addition to Microsoft, the Nasdaq has been aided by Internet titans such as

Amazon.com

(AMZN) - Get Report

,

Yahoo!

(YHOO)

and

Excite

(XCIT)

.

TheStreet.com Internet Sector

index was lately up 21 to 512 while

TheStreet.com E-Commerce Index

was higher by 1 to 99.

Broader market proxies were modestly higher as investors digested Greenspan's comments. The

S&P 500

, once as low as 1263.35, was lately up 5 to 1278, while the

Russell 2000

was up 1 to 399.

In

New York Stock Exchange

trading, 241 million shares have traded while declining stocks lead advancers 1,333 to 1,217. In

Nasdaq Stock Market

activity, 301 million shares have traded while losers lead 1,584 to 1,548.

9:54 a.m.: Tech Sector Jumps at Open

The tech sector was enjoying solid gains early on, led by Internet stocks ahead of

Federal Reserve

Chairman

Alan Greenspan's

semiannual

Humphrey-Hawkins

testimony on the state of the economy before the

Senate Banking Committee

, which is slated to begin at 10 a.m. EST.

The chairman will also testify tomorrow before the

House Banking Committee

.

The

Nasdaq Composite Index

was up 12 to 2354. The

Russell 2000

was up 1 to 399.

TheStreet.com Internet Sector

was up 15 to 506.

TheStreet.com E-Commerce Index

was up 1 to 99.

The

Dow Jones Industrial Average

was down 15 to 9537. The

S&P 500

was down 2 to 1270.

The benchmark 30-year Treasury bond was down 12/32 to 98 3/32, yielding 5.38%.

Most Up at Open -- NYSE

Xerox (XRX) - Get Report, up 2 3/8 to 123

.

Most Up at Open -- Nasdaq

eBay (EBAY) - Get Report, up 5 1/8 to 283 7/8

.

Most Down at Open -- NYSE

Telebras (TBH) , down 1 11/16 to 67 1/2

.

Most Down at Open -- Nasdaq

Nordstrom (NOBE) , down 2 3/4 to 41 1/8

: The company posted a 5.4% drop in fourth-quarter same-store sales and an in-line earnings report yesterday. The retailer posted fourth-quarter earnings of 47 cents a share, matching the 20-analyst

First Call

estimate and topping the year-ago 38 cents.