Updated from 2:44 p.m.
The major stock market indices ended on the down side since
Federal Reserve Chairman
Alan G. finished speaking to the
Senate Banking Committee
Big Al gave his semiannual monetary
policy report and answered questions from various senators who were keenly interested in his views on tax cuts. The market was loving his speech, in which he emphasized
ongoing weakness in the economy -- an indication that the Fed likely will keep cutting interest rates to spur economic growth.
Dow Jones Industrial Average hit 11,000 during the speech, but it couldn't hang onto those gains into afternoon trading.
It wasn't any certain thing Greenspan said that dampened investor optimism. It was more likely something he didn't say that made the Dow and
Nasdaq do an about-face to the downside.
Jim Herrick, managing director of trading at
Robert W. Baird
, said all he heard in the speech was positive. The downturn probably has more to do with the typical skittish trading action of late, he said. For the long term, Herrick said, "we need to gain some confidence."
There's still no leadership in any particular sector driving the market, so stocks are drifting aimlessly.
were the most actively traded stocks on the Nasdaq, but lately, only Oracle and Sun were on the upside. And even those two were just barely positive.
got whacked yesterday in reaction to
bad news from competitor
, a data storage company. While Emulex was licking its wounds, getting back 4.7%, Brocade continued to get killed and ended down 15.5%.
, which is scheduled to report earnings after the closing bell, fell ahead of its announcement, down 6.3%.
Blue-chips in general pulled back.
had all been pushing up the index, but they slid after the psychologically important 11,000 mark was hit earlier today. The last time the Dow finished above 11,000 was back in September.
lately was the Dow's biggest detractor after it halted a late-stage trial for a drug used to treat neuropathic pain.
Back to top
Philadelphia Stock Exchange Oil Service Index
was down 0.3%.
was dragging the index down. Schlumberger was down for a second-straight day after announcing its $5.2 billion bid for
. Other energy sectors weren't faring well, either, with the
American Stock Exchange Oil & Gas Index
Back to top
Treasury prices were lower after Greenspan's testimony before the Senate Banking Committee this morning. Yields have not changed much.
Money managers should be buoyed by the fact that Greenspan sounded cautious about economic recovery, even saying that its major factors are subject to more "downside risk." He also stressed that the Fed needs to react faster to the changing situation, since new technology has enabled the private sector to recognize changes in and react more quickly to slowing demand. Though Greenspan didn't outright hint of imminent interest-rate cuts, his comments did reassure investors that the central bank is watching the economy closely and ready to intervene as quickly as possible.
The benchmark 10-year
Treasury note lately was down 2/32 to 99 16/32, raising its yield to 5.064%.
In economic news,
) for January came out slightly higher than expected. They rose 0.7% for the month, up sharply from the 0.1% increase recorded in December. Economists polled by
had predicted 0.6% growth. Excluding auto sales, the number was up 0.8%, compared with expectations of 0.4%. The year-to-year moving average is up by a healthy 5%. Although this figure is much lower than last year's readings, it is greatly improved from December's average of 1.4%.
BTM-UBSW Weekly Chain Store Sales Index
chart) rose 0.8% for the week ending Feb.10, after falling 0.1% in the prior week. The 12-month moving average slipped to 3.4% from 3.7%.
Heavy sales and promotional activity contributed to the improvement in retail sales in the opening weeks of the year. With shelves now cleared of discounted items, February numbers will be a truer reflection of consumer behavior.
Redbook Retail Average
chart) indicated that sales in the first week of February were up by 2% from year-ago levels, but were down by 0.9% from January. The forecast was for a decline of 0.1% from last month.
Back to top