Call U.S. Sen. Alfonse D'Amato a contrarian indicator.
Fed Chairman Alan Greenspan's
testimony today, the senator from New York predicted that the
Dow Jones Industrial Average
would jump 120 points. Instead, the Dow, down about 100 points twice during the day, dropped 55.03 to close at 6983.18. Other market indices followed. The
fell 6.35 to 805.68. The
Nasdaq Composite Index
dropped 7.14 to 1340.55. And the
, which tracks small-cap stocks, slipped 2.94 to 363.85.
The bond market also had a lousy day. The benchmark 30-year Treasury bond fell 1 1/2 points to yield 6.77%.
In his testimony, Greenspan indicated that inflation will return at some point and that the Fed will have to boost interest rates, perhaps on a pre-emptive basis. He also questioned the heights the stock market has reached. "These gains have obviously raised questions of sustainability," he said.
"He's sending a clear message the he is concerned about levels of the equity markets," says Arthur Micheletti, chief economist and investment strategist at
Bailard Biehl & Kaiser
in San Mateo, Calif. In light of that, "what's surprising is that stocks didn't sell off worse," he said. The stock market was saved in the last hour because the bond market closed for trading, he said, so "bonds stopped applying downward pressure" on the stock market.
In the market today,
pushed ahead on its the strength of its gangbuster earnings yesterday and a host of upgrades today. Its stock climbed 3 3/4 to 75 3/4. Other computer companies followed, including
, which added 3 1/4 to 64 5/8, and
, which rose 7/8 to 81 3/4.
shook up the fast-food world by hinting that it will sharply cut prices. Its stock fell 2 3/8 to 44 7/8, while competitor
dropped 1 1/2 to 20 3/4.
approved a 3-for-1 stock split and announced a three-year, $8 billion stock buyback. Its stock added 1/4 to 133 1/2
watched its stock fall 3 5/8 to 55 1/8 after
analyst Anthony Langham said the company has "aggressive accounting practices ¿ difficulty in getting answers to probing questions and apparent problems in gross margin." He also downgraded the stock to neutral from outperform. Lucent said that its accounting practices are conservative and that it must keep some information private because of the competitive nature of its business. Investors also may have reacted negatively to
announcement yesterday that it would re-enter the telecommunications equipment market, having spun off Lucent, an equipment concern, just last summer.
climbed 2 1/2 to 39 1/8 after its chief financial officer said he expects the company's current subscriber base of about 8 million to remain unchanged in the current quarter.
didn't open today after a sharp run-up yesterday. The company said it will make an announcement tomorrow morning containing material information, most likely about its past financial results, which the company said "appear to be falsified."
said its board approved a recapitalization plan that includes a self-tender offer to buy back as many as 12 million shares, or about 21% of its outstanding stock. The plan also includes cutting the quarterly dividend to 25 cents from 37 cents. In addition,
upgraded the stock to market perform from market underperform.
also raised its six-month rating to outperform from market performer. The energy company's stock rose 3 1/2 to 31 5/8.
agreed to be acquired by
in a stock swap worth $61 for each Petrolite share. Petrolite is a specialty chemicals maker, while Baker Hughes sells oil and gas products. Petrolite's stock jumped 10 to 58 3/8. Baker Hughes' stock closed at 35 1/2, unchanged.
United Auto Group
, which yesterday said it expects first-quarter net income will fall below analysts' projections of 25 cents per share, saw its rating cut to neutral from buy by
ABN Amro Chicago
. Its stock fell 4 3/4 to 20.
amended its dual-brand agreement with
, saying it will convert 306 of its Carl Jr.'s restaurants into Carl Jr.'s/Green Burrito restaurants over the next four years, up from an originally planned 140. CKE's stock slipped 4 3/8 to 19 7/8.
, which is trying to take over
, had its rating cut to sell from portfolio buy by
. Its stock fell 2 7/8 to 45 1/4.
watched its shares fall after it warned investors that a slowdown in domestic orders in the third quarter ended Jan. 21 may hurt its earnings over the next two quarters as well. Stock of the company, which makes products that enable transmission of signals over fiber-optic cable, was down 7 3/4 to 12 1/2.
dropped 6 3/4 to 37 3/4 after it delayed shipping its Polyscan products. Etec makes laser direct imaging pattern generation systems for the semiconductor and electronics industries.
was upgraded to short-term buy from hold by
. Its stock rose 7/8 to 35.
By Erle Norton