Little Orphan Alan - TheStreet

Little Orphan Alan

Investors are anxious for Greenspan's big center-stage number, even though they don't expect any surprises.
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"Tomorrow, tomorrow, I love ya' tomorrow, you're only a day away."

SAN FRANCISCO -- As hard (and frightening) as it is to imagine traders singing the theme song from

Annie , there was some joy in

Mudville today that all the waiting has come to an end. The waiting, of course, for

Federal Reserve

chairman

Alan Greenspan

to deliver the first half of his

Humphrey-Hawkins

testimony.

Greenspan's address Thursday could quite possibly roil financial markets, but traders hate uncertainty more than bad news. Moreover, his testimony isn't expected to contain any big surprises. (Then again, an "expected surprise" is a pretty juicy oxymoron.)

"He's probably going to be saying the same stuff we've been hearing: labor markets are tight, we can't rely on foreign capital, the savings rate is too low, the wealth effect," etc., said Art Micheletti, chief economist and investment strategist at

Bailard Biehl & Kaiser

in Foster City, Calif. "If he doesn't say anything new or out-of-the-ordinary, that means the Fed is going to continue to push up rates."

When the fourth-quarter productivity report on

Feb. 8 blew away expectations, a great roar was heard from the pits as traders deduced the end of the Fed's rate-hike cycle was nigh. A little more than a week later, however, the mood is decidedly different.

Recalling that the fourth-quarter

GDP

came in at 5.8% (not to mention today's housing data), Bryan Piskorowski, market analyst at

Prudential Securities

said, "We have an economy growing twice as fast as the Fed would like."

Piskorowki acknowledged "the Fed is going to have to address the

economy's strong growth component with at least two or three tightenings between now and mid-year." Most likely, the central bank will thrust another 25 basis points of tightening on the market at each of its next three gatherings, he said.

Nonetheless, "the tech story can still survive" the prospect of ever-higher interest rates, the analyst believes.

Micheletti, among others, is less favorably disposed.

"People keep playing the momentum game but it's getting narrower and narrower. Fewer stocks are going up and keeping this thing alive," he said. "At this point you're not investing anymore -- people are speculating and you never know how long these things go."

Given the rising commodity prices, Micheletti said a 50-basis-point rate hike in March is not out of the question, especially if tomorrow's

producer price index

and/or Friday's

consumer price index

prove stronger than expected.

"It looks like the Fed is going to be raising rates," he said. "So far the market has expressed a little concern but has largely been ignoring it. The market and the Fed are heading toward a collision."

Then again, the market and the economy have continually confounded the skeptics, including Micheletti. He has long urged investors to take a cautious approach, and a

year ago he called the market "grossly overvalued."

Finally, "props" to Greenspan for walking the fine line between those who think he's fueled the bull market by being overly accommodative and those who think he's holding it back by being too restrictive.

The Saga Continues

On Feb. 10,

PurchasePro.com's

(PPRO)

underwriters priced its

long-delayed follow-on offering: 3 million shares were offered at $80 per last Thursday, slightly below its closing price of 83 1/16 that day.

Despite the addition of 3 million shares to PurchasePro.com's roughly 28 million share float, the stock has soared since the secondary. After today's 8.5% gain, shares of the business-to-business e-commerce provider are now up over 60% since Feb. 10, closing today at 133 1/4.

When I last visited the PurchasePro.com

story, I noted how the company had added some high-profile underwriters to its syndicate, namely

Credit Suisse First Boston

and

Robertson Stephens

.

The point of that column was that adding CS First Boston and Robbie Stephens to its underwriting stable was a coup for PurchasePro.com, if for no other reason than the brokerages were likely to initiate coverage of PurchasePro.com with favorable recommendations shortly after the secondary.

Today, CS First Boston initiated coverage with a strong-buy rating and 12-month price target of 205. Yesterday,

Bear Stearns

-- another member of the syndicate -- started coverage with a buy and a 275 target.

After the close of trading Wednesday, PurchasePro.com posted fourth-quarter results, featuring a 318% increase in revenue (to $2.7 million) but a widening per-share loss of 24 cents (excluding charges) vs. 15 cents in the previous year.

Thomson/First Call

had no estimates for the company.

For the year, the company posted similar results. Revenue rose 253% to $6 million from $1.7 million in 1998 while losses rose to 94 cents a share vs. 49 cents in 1998.

A beckoning deadline prohibits me from delving deeper into the report or the company's conference call, although I will revisit the issue tomorrow (barring some huge developments in the market).

In the meantime, think about this: A company with $6 million in revenue last year now has a market capitalization of over $4 billion. But while it's likely PurchasePro.com shares will suffer some retrenchment after the latest burst, the same company still has the unplayed trump card of new coverage from Robbie Stephens.

Sometimes it's a relief to not be allowed to own stocks.

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

taskmaster@thestreet.com .