(Updates to midday)
By Jennifer Shaw
NEW YORK, July 22 (Reuters) - Stocks lost more ground at
midday Thursday following Federal Reserve Chairman Alan
Greenspan's latest warning that the central bank was ready to
act to forestall any pick-up in inflation.
The Dow Jones industrial average was down 76 points, or
0.69 percent, at 10,926 and the Nasdaq composite index slumped
down 68 points, or 2.4 percent, to 2,693.
In the broader market, declining issues beat advances 2 to
1 on moderate volume of more then 370 million shares on the New
York Stock Exchange.
"When Alan speaks the market listens. Unfortunately the
market did not like what he had to say," said Bryan
Piskorowski, market analyst at Prudential Securities.
"It's fairly hawkish. We were expecting more of a feel good
type-testimony," said Piskorowski.
The U.S. central bank chief said in his Humphrey Hawkins
testimony in Congress that the Fed would act "promptly and
forcefully" if it saw evidence of rising inflation.
Greenspan signaled that new interest rate rises were not
imminent and noted inflation continued to be remarkably
well-behaved.
The benchmark 30-year Treasury bond fell 24/32 and the
yield rose to 5.97 percent from 5.91 percent on Wednesday.
Some analysts said they saw little new in the Fed
chairman's remarks.
"Greenspan never says anything that gives us a warm fuzzy
feeling about the markets," said Arthur Hogan, a market analyst
at Jefferies & Co.
"The knee-jerk reaction was to sell on that news but I
didn't expect him to say anything much different than he did,"
said Guy Truicko, portfolio manager at Unity Management.
Technology stocks fell on profit-taking after their recent
run-up in anticipation of strong corporate earnings.
Compuware CPWR.O fell 7-1/8 to 26-1/2. The company
reported better-than-expected earnings. However Credit Suisse
First Boston cut its rating on the stock, citing license and
international revenues that were below forecasts.
America Online Inc. AOL.N was down 2-15/16 at 112-1/8 and
Amazon.com AMZN.O slumped 14-11/16 to 110-3/4. Both companies
reported earnings late Wednesday, with AOL topping estimates
but Amazon had a loss that was in line with expectations.
Meanwhile, several Dow components reported earnings that
were in line or slightly higher than expected.
McDonald's Corp. MCD.N was off 7/16 to 42-9/16 after it
matched Wall Street's estimates with a profit of 37 cents a
share, up from 25 cents a year ago.
Walt Disney Co. DIS.N rose 1/8 to 27-1/4 and Sears,
Roebuck & Co. S.N gained 5/16 to 42-1/2. The earnings per
share at both companies topped Wall Street estimates by a
penny.
REUTERS
Rtr 12:21 07-22-99 |
