This didn't help much...
Wednesday September 8, 2:20 pm Eastern Time
U.S. stocks turn negative after Meyer's remarks
(Updates to early afternoon)
By Amy Collins
NEW YORK, Sept 8 (Reuters) - U.S. stocks turned negative Wednesday afternoon in what traders said was a reaction to remarks by Federal Reserve Governor Laurence Meyer that added to interest rate jitters.
The Dow Jones industrial average was down 28 points, or 0.26 percent, at 11,005. The Nasdaq composite index was down 23 points, or 0.84 percent, at 2,813.
The 30-year U.S. Treasury bond was up 4/32 point, with a yield of 6.06 percent.
``Everyone was watching the wrong member of the Federal Reserve,' said Dick Stein, a vice president and chief technical analyst at Noble International Investments of Boca Raton, Fla. ``Meyer sounded as hawkish as you could possibly be.'
In a speech to the National Association for Business Economics, Meyer said the tight U.S. labor market threatened to fuel inflation.
``He's been saying that since before he became a Fed governor,' William Cheney, chief economist for John Hancock Funds, said before the market turned on the news.
Stein said Meyer's remarks were magnified by media coverage. ``Meyer's never had the pulpit, so to speak,' he said.
Earlier remarks by Fed Chairman Alan Greenspan steered clear of economic forecasting. In a speech at Grand Valley State University in Grand Rapids, Mich., Greenspan discussed the role of improved technology and education in adding to ``this country's rather impressive economic record.'
Also Wednesday afternoon, U.S. Treasury Secretary Lawrence Summers reiterated that a strong dollar is in the best interests of the United States.
The newsmaker of the morning was Goldman Sachs' influential and bullish market strategist Abby Joseph Cohen. She raised her 1999 earnings estimate on the Standard & Poor's 500 companies and raised her target for the Dow industrials.
``She's got a lot of credibility,' said Alfred Kugel, Stein Roe & Farnham's senior investment strategist. ``It's almost as if the market turned as she was talking.'
Cohen boosted her earnings estimate on the S&P 500 companies to a combined $51 a share from $49 for 1999, and to $55 a share from $53 for 2000. Her new year-end target for the S&P 500 is 1,385, up from 1,350 previously.
For the Dow, Cohen raised her target to 11,500 for 1999. In July the Dow topped her previous estimate of 10,300.
``The new targets are based on 1) increased earnings estimates for 1999-2000, 2) ongoing modest inflation, and 3) the expectation that much of the 1999 rise in bond yields has already occurred,' Cohen said in a report to investors |
