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To: long-gone who wrote (39653)	8/27/1999 1:39:00 PM
From: Rarebird	Respond to of 116810

NEW YORK (Reuters) - U.S. stocks were negative in Friday morning trading as Wall Street dissected fresh remarks from Federal Reserve Chairman Alan Greenspan. The Dow Jones industrial average was down 31 points, or 0.28 percent, at 11,167. The Nasdaq composite index was down 8 points, or 0.30 percent, at 2,766. The U.S. Treasury 30-year bond was off 14/32 to yield 5.93 percent. "I know we turned around, but it doesn't seem that dramatic. I think the markets are without direction today," said Peter Gottlieb, a vice president and portfolio manager at First Albany Asset Management in Chicago. Greenspan said central banks must watch asset prices in determining monetary policy, but he did not say whether he believed U.S. stocks are overvalued. Policymakers can no longer afford the luxury of simply looking at "the flow of goods and services" when they decide on the future course of interest rates, Greenspan said in prepared remarks in Jackson Hole, Wyo. "He clearly has expressed concerns about the speculation in the stock market," said Hugh Johnson, chief investment officer at First Albany Corp, in Albany, N.Y. The speech will put the market back on Fed Watch, glued to upcoming economic data and its potential signs of inflation. Johnson said he still believes the Fed will not raise interest rates again this year. "I still feel comfortable, but less comfortable, in concluding that,"Johnson said. Pierre Ellis, a senior economist at Primark Decision Economics said prior to Greenspan's remarks that the Fed is likely to raise interest rates again this year. "Probably they will have reason to tighten one more time," Ellis said. In addition, once more may not be enough, he said. "That would be bad news," Ellis said. Ellis said a key number in that picture will be the August payroll data, expected at the end of next week. "Tightening is OK, as long as it's slow and much anticipated," said. Earlier Friday morning, the U.S. Commerce Department said personal income for July was up 0.2 percent, spending was up 0.4 percent and the savings rate declined 1.4 percent. But the numbers were enough in range to keep from riling the market, Ellis said.