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To: Mephisto who wrote (24575)	2/9/2000 6:09:00 PM
From: Mephisto	Respond to of 24894

Stocks End Down; Dow Off 258.44 Wednesday February 9, 4:33 pm Eastern Time Stocks End Lower on Interest Rate Worries and Computer Hacker Problems; Dow Falls 258.44 to 10,699.16 and Nasdaq Is Off 64.70 NEW YORK (AP) -- Blue-chip stocks tumbled today amid worries about rising interest rates, while a rash of attacks on leading Web sites deflated the high-flying technology sector. the Dow Jones industrial average fell 258.44 to close at 10,699.16. Broader stock indicators were also lower. The Standard & Poor's 500 fell 29.86 to 1,411.89, and the Nasdaq composite index fell 64.70 to 4,362.80. Declining issues outnumbered advancers by a 2-to-1 margin on the New York Stock Exchange, with 2,006 down, 1,029 up and 485 unchanged. NYSE volume totaled 1.041 billion shares as of 4 p.m., vs. 1.044 billion in the previous session. The Russell 2000 index of smaller companies fell 1.49 to 536.00. The Dow's losses were broad-based, with American Express, Citigroup (NYSE:C - news) and Home Depot all dropping on concerns that the Federal Reserve will continue raising interest rates this year, potentially threatening corporate profits. "Investors in these stocks are anticipating that the Fed will eventually be successful in forcing a slowdown in the economy," said Ned Riley, chief investment strategist at State Street Global Advisors in Boston. The Fed has raised short-term interest rates four times since June 1999 in an effort to slow the economy enough to keep inflation under control. Since the last increase, announced a week ago, investors have been shying away from blue-chip companies, fearful that their profits will be the first to suffer if interest rates continue to rise. "They're waiting to find out just how far the Fed will go," said Eugene G. Mintz, financial markets analyst at Brown Brothers Harriman in New York. ''They've already committed a lot of money to this market and they're a little nervous.'' Riley said technology shares held up a bit better because investors believe they are growing quickly enough to withstand the crunch of higher rates. "The economy is dictating that interest rates will go up," Riley said. "That's limiting the leadership of the market to thecompanies that have very rapid earnings growth." One of those companies was Cisco Systems. The company said late Tuesday that profits in its fiscal second quarter topped analysts' expectations. Cisco also announced a 2-for-1 stock split, to take effect March 22. The company has been one of the Nasdaq's strongest performers in recent months as demand has soared for its computer networking equipment. But Cisco alone couldn't lift the technology-dominated Nasdaq, which saw many Internet stocks rattled by a spate of Web site attacks by computer hackers. Shares of ETrade were down amid news the online broker had become the latest high-profile victim of Internet vandalism. Amazon.com (NasdaqNM:AMZN - news), eBay (NasdaqNM:EBAY - news) and Yahoo! slipped a day after Internet vandals hacked into their Web sites, disrupting access for consumers. Buy.com, which also succumbed to the attack Tuesday as its shares traded publicly for the first time, rose today. Also today, Microsoft (NasdaqNM:MSFT - news) dropped on the news that European Union regulators have opened an examination into the launch of Microsoft's new Windows 2000 operating system. Mirroring antitrust concerns in the United States, several competitors have complained that Windows 2000 would give Microsoft a dominant position in the software market, EU officials said. Dow component Merck fell after the Wall Street Journal reported that five of the company's drugs will lose U.S. patent protection within two years, threatening profits and revenue. Boeing fell after last-ditch talks with a federal mediator failed to produce an agreement on a labor contract and engineers and technicians walked off the job.

To: Mephisto who wrote (24575)	2/9/2000 6:15:00 PM
From: Mephisto	Read Replies (1) \| Respond to of 24894

Analyst Cohen Wary on Campaign Vows By DUNSTAN PRIAL AP Business Writer NEW YORK (AP) -- Superstar Wall Street analyst Abby Joseph Cohen said Wednesday that the presidential candidates figure to be the only wild card in determining the success of the U.S. stock markets in 2000. The candidates, eager to exploit the current budget surplus to further their presidential aspirations, could potentially upset what has been a sound domestic economic policy for the past decade, said Cohen, an analyst with Goldman Sachs & Co. They should avoid falling over themselves to offer larger tax cuts until actual surplus figures are available, she added. ''This shouldn't become a spitting contest in that regard." Cohen, arguably the most high-profile ''bull'' -- or optimist -- on Wall Street, spoke at Goldman Sachs' Annual Foreign Exchange Conference in Manhattan. None of the candidates were mentioned by name. But both leading Republican candidates, U.S. Sen. John McCain and Texas Governor George Bush, have proposed large tax cuts based on budget surplus projections. Cohen suggested the budget surplus be used to fulfill the nation's social obligations and to pay down the national debt. Unforeseen political upheaval overseas could also roil U.S. markets, Cohen speculated. But barring either of those circumstances, Cohen said the longest running bull market in history should extend through 2000. Cohen, who has achieved near-celebrity status for her accurate and optimistic predictions, said investors will do well in 2000, but probably not as well as in 1999, when the both the technology heavy Nasdaq composite index and the benchmark Dow Jones industrial average ended the year at record highs. So far this year, the Dow is down about 800 points, or about 7 percent, on the year, while the Nasdaq, after dropping as much as 10 percent from its high, is up about 6 percent. But Cohen remains optimistic. ''This isn't the year it gets ugly," Cohen said. ''Stock investors will be happy, but probably notas giddy as they have in recent years. Inflation won't be the culprit, however. Instead, Cohen said stocks won't mirror the record breaking gains of recent years because they have finally achieved their proper valuations. In other words, stocks are now worth what they're supposed to be worth. Cohen offered a simple explanation for the decade-long bull market. In the early 1990s stocks were significantly undervalued due to lousy economic conditions in the U.S. and the poor reputation of corporate America. But as the U.S. economy turned around and technology companies began to emerge as significant players within that economy,the stock market took off. And the emergence of the Internet late in the decade only seemed justify the high valuations investors had given many high-tech companies in the computer hardware and software sectors, she said. "The technology stocks and companies were getting the respect they deserved. These stocks are now appropriately priced," Cohen said.

To: Mephisto who wrote (24575)	2/17/2000 3:11:00 PM
From: Mephisto	Respond to of 24894

Greenspan: Inflation Still a Danger Federal Reserve Chairman Alan Greenspan Says Current Good Times Are 'Unprecedented' but Warns in Report to Congress That Inflation Dangers Still Exist By MARTIN CRUTSINGER AP Economics Writer WASHINGTON (AP) -- Federal Reserve Chairman Alan Greenspan today declared the current good times''unprecedented in my half-century of observing the American economy.'' But he cautioned that inflation dangers still exist and put financial markets on notice to expect further interest rate increases. Presenting the Federal Reserve's twice-a-year report on the economy to Congress, Greenspan said conditions are remarkable with the 9-year-long expansion, a record, turning in exceptionally rapid growth that has driven unemployment to a 30-year low of 4 percent. Ninety minutes before Greenspan spoke, the Labor Department reported that wholesale prices were unchanged in January and that when the volatile energy and food sectors are excluded, the Producer Price Index fell by 0.2 percent. Even though inflation has remained low outside of a burst in energy prices, Greenspan said, this favorable condition cannot last unless the growth rate slows to less than the 4 percent-plus gains of the past three years. Greenspan tied his worries to the tight labor markets and fears that workers will begin to demand higher wages that could set off an inflationary spiral. Since last June, the central bank has been trying to slow the economy, raising a key interest rate it controls by a full percentage point. However, Greenspan said today there is little evidence that those four quarter-point increases in the federal funds rate have had much impact. ''To date, interest-sensitive spending has remained robust and the FOMC (Federal Open Market Committee) will have to stay alert for signs that real interest rates have not yet risen enough to bring the growth of demand into line with that of potential supply,'' Greenspan said in testimony to the House Banking Committee. ''Achieving that alignment seems more pressing today than it did earlier.'' Analysts believe that the FOMC, the group of Fed board members in Washington and Fed regional bank presidents that sets interest rate policy, will boost rates for a fifth time March 21 and very likely will raise rates a sixth time in May. "'Mr. Greenspan is telling us to expect higher interest rates" said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis. "He is warning that this economic prosperity will be jeopardized unless we contain the imbalances." On Wall Street, the Dow Jones industrial average fell 100 points before recovering in early afternoon to a 25-point gain. The technology-heavy Nasdaq index soared back into record territory, up 125 points. David Jones, chief economist at Aubrey G. Lanston & Co. said that while Greenspan ''was hawkish in tone ... it doesn't imply anything more than we were expecting. That is why the markets have not reacted very much.'' In response to questions, Greenspan told the committee that he was concerned about the recent rise in oil prices, which have pushed the per- barrel price above $30 for the first time since the Persian Gulf War in 1991. Greenspan said oil inventories have fallen to exceptionally low levels, leaving the country vulnerable in coming months to a big price spike if supplies suddenly drop further. But he also noted that because of conservation moves by businesses, the amount of energy needed in U.S. production has declined significantly in recent years. In his testimony, Greenspan noted that tight labor markets have yet to increase wage pressures and in fact unit labor costs, a measure of wages tied to output, actually declined in the second half of 1999. He tied this good news to a remarkable rebound in the growth of productivity, the amount of output per hour of work, which helps keep inflation low by allowing employers to pay for higher salaries through increased production rather than raising prices. But even if the gains in productivity continue, he said, they could have a downside for the economy by pushing soaring stock prices even higher. The Wall Street boom has contributed to the surge in consumer demand as investors have spent their stock gains with abandon. As part of his testimony, Greenspan presented the Fed's new economic forecast for 2000. In terms of growth, the Fed was slightly more optimistic than the administration or the Congressional Budget Office, predicting the gross domestic product will expand by around 3.5 percent this year. President Clinton based his current budget on a slower 2.9 percent prediction. ''Although the outlook is clouded by a number of uncertainties, the central tendencies of the projections ... imply continued good economic performance in the United States,'' Greenspan told the committee. The Fed was also more optimistic that inflation will slow this year, predicting that an inflation gauge tied to the GDP will rise by around 1.75 percent to 2 percent, compared to an increase of 2 percent last year. As he has in the past, Greenspan urged Congress to devote the huge federal budget surpluses being generated by the good economic times to paying down the national debt rather than using the money for increased federal spending or cutting taxes. ''Maintaining the surpluses and using them to repay debt over coming years will continue to be an important way the federal government can encourage productivity-enhancing investment and rising standards of living,'' Greenspan said. ''We cannot afford to be lulled into letting down our guard on budgetary matters.''