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To: 2MAR$ who wrote (57)	5/25/2001 2:55:11 PM
From: 2MAR$	Read Replies (1) \| Respond to of 208838

N.Y. Stocks Dn; Mkt Watcher Sees Next Week Flat To Down By Kaja Whitehouse of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Major markets continue to slip Friday on low volume as the latest round of economic data has Wall Street worried that an economic recovery may be farther off than previously expected. Reports Friday morning on gross domestic product, home sales and durable goods are presenting a stronger case that the U.S. economy is not out of the woods yet. On the other hand, the data backs recent comments by Federal Reserve Chairman Alan Greenspan that rate cuts may continue, which is seen as a silver lining, market watchers said. Light volumes ahead of the Memorial Day holiday weekend suggest "limited activity in investment decisions," said Brian Belski, fundamental market strategist at U.S. Bancorp Piper Jaffray. Still, Belksi sees markets moving "flat to lower" next week as investors sit on recent gains, especially in the Dow Jones Industrial Average. The week should start off slowly as "people start to come back" from vacation and take time to digest Friday's news, he added. First-quarter gross domestic product data rose at a revised 1.3% pace, below lowered expectations of a 1.4% rise, the Commerce Department said. Previously, economists had estimated growth in the period of 2%. Meanwhile, existing home sales fell by 4.2% in April, after a 4.6% rise in April, according to the National Association of Realtors. At the same time, it was learned that orders for durable goods, or those meant to last three years or more, grew only 2.2% in March, below expectations of 2.9%, the Commerce Department reported. Positive words for semiconductors are supporting the group Friday, with the Philadelphia Semiconductor Index higher 1.25 to 660.02. Prudential Securities upgraded the group to strong buy from accumulate, anticipating the emergence of a new upcycle in orders. Applied Materials is ahead 50 cents to $54.96, KLA Tencor has gained 72 cents to $57.79 and Teradyne has advanced 78 cents to $44.70. Telecom stocks are floundering, with shares of VoiceStream Wireless Corp. down 2.35 to $97.69. The wireless concern's shares dropped after Sonera Holding BV cut its stake in VoiceStream to 2.1% from 4.1%, according to an amended Schedule 13D filed Thursday with the Securities and Exchange Commission. Biotechnology is lower following a run-up Thursday, with the AMEX Biotechnology Index down 12.7 to 612.80. Immune Response Corp. shares are off 48 cents to $5.82, while Abgenix shares are down $2.07 to $41.92, and MedImmune shares have dropped $1.69 to $41.08. Dragging the Dow lower, Wal-Mart Stores Inc. shares are off $1.25 to $51.63, while Honeywell International Machines stocks is off $1.26 to $50.24. Home building stocks dropped on concerns over home sales. Pulte Corp. shares are off $1.68 to $40.48, and Centex Corp. shares fell 97 cents to $37.50, while DR Horton Inc. stock dropped 49 cents to $20.76. Of the few stocks up on the Dow, Alcoa Inc.'s shares are the best performer, up 85 cents to $43.36. Online auctioneer QXl Ricardo PLC's American depository receipts gained more than 80%, or about $1.82, to $4.00 after it said revenue rose 43% to GBP3.1 million, from GBP2.2 million a year ago. Its losses in the quarter narrowed to GBP18.6 million, from GBP23.7 million last year. Walt Disney's stock has dropped as talk rattles trading floors that perhaps its new film "Pearl Harbor" will be more of a bust than a blockbuster. Shares of Disney are off 74 cents to $32.56. The Dow Jones Industrial Average has lost 87.44, or 0.8, to 11034.9, while the Nasdaq Composite Index has droped 20.9, or 0.9%, to 2261. The Standard & Poor's 500 Index is off 11.1, or 0.9%, to 1281.96. On the New York Stock Exchange, decliners outpace advancers by 1,541 to 1,413. Volume on the Big Board is 619 million. Up volume is 214 million while down volume is 391 million. -By Kaja Whitehouse, Dow Jones Newswires, 201-938-5393; kaja.whitehouse.dowjones.com (END) DOW JONES NEWS 05-25-01 02:54 PM

To: 2MAR$ who wrote (57)	5/31/2001 6:16:42 AM
From: 2MAR$	Read Replies (1) \| Respond to of 208838

Fed Officials Warn of Economic Weakness May 30 7:37pm ET By Brad Schade NORTHBROOK, Ill. (Reuters) - Economic weakness, not inflation, still poses the main threat to the U.S. economy, Federal Reserve policymakers said on Wednesday, adding that the mix of tax cuts and credit easing should help boost growth. But the Fed presidents sent no single message on how fast a recovery may come or its strength, underlining a sense in financial markets that the sputtering economy may take until well into next year before it regains its full vigor. "My optimism about the long term is not necessarily matched by optimism about the short term," Dallas Fed President Robert McTeer said at a San Antonio Economic and Business Society luncheon. While McTeer, usually known for his sunny outlook, said he does expects the U.S. to skirt recession -- often described as two back-to-back quarters of negative growth -- he doesn't know whether the economy currently is contracting. A cautious tone also was struck by Chicago Fed President Michael Moskow. "We now expect to see improvement later in the year, but there are significant risks facing us," Moskow said in addressing the Rotary Club of Wilmette, a Chicago suburb. Those risks include higher energy prices, weak economies abroad and soft consumer confidence, Moskow said. Both sets of comments echoed Fed Chairman Alan Greenspan who last week said the U.S. economy still is at risk of further economic weakness. U.S. Treasuries and stock markets, largely sidelined as they await the May U.S. employment report on Friday, were little moved by their remarks. TAX BOOST The $1.3 trillion tax-cut package just approved by Congress was cautiously welcomed by both Fed officials. Moskow said its timing was much more appropriate than past fiscal stimulus efforts by Congress. But he added its full impact would depend on whether consumers spent the tax-cut money or saved it. McTeer, however, said he looks for a mild economic boost starting this summer when tax refund checks are mailed out. "While this may not be the ideal tax cut, it should provide some helpful stimulus spread out over the next three quarters of a year to a year," he said. And he discounted speculation on Wall Street that the fiscal stimulus would put an early end to Fed monetary easing, saying the central bank generally responds to real economic conditions -- not tax policy. The Fed has lowered short-term interest rates by a steep 2.50 percentage points to 4.0 percent in the past five months to counter the rapid economic slowdown. President Bush also pressed his tax cut, saying it was needed to shore up growth. While most economists expect the Fed to cut rates at least another quarter percentage point, some Wall Street firms now say tax cuts reduce the need for much more monetary easing. Neither Fed official gave any hints on future credit easing, though they made clear they view cuts so far as laying the ground for a recovery. "The Fed's prompt response to the subpar economic growth of recent quarters reduced the likelihood that economic weakness would continue in 2002," Moskow said. McTeer said so far consumers have been the bright spot in an economy that was hurtling along at a 5 percent annual growth rate a year ago and then slammed on the brakes late last year as manufacturing slowed sharply and inventories built up. First-quarter growth slowed to a crawl at 1.3 percent, and McTeer said he doubts the final revision to first-quarter GDP, due at the end of June, will take that figure below zero. "I just think it is possible for consumption to hold up long enough to get that (manufacturing) going," McTeer said. And longer term the Fed president said he remains confident that the United States can return to the halcyon days of high growth rates, strong gains in labor productivity driven by technology improvements and low inflation that the nation enjoyed in the late 1990s -- a cocktail known as the new economy for which McTeer long has been a cheerleader. "It'll be back, but I don't know when," he said. INFLATION RISKS MUTED As for inflation, which financial markets have started to fret may surge again in face of aggressive Fed easing, Moskow said it did not make his short-term risk list. While the Fed can never ignore price pressures, Moskow was "cautiously optimistic inflation will remain in check," but added the Fed "can never ignore" price pressures. "When you survey the U.S. economy right now, the risk of economic weakness is greater than that of inflation," he said. McTeer, however, cautioned that during this slowdown, the economy may experience some pickup in inflationary pressures because production costs in a high-technology economy are much higher today, so fewer goods sold will cost more to produce. Despite that risk McTeer, who unlike Moskow currently is not a member of the Fed's rotating group of presidents who vote on the Fed's interest-rate setting committee, doubted the U.S. would return to the dismal economic mix of 1970s of slow growth and high inflation -- known as stagflation.