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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Clint E. who wrote (34778)	10/17/2001 10:25:58 AM
From: Suresh	Read Replies (1) \| Respond to of 68077

Hi Clint, I sold most of the tech related investment at the open. I have opened a few trading long positions after the dump (VRTS, RFMD) Later, Suresh

To: Clint E. who wrote (34778)	10/17/2001 1:41:05 PM
From: Clint E.	Respond to of 68077

Greenspan: Attacks Caused Pullback By Glenn Somerville WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan said on Wednesday that U.S. consumers and businesses pulled back from spending in the shock of the Sept. 11 attacks but expressed hope the economic damage would be temporary. ADVERTISEMENT Testifying before the Congressional Joint Economic Committee as a fresh wave of fear swept Capitol Hill about anthrax, Greenspan tried to sound a reassuring note about the country's long-term prospects while conceding the immediate outlook remained clouded. ``The pronounced rise in uncertainty also has damped consumer spending and capital investment; households and businesses, confronted with heightened uncertainty have pulled back from the marketplace, though that withdrawal has been partial and presumably temporary,'' the Fed chief said. In the days after hijackers slammed airplanes into the World Trade Center in New York and into the Pentagon, Greenspan said economic activity dropped sharply as Americans ``stayed riveted to their televisions and away from shopping malls.'' In response to questions, Greenspan said, ``the overall bias remains biased toward economic weakness as we have stated innumerable times'' in statements issued by the policysetting Federal Open Market Committee. But he said the country's outlook down the road remained bright, adding that the economy was still standing even though it has faced ``enormous'' pressures. ``For the longer term, prospects for ongoing rapid technological advance and associated faster productivity growth are scarcely diminished,'' he said. BID TO SOOTHE ANXIETY Analysts said that Greenspan was attempting to offer a balm to worried consumers. ``He is trying to show a little confidence that the economy is going to recover and prosper and try to dampen some of the anxiety that goes along with uncertainty,'' said Gary Thayer, chief economist for A.G. Edwards and Sons Inc. in St. Louis. Many private economists believe the United States tipped into a recession amid the shockwaves from the attacks that left more than 5,000 people dead or missing, but many are also predicting a solid rebound next year. Greenspan said a fundamental change in attitude toward risk has flowed from the tragic events. The country continues to be on edge, particularly amid a rash of cases of anthrax. As the Fed chief testified, House Speaker Dennis Hastert said there was evidence anthrax had gotten into the Senate ventilation system and said lawmakers should go home after the day's business. Staff members in Senate Majority Leader Tom Daschle's office have tested positive for anthrax exposure after handling a letter laced with the bacteria this week. Greenspan said a higher risk premium was likely to find its way into the costs of doing business in future. ``The shock of the tragedies at the World Trade Center and the Pentagon has reshaped those assessments of risk and required an abrupt realignment of prices in many markets to reflect the expected costs of operating in what we now recognize as a more hostile world,'' the Fed chief said. ``But these adjustments in prices and in allocation of resources, when complete, represent one-time level adjustments, without necessary implications for our long-term growth prospects,'' he added. Greenspan said it will take time to completely assess the final impact of the attacks on economic activity. ``But in the weeks ahead, as the initial shock continues to wear off, we should be able to better gauge how the ongoing dynamics of these events are shaping the immediate economic outlook.'' Greenspan refused to be drawn into a debate whether a fiscal stimulus package, now making its way through Congress, was likely to be effective. The Bush administration has urged adding up to $75 billion of stimulus to give the economy a boost, but the House Ways and Means Committee last week approved a $100-billion set of proposals -- setting the stage for a congressional tug-of-war about whether it was overly generous or not targeted toward the economic sectors most in need. PERMANENT TAX CUTS PREFERABLE In response to questions, Greenspan said only that if fiscal policy measures were soundly based, investors will respond appropriately. He said a cut in capital gains tax, charged on investment gains, likely would have only a minimal stimulative effect on the economy and said that, in general, consumers spend more if tax cuts are permanent rather than temporary ones. He said the attacks will damage productivity growth in the short run, which has been partly responsible for the record U.S. economic expansion that has lasted more than a decade. ``The level of productivity growth will presumably undergo a one-time downward adjustment as our economy responds to higher levels of perceived risk but once the adjustment is completed, productivity growth should resume at rates in excess of those that prevailed in the quarter-century preceding 1995,'' he said. The Fed has cut rates nine times since the start of 2001, including twice since the attacks. As of the Fed's last rate cut on Oct. 2, overnight rates now stand at 2.5 percent, close to the annual rate of inflation. Many economists think the Fed could chop rates down to 2 percent in coming months but may pause there.