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To: Les H who wrote (6936)	4/7/2003 9:05:48 PM
From: Les H	Respond to of 29592

Fed piecing together emergency economy plan By MARTIN CRUTSINGER The Associated Press 4/7/03 6:59 PM WASHINGTON (AP) -- Confronting new fears of recession, the Federal Reserve is refining an emergency economic rescue plan that includes further interest rate cuts and billions of dollars in extra cash for the banking system. The Fed's effort would be aimed at pulling the country out of a nosedive that has seen 465,000 jobs evaporate in just the past two months, raising fears among economists that the weak recovery from the 2001 recession is in danger of stalling out altogether. "Clearly, the Fed is in uncharted territory," said economist David Jones. "I think they will try some experimental moves." One key element of the plan Fed officials are considering hasn't been used successfully in a half-century. Based on comments by Federal Reserve Chairman Alan Greenspan and other Fed officials, the central bank is signaling that it is poised to move beyond its traditional buying and selling of short-term Treasury securities to the direct purchase of longer-term securities in an effort to pump more money into the banking system and influence long-term interest rates. Also, Fed officials have indicated they are prepared in the event of an unexpected shock to the system to lend massive amounts of money directly to commercial banks to make sure that financial markets do not freeze up. And as a third policy option, Fed officials have indicated they would explicitly state that if the federal funds rate is moved below its current 41-year low of 1.25 percent, it is likely to stay at the lower level as long as needed to get the economy on its feet -- which would help ease investors' worries about a sudden jump in interest rates down the road. The fact that Fed officials have been so open in discussing these options underscores the need the central bank sees to restore investor confidence that has been shaken by the fact that the Fed's aggressive two-year campaign to cut short-term rates has yet to produce a sustainable economic recovery. The Fed's target for the federal funds rate, the interest that banks charge for overnight loans, is now at a 41-year low of 1.25 percent. "The Fed is trying to buck up fragile confidence," said Mark Zandi, chief economist at Economy.com. "They know that everyone is asking the question: what can be done if the U.S. economy slides back into a recession and it ignites a deflationary cycle?" Greenspan in a speech in December in New York noted that the Fed from 1942 to 1951, as part of an agreement with the White House, successfully capped long-term Treasury yields at 2.5 percent as a way to hold down borrowing costs to finance World War II. However, private economists note that a later Fed effort dubbed "Operation Twist" -- in which the central bank sold short-term Treasury securities and bought long-term securities in the early 1960s in an effort to influence rates at both ends of the yield curve -- was judged to be a failure because the central bank did not make the transactions in large enough amounts. "If you want to produce results, you have to convince markets that you are serious and will do whatever it takes to alter the rate structure," said former Fed board member Lyle Gramley. The Fed made just such a massive response on Sept. 12, 2001, the day after the terrorist attacks, when it lent a record $46 billion to banks in a single day to keep the financial system functioning. Fed officials have indicated that their battle plan has been influenced heavily by reviewing the mistakes made by the Bank of Japan, which has been unable to jump-start that country's economy over a decade despite driving short-term interest rates to zero. Fed officials believe the Bank of Japan's biggest mistake was being slow to respond after that country's real estate bubble burst in the late 1980s. Vincent Reinhart, the Fed's top monetary policy staffer, told an economic conference recently that the Fed is striving to act pre-emptively before falling prices become entrenched. "The best policy for dealing with deflation is to avoid it strenuously by acting pre-emptively," he said. Because of this, some economists believe the Fed will not wait until its May 6 meeting to put its plan into effect, opting to cut the federal funds rate through an emergency conference call, possibly as soon as this week. However, other analysts argue that the Fed will likely wait, hoping that U.S. advances in the war against Iraq will bolster markets in coming weeks and restore confidence. These economists noted that Wall Street rallied Monday on the news that U.S.-led troops had swept into Baghdad. The Dow Jones industrial closed up 23.26 points after having been up more than 243 points earlier in the day. "The Fed is trying to say we are prepared and we are not going to become another Japan," said Sung Won Sohn, chief economist for Wells Fargo. But Sohn said if the war continues to a swift conclusion and the economy responds positively, the Fed will feel no need to cut rates further. nj.com

To: Les H who wrote (6936)	4/7/2003 9:07:44 PM
From: Les H	Read Replies (3) \| Respond to of 29592

Selected tech groups Semiconductors (129 stocks) _ percent stocks over MA Trend Price Phase _ market SOX 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Apr 7 315 65 63 67 37 61 2.72 _Apr 4 311 47 53 58 32 -55 2.75 DOWN _Apr 3 319 57 67 63 34 -89 2.97 _Apr 2 318 52 68 60 36 -94 2.79 UP _Apr 1 299 18 38 47 29 -67 2.59 _Mar 31 296 18 32 40 28 54 3.35 _Mar 28 310 21 56 54 31 83 4.44 _Mar 27 317 36 64 56 33 84 5.03 _Mar 26 321 45 69 59 36 88 5.37 _Mar 25 322 63 71 59 35 92 5.50 _Mar 24 320 64 71 55 33 97 5.51 DOWN _Mar 21 336 90 82 67 39 100 5.63 Networking (100 stocks) _ percent stocks over MA Trend Price Phase _ market NWX 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Apr 7 148 71 73 60 58 70 0.47 _Apr 4 148 73 69 57 57 50 0.22 _Apr 3 147 66 70 55 58 22 0.00 _Apr 2 148 68 72 55 58 -31 -0.26 UP _Apr 1 141 33 51 49 55 -30 -0.61 _Mar 31 140 29 43 44 52 39 -0.27 _Mar 28 143 34 54 50 53 71 0.25 _Mar 27 145 49 62 51 56 87 0.56 _Mar 26 147 56 66 49 55 87 0.74 _Mar 25 147 64 69 49 56 86 0.74 _Mar 24 143 56 58 44 53 90 0.76 DOWN _Mar 21 153 85 75 53 61 96 1.16 Biotechnology (115 stocks) _ percent stocks over MA Trend Price Phase _ market BTK 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Apr 7 338 65 75 68 40 99 1.98 _Apr 4 344 75 80 70 41 99 2.33 DOWN _Apr 3 358 84 83 70 43 97 2.44 _Apr 2 352 76 79 63 40 95 1.83 UP _Apr 1 336 49 69 56 34 96 1.35 _Mar 31 333 43 65 53 35 98 1.51 _Mar 28 341 56 72 54 35 99 1.85 DOWN _Mar 27 345 63 72 55 36 99 1.89 _Mar 26 341 54 68 50 34 98 1.68 _Mar 25 344 75 73 52 36 99 1.63 UP _Mar 24 335 68 65 46 33 99 1.37 DOWN _Mar 21 350 85 72 53 36 100 1.47 Software (122 stocks) _ percent stocks over MA Trend Price Phase _ market GSO 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Apr 7 104 61 62 51 42 -51 -0.36 UP _Apr 4 103 47 52 49 41 -49 -0.45 DOWN _Apr 3 105 57 64 52 43 -63 -0.40 _Apr 2 105 68 72 54 44 -82 -0.72 UP _Apr 1 100 40 47 37 37 -90 -1.09 _Mar 31 100 29 43 37 36 -76 -0.65 _Mar 28 102 37 45 43 37 -47 -0.09 _Mar 27 103 46 58 44 37 -27 0.25 _Mar 26 104 50 59 49 36 27 0.48 _Mar 25 104 56 58 46 38 44 0.61 _Mar 24 102 51 52 39 33 56 0.81 _Mar 21 106 79 67 50 42 71 1.40 DOWN Internet (101 stocks) _ percent stocks over MA Trend Price Phase _ market INX 10 d 21 d 50 d 200d Score Phase Change _----------------- ---- ---- ---- ---- ----- ----- ------ _Apr 7 104 67 68 65 58 97 3.93 _Apr 4 104 59 66 61 53 90 3.80 _Apr 3 104 65 73 58 50 77 3.68 UP _Apr 2 102 60 72 57 50 74 3.47 _Apr 1 100 42 60 47 47 82 3.55 _Mar 31 99 36 55 49 46 94 3.90 DOWN _Mar 28 103 48 66 49 48 97 4.37 _Mar 27 104 59 70 51 49 96 4.23 _Mar 26 103 68 70 49 52 96 3.87 _Mar 25 101 65 68 46 51 98 3.49 UP _Mar 24 99 53 54 39 46 99 3.31 DOWN _Mar 21 104 83 74 45 50 100 3.38 link to March data Message 18784890 link to February data Message 18683108 link to January data Message 18583813