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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Gersh Avery who wrote (6907)	3/22/2005 4:52:25 PM
From: Vendit™	Read Replies (1) \| Respond to of 8752

Just as I thought....Greenspan: U.S. Stocks Fall on Fed Statement; S&P 500 Drops to 7-Week Low March 22 (Bloomberg) -- U.S. stocks fell as the Federal Reserve's statement that inflation pressures ``have picked up in recent months'' spurred concern that policy makers may have to raise interest rates more rapidly. Benchmark indexes closed at their lowest in at least seven weeks. In announcing the seventh quarter-point increase in its benchmark rate since June, the central bank reaffirmed its plan to boost rates at a ``measured'' pace. Share prices dropped from the day's highs afterward, with financial shares such as Citigroup Inc. leading the decline. ``The equity market is concerned about interest rates,'' said John Davidson, president and chief executive officer of PartnerRe Asset Management Co., which manages $8.5 billion in Greenwich, Connecticut. If inflation keeps accelerating, the Fed ``may take actions that are more aggressive and this has helped pave the way for that.'' The Standard & Poor's 500 Index lost 12.07, or 1 percent, to 1171.71. The Dow Jones Industrial Average dropped 94.88, or 0.9 percent, to 10,470.51. Both closed at levels not seen since Jan. 28. The Nasdaq Composite Index declined 18.17, or 0.9 percent, to 1989.34, the lowest close since Nov. 2. Some 12 stocks retreated for every five that gained on the New York Stock Exchange. Some 1.68 billion shares changed hands on the Big Board, 11 percent more than the three-month daily average. Inflation Stocks rose earlier on a government report on wholesale prices and reversed course following the Fed's statement. In addition to noting increased pressure on inflation, the central bank said ``pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices.'' The Fed boosted its target rate for overnight bank loans by a quarter-point to 2.75 percent, matching the median estimate of economists in a Bloomberg News poll. Investors responded favorably to the Fed's six previous rate increases, pushing benchmark indexes higher on five of those occasions. The S&P 500 has climbed 3.1 percent in the nine months since the rate increases began. Still, benchmark indexes are down for the year, dragged lower by record oil prices and rising borrowing costs. The S&P 500 has fallen 3.3 percent in 2005, the Dow has retreated 2.9 percent and the Nasdaq has slumped 8.6 percent. ``Getting returns this year is going to be hard to come by,'' said Robert Doll, president and chief investment officer at Merrill Lynch Investment Managers, which oversees $501 billion in Plainsboro, New Jersey. ``This problem of higher oil prices and higher interest rates'' will cause stocks to ``muddle through'' the year. Oil Crude oil for May delivery fell 2.5 percent to $56.03 a barrel in New York. The record for a contract closest to expiration was $57.60 on March 17. The yield on the benchmark 4 percent Treasury note due February 2015 rose 10 basis points to 4.62 percent, near the highest since July, following the Fed's announcement. Earlier today, a Labor Department report showed wholesale prices rose 0.4 percent last month. The core rate, which excludes food and energy, increased 0.1 percent in February.