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Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: mike machi who wrote (7992)	5/6/1999 7:07:00 PM
From: Jenne	Respond to of 19700

Stocks Trade Lower As Treasury Bonds Continue to Slump By AARON ELSTEIN INTERACTIVE JOURNAL Stocks fell and bonds slumped Thursday as Federal Reserve Chairman Alan Greenspan said tight labor markets still pose an inflationary risk. The dollar was mixed against the euro and yen. The Dow Jones Industrial Average closed down 8.59 points to 10946.82, but that was far better than earlier in the day, when the industrial average fell as much as 103 points. American Express, down over 3 in the final hour, rallied strongly to close the day up 1 5/8 to 131 on an otherwise poor day for financial stocks. "More buying on the dips," said Warren Epstein, director of trading at Richard A. Rosenblatt Co. The market's fall started right after the opening bell, when Mr. Greenspan told a Chicago audience that the declining unemployment rate poses an "upside risk" to inflation. Coming a day before April's widely anticipated unemployment report, Mr. Greenspan's comments that continued low unemployment may signal inflationary pressures unnerved investors. The broader markets were also weaker Thursday, with the Standard & Poor's 500-stock index down 15.23 to 1332.08 and the New York Stock Exchange Composite Index falling 4.32 to 636.22. Technology stocks, which provided the fuel for Wednesday afternoon's rally, were hit hard Thursday, pulling the Nasdaq Composite Index down 62.17, or 2.4%, to 2472.28. America Online fell 10 to 119 3/4. On the international front, Mr. Greenspan said that the worst of the financial crisis that shook economies all over the world appears to be over, and there are signs of recovery in southeast Asia. Weakness in the region had helped to keep U.S. inflation under control as it damped demand for American goods and flooded U.S. shores with low-priced goods. A sell-off in Treasurys after Mr. Greenspan's remarks pushed the yield of the benchmark 30-year Treasury bond to 5.80%, its highest level since July. Bond yields move inversely to their price. Analysts said that while little in Mr. Greenspan's speech was unexpected, his reminder that tight labor markets could disrupt the inflation-free economic growth gave investors all the reason they needed to pocket profits in stocks. "Basically, he said that labor markets can get so tight they push up wages, inflation rises, and that upsets productivity growth. That's something he's never quite said before," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. "I think he gave a very clear signal on what indicators he'll be watching in the coming months." Mr. Shepherdson said he expects the Fed will leave interest rates alone in the near term. Aside from American Express, most financial stocks fell Thursday, as is often the case when interest rates rise. Dow components Citigroup fell 2 3/4 to 70 and J.P. Morgan dropped 3 11/16 to 135 3/16. The Keefe, Bruyette & Woods Bank Index dropped 2.2%. Retailers also were hurt as many reported smaller-than-expected sales gains. Wal-Mart Stores fell 2 3/16 to 42 7/8 after the company reported sales growth of 4.6% in April. But cyclical stocks, those of companies whose fortunes rise and fall with the economy, posted strong gains. Alcoa rose 3 9/16 to 63 3/4. And pharmaceutical stocks rallied late, with Johnson & Johnson, rallying in the final hour to reverse an early loss and close up 3 5/8 to 97 5/8. Shares of Microsoft, up at one point by as much as 1 3/8 on news that it had agreed to invest $5 billion in AT&T, caught got in the tech selling wave to slip 1 3/16 to 77 15/16. AT&T shares rose 1 15/16 to 58 7/8. In major market action: Stocks fell. Volume reached 875.4 million shares on the New York Stock Exchange, where 1,480 declined and 1,473 advanced. Bonds fell. The Treasury's benchmark long bond fell more than 1 point, or $10 per $1,000 bond. Its yield, which moves in the opposite direction of the price, stood at 5.79%. The dollar weakened. It was quoted at 120.59 yen and $1.0780 to the euro, compared with 120.65 yen and $1.0758 to the euro late Wednesday in New York. Tapewatch Update Initial jobless claims for the week to May 1 rose by a greater-than-expected 6,000 to 301,000 in the U.S. Economists had expected 295,000 new applications for unemployment benefits.