Dow up 32.91
on Fed chief’s talk

NEW YORK -- Stocks rose modestly today after see-sawing amid alternating interpretations of Alan Greenspan's remarks on inflation and interest rate policy.

The Dow Jones industrial average gained 32.91 points to close at 7,169.53, having recovered from a 42-point deficit which came after surrendering an early 60-point gain. The blue-chip barometer ended the week with a gain of nearly 100 points, but below Tuesday's record close of 7,225.32.

Advancers beat decliners by an 8-to-5 margin on the New York Stock Exchange, with 1,546 up, 965 down and 845 unchanged. NYSE volume totaled 455.62 million shares vs. 534.12 million yesterday.

Broader stock indicators also posted modest gains. The Standard & Poor's 500 list rose 4.50 to close at 824.76, and the NYSE index climbed 2.33 at 429.23. The Nasdaq index was up 4.18 at 1,335.01, and the American Stock Exchange composite rose 2.83 at 573.78.

Stocks opened higher with bonds amid speculation that Greenspan, the chairman of the Federal Reserve, had hinted the central bank won't need to raise interest rates aggressively to protect against inflation.

After the initial enthusiasm over Greenspan's remarks wore off, bond prices fell, spurring some profit-taking in stocks as the yield on 30-year Treasury bonds rose back toward 7 percent. The long-bond yield -- another key determinant of borrowing costs -- fell below that key level last week, fueling a sharp stock rally. Today, it rose as high as 6.94 percent before retreating to 6.89 percent as bonds recovered in the afternoon.

Greenspan, in a speech in New York late yesterday, was not explicit about what Fed policymakers would do when they next meet on May 20. But many investors took his remarks to mean that at most, the Fed would raise rates this month and then move to the sidelines.

In late March, the Fed raised one of its key lending rates for the first time in two years, hoping to ease inflationary pressures by slowing the pace of borrowing and spending. The markets fell sharply after that move, however, with investors fearing the Fed would raise rates repeatedly, muzzling the economy and corporate profits.

"There's been a lot of black and white interpretations of Greenspan's speech, but one thing most think is that we do not face more than one more rate hike this year," said Alfred E. Goldman, vice president at A.G. Edwards & Sons of St. Louis.