NEW YORK - Federal Reserve Chairman Alan Greenspan shook financial markets today, fretting over the lofty prices of stocks and promising to "act promptly and forcefully" at the first hint of inflation dangers. In a volatile session on Wall Street, the Dow Jones industrial average fell 33.56 to close at 10,969.22.
Dow off 33.56Associated Press
The index plunged as Greenspan began his remarks and pitched forward and back for the rest of the session as Wall Street traders debated the impact of his testimony. At one point, the Dow dipped more than 100 points from yesterday's close.
The Standard & Poor's 500 index fell 18.32 to 1,360.97, and the Nasdaq composite index fell 77.33 to 2,684.44. Decliners beat advancers by a 12-to-7 margin on the New York Stock Exchange, with 1,805 down, 1,072 up and 618 unchanged. NYSE volume totaled 776.74 million shares vs. 787.75 million yesterday. The NYSE composite index fell 5.70 to 641.78; the American Stock Exchange composite lost 7.04 to 799.77; the Russell 2000 index fell 3.14 to 451.49.
The benchmark 30-year bond fell 3/4, or $7.50 per $1,000 face amount, to 90 1/8. It was up as much as 3/8 point before Greenspan's remarks. Bond yields rose 6 basis points to 5.96 percent. Yields on two-year notes climbed 7 basis points to 5.50 percent.
America Online fell after reporting late yesterday that its earnings nearly tripled in its fourth quarter. Amazon.com plunged after surprising Wall Street with the prospect of steeper losses in future quarters. The online retailer yesterday reported a second-quarter loss that matched analysts' estimates, and said it will spend heavily to expand its business.