Wall Street slips after Greenspan remarks
NEW YORK » Stocks wilted yesterday as comments from former Federal Reserve Chairman Alan Greenspan and worries about upcoming economic data deflated a rally fed by takeover activity.
Stocks initially rose, lifting the Dow Jones industrials briefly above 13,600 for the first time, after the market got a fresh load of deal-related news that included a possible bidding battle over aluminum producer Alcan Inc.
But the excitement waned after a media report that Greenspan expressed concern that China's stock market -- which has recently been hitting record highs -- could eventually see a sharp decline.
"He still carries a lot of clout," said Steven DeSanctis, small cap strategist with Prudential Equity Group, noting that U.S. investors are also very focused on the Chinese economy. "You get a data point like that and people start to take profits, get a little nervous."
Wall Street's mood also dampened when energy prices failed to ease despite a rebound in U.S. crude and gasoline inventories last week.
The Dow fell 14.30, or 0.11 percent, to 13,525.65, after climbing to an intraday trading record of 13,609.76.
Broader stock indicators also declined. The Standard & Poor's 500 index fell 1.84, or 0.12 percent, to 1,522.28, still unable to finish above its record close of 1,527.46 set in March 2000.
The Nasdaq composite index slipped 10.97, or 0.42 percent, to 2,577.05, after briefly trading above the 2,600 mark for the first time in more than six years.
Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.85 percent from 4.83 percent late Tuesday. The dollar declined, and gold rose.
The Russell 2000 index of smaller companies fell 3.38, or 0.40 percent, to 836.54.
Declining issues outnumbered advancers by about 10 to 7 on the New York Stock Exchange, where consolidated volume came to 3.02 billion shares, up from 2.82 billion Tuesday.
Giving stocks an early lift was news that Alcoa Inc.'s $27.6 billion hostile bid for rival Alcan was rebuffed, and a Canadian media report that Australian mining giant BHP Billiton Ltd. might make its own offer.
Alcoa rose $1.42, or 3.7 percent, to $40.37; Alcan rose $4.86, or 6 percent, to $85.89; and BHP Billiton rose $1.01, or 2 percent, to $51.76.
Adding to the takeover flurry, the Bancroft family, which controls Dow Jones & Co., planned to meet privately to discuss a $5 billion bid by Rupert Murdoch's News Corp., according to The Wall Street Journal, which is owned by Dow Jones. Dow Jones rose $1.28, or 2.5 percent, to $52.74.
Target Corp., the second-largest U.S. discount chain, rose 56 cents to $58.60 after reporting its first-quarter profit beat estimates due to strong sales of spring merchandise.
But many investors worry that high energy prices could eat into discretionary spending.
Crude futures rose 26 cents to $65.77 a barrel on the New York Mercantile Exchange, after a 1.5 million barrel gain in gasoline stockpiles last week did not convince traders that supplies will be sufficient ahead of the summer driving season.
Chinese stocks swelled to a record for the third-straight session yesterday on optimism over reports the government may triple quotas for foreign investment in local bourses.