Nasdaq hits record;
Dow jumps 107

The tech-heavy index soars 91
to lead a broad advance after
Greenspan calms inflation fears

NEW YORK -- The Nasdaq composite index soared to a record close today, leading a broad stock market rally that was extended on Federal Reserve Chairman Alan Greenspan's suggestion that the Fed's two interest rate hikes this year seem to be keeping inflation under control.

The remarks raised hopes that the central bank may not see the need for repeated additional rate hikes to keep the economy from overheating. Interest rates tumbled today on the inflation-sensitive government bond market.

The Dow Jones industrial average was up 107.33, or 1 percent, at 10,729.86, adding to its 227.64-point surge yesterday. The Dow ended the week up about 2.5 percent.

Intel Corp. led computer stocks higher and the Nasdaq composite index as it closed up 91.21 points at 2,966.43, well above the previous record of 2,915.95 on Oct. 11. Intel late yesterday reassured investors it will be able to fill all customers' orders for chips.

The Standard & Poor's 500 rose 20.49 to 1,362.93 to complete its biggest two-week gain since December 1987.

Advancing issues outnumbered decliners by an 11-to-5 margin on the New York Stock Exchange, with 2,166 up, 973 down and 401 unchanged. NYSE volume totaled 1.095 billion shares, vs. 1.12 billion yesterday.

The NYSE composite rose 7.32 to 625.47; the American Stock Exchange composite gained 7.25 to 800.80; and the Russell 2000 index of smaller companies rose 5.83 to 428.64.

The 30-year bond rose 1 6/32, or $11.871/2 per $1,000 face amount; its yield, which moves in an opposite direction from the price, shed 9 basis points to 6.16 percent. Two-year yields also fell 9 basis points to 5.78 percent.

Today's rally on Wall Street came on the 70th anniversary of the 1929 stock market crash, when the Dow plunged 11.73 percent in a single session.

Greenspan, in a speech at a Florida meeting of business executives late yesterday, said a significant upturn in the growth of productivity in recent years has boosted the U.S. economy and kept inflationary pressures under control. He suggested that the Fed's two interest rate hikes this summer are keeping the economy on a path of noninflationary growth.

"This process of containment may already be significantly advanced," Greenspan said in citing the impact higher market interest rates could be having.

In recent weeks, the market has been dominated by a debate over whether the Fed will raise interest rates for the third time this year when its policy-makers meet on Nov. 16. Some traders had worried about prospects for more increases down the road.

Greenspan didn't say what the Fed will do. He also warned that the central bank will be particularly alert in the coming months to any signs of slowing productivity -- the amount of output per hour of work.

In addition, Greenspan suggested that he needs to see more evidence the economy is slowing in order to keep the central bank from raising interest rates again.

America Online Inc. rose $2.871/2 to $129.371/2. The largest Internet service company plans to split its stock 2-for-1, its second split this year and fourth in two years. America Online, with a market value of $143 billion, is one of the best-performing stocks in the Internet industry. Its shares have soared almost 10-fold in two years and have quadrupled in 1999.

Ricky Harrington, technical analyst at Wachovia Securities in Charlotte, N.C., noted that the technology sector completely dominated today's rally.

"The market does look impressive," he said. "But it has to find some other leadership beyond the techs and the financial stocks. When they're the only two groups driving the market, it doesn't signify a lot of strength."