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NEW YORK -- Skeptical investors sent stock prices falling today despite hints of future interest rate cuts and a retail sales report that suggested the economy isn't as weak as Wall Street has feared. Dow sinks 43
Associated Press
The market suffered a letdown after congressional testimony from Federal Reserve Chairman Alan Greenspan, who appeared to advocate a smaller interest rate reduction than investors want or have anticipated. Wall Street is worried that smaller cuts will take longer to reinvigorate the economy. "That's sort of disappointing the markets," said Hugh Johnson, chief investment officer for First Albany Corp.
The Dow Jones industrial average fell 43.45 to close at 10,903.32. The Nasdaq composite index dropped 61.93, or 2.5 percent, to 2,427.73, while the Standard and Poor's 500 index ended down 11.51 at 1,318.80. Advancers narrowly beat decliners 16 to 15 on the New York Stock Exchange, with 1,598 up, 1,468 down and 216 unchanged. Volume was 1.07 billion shares, compared with 1.01 billion yesterday. The NYSE composite slipped 3.27 to 657.72; the American Stock Exchange composite index fell 3.38 to 934.32; and the Russell 2000 index finished down 2.78 at 502.57.
The 10-year Treasury note's price was down point, or $1.25 cents per $1,000 in value; its yield rose to 5.06 percent from 5.04 percent yesterday. Prices and yields move in opposite directions. The 30-year bonds were up 1/32 point and yielded 5.41 percent, down from 5.42 percent yesterday.
The market saw Greenspan's testimony as a sign to sell and lock in recent profits. Investors had been expecting the Fed, which in January twice dropped rates a half point, to lower rates by another half point in March.
"Investors are just a little less convinced that we are going to get the (economic) recovery that he is forecasting," Johnson said.