Market Ends Higher Ahead of Greenspan Testimony
Blue chips posted solid gains and techs finished in positive territory ahead of Federal Reserve Chairman Alan Greenspan's testimony at Tuesday's Senate Banking Committee hearing.
Alfred Kugel, chief investment strategist at Stein Roe Farnham, told S&P's AdvisorInsight, that the markets are holding up as investors expect Greenspan to indicate the Fed will continue to cut rates when he testifies before the banking committee tomorrow. "We expect to get some good words from Mr. Greenspan tomorrow. (Investors) feel he will give a report that will be positive," Kugel said.
The testimony, which begins at 10 am ET Tuesday, is not the only reason for today's rebound, said Henry Asher, president of Northstar Group, a money management firm. "The other part is that we've had tremendous reaction to Cisco's announcement, which shouldn't have been a great surprise." Last week news that the networking giant had a lowered outlook for the year sent the market stumbling. Asher added that economic reports of late have either suggested a temporary downturn or a possible recession, making investors skittish and trading choppy. "That's why we're in the directionless stage that we're in."
The Dow posted triple-digit gains, closing up 162.00 points, or 1.50%, to 10,943.45. Among the Dow gainers were International Business Machines (IBM ), General Motors (GM ), Boeing (BA ), General Electric (GE ), and Wal-Mart Stores (WMT ).
On the Nasdaq, technology stocks were a mixed bag. But interest in biotechnology companies was high after media reports suggested Celera's (CRA ) gene map database was superior to the government funded Human Genome Project's version. Healthcare stocks, including pharmaceutical firms and HMOs, were strong across the board.
After a bumbling morning, the Nasdaq made a comeback, up 19.85 points, or 0.8%, to 2,490.82. Meanwhile, the S&P 500, a broader stocks gauge, finished up 15.00 points, or 1.1%, at 1,329.76.
Treasuries were trading lower. Pit sources report that "there's not much to report," other than a little options jockeying ahead of Greenspan's speech Tuesday. One commodities broker was a buyer of 2K 106 calls on March ten-year notes, but that was about it. Dealers expect to play the March bond from the offered side in front of Greenspan, but S&P MMS techies see a ray of hope down at 104-15/18 support before that event with a sustained break of 105-00 required for a retest of 105-15 February 2001 peak.
Stocks in the News
Oilfield services firm Schlumberger (SLB ) said it had agreed to buy Sema for $5.2 billion in cash, hoping the absorption of the troubled Anglo-French IT company will boost its technology credentials: Reuters
Shares of high-speed networking equipment maker Emulex Corp. (EMLX ) tumbled after the company said it may miss Wall Street forecasts if order deferrals continue to mount: Reuters
Potomac Electric Power Co. (POM ) said it agreed to acquire Conectiv Inc. (CIV ) for $2.2 billion in cash and stock, creating the largest electricity delivery company in the U.S. mid-Atlantic region.
European markets finished higher. The London Financial Times-Stock Exchange 100 index finished higher by 77.10 points, or 1.25%, at 6,238.50. In Germany, the DAX Index ended higher by 67.84 points, or 1.04%, at 6,564.91. Meanwhile, France's CAC 40 ended up 47.12 points, or 0.82%, at 5,759.48.
In Asia, the markets finished mixed. Japan's Nikkei 225 Index was closed Monday. Hong Kong's Hang Seng index, meanwhile, ended down 180.17 points at 15,693.11.
Free music downloads via Napster Inc. may be a thing of the past as a court is in the midst of deciding whether it can continue running. Tens of thousands of music fans flooded the company's computer servers to download free tunes for fear they may not remain free for long. Song whizzed from hard drive to hard drive as the battle over copyright ownership found itself once again hinging on a court ruling, this one due Monday from the 9th U.S. Circuit Court of Appeals: the Associated Press
The first in-depth look at the human genetic code has revealed much less than anticipated -- about half to a third the number of expected genes, scientists will announce on Monday: Reuters
Americans' credit-worthiness will likely worsen in the coming months as more workers may lose their jobs and companies shrink payrolls in response to a weakening economy, analysts said: Reuters