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Wall Street Sees Narrowly Mixed Trading Amid Soothing Comments from Fed Chairman Greenspan

Strategic Insights

— 1 min read

Wall Street saw a narrowly mixed trading day early Wednesday, with the Dow Jones industrial average fluctuating as investors digested the remarks of Federal Reserve Chairman Alan Greenspan. Despite initial concerns about inflation after the Fed raised short-term interest rates on February 4, Greenspan's congressional testimony helped to alleviate fears of further credit tightening. As a result, stocks and bonds rebounded, and analysts remain cautious, suggesting that the market needs to consolidate for several more weeks.

Key Takeaways:

  • The Dow Jones industrial average dropped 8.72 points to 3902.94 at 11 a.m. EST, while the New York Stock Exchange composite index edged up 0.16 to 261.64.
  • Advances edged declines 889-777 among the 2,439 issues crossing the NYSE tape, with volume reaching about 88,680,000 shares.
  • Treasury securities eased, while the U.S. dollar turned mixed, trading at 1.7275 German marks and 105.40 Japanese yen.
  • Analysts attribute Tuesday's rebound to technical considerations and Greenspan's soothing comments, but still predict a need for market consolidation.
  • Stocks tumbled in the final week of February primarily due to bond prices' weakness after the Fed raised short-term interest rates on February 4.
  • Investors had become skittish since the Fed's interest rate hike, which had not occurred in nearly five years.

Statistics:

  • Dow Jones industrial average: down 8.72 points to 3902.94 at 11 a.m. EST
  • New York Stock Exchange composite index: up 0.16 to 261.64
  • Advances vs. declines: 889-777 among 2,439 issues
  • Volume: approximately 88,680,000 shares
  • Treasury securities yield on 30-year bond: 6.60%
  • U.S. dollar exchange rate: 1.7275 German marks, 105.40 Japanese yen

Sources:

  • "Wall Street Turned Narrowly Mixed in Quiet Trading Early Wednesday" - article (date not specified)
  • "Ralph Bloch, senior vice president and chief market analyst at Raymond James & Associates" - quote by Bloch
  • "Federal Reserve Chairman Alan Greenspan" - testimony before Congress (date not specified)

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