US stocks rise as Wall Street waits for Greenspan
Stocks chalked up modest gains today in unusually light trading before Federal Reserve Chairman Alan Greenspan’s congressional testimony.
Greenspan, scheduled to testify before House and Senate committees tomorrow and Thursday, is expected to give a bullish report on the US economy and reiterate that the Fed can exercise patience in raising interest rates - something Wall Street would like to hear after last month’s Fed statement that indicated rates would eventually rise.
In the meantime, without any economic or major earnings news before Greenspan’s statement, the market’s overall momentum kept stocks on the plus side.
“We’ve been in an uptrend, and the market is coming off of a couple weeks of correction that it needed,” said Stephen Sachs, director of trading at Rydex Investments. “There’s still money flowing into the market, and on a day like this, you’d assume that money is being put to work in index funds and other broad equities.”
The Dow Jones industrial average rose 34.82, or 0.3%, to finish at 10,613.85. Volume on the New York Stock Exchange totalled 1.39 billion shares, compared with 1.29 billion at the same point on Monday.
Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 5.37, or 0.5%, at 1,145.18, and the Nasdaq composite index climbed 14.76, or 0.7%, to 2,075.33.
Stocks have traded narrowly this week in light volume after last week’s erratic sessions, in which the Nasdaq lost 52 points one day and gained back 44 two days later, and the Dow rallied 97 on Friday.
The forthcoming holiday weekend and a lack of macroeconomic data also contributed to the small gains and light volume. The market historically has tended to be flat in February.
In earnings news, Viacom took a 1.3 billion charge as it announced it would shed its 81% stake in the Blockbuster video rental chain. With the charge, Viacom lost 23 cents per share for the quarter.
Viacom was up 96 cents at 41.35, while outstanding shares of Blockbuster dropped 21 cents to 16.20.
Marriott International slumped 89 cents to 44.67 despite reporting a profit of 69 cents per share, beating Wall Street estimates by 8 cents. The hotel chain said it expected stronger sales based on increasing business travel.
After posting a charge a year ago, Clorox’s profits rose 22% in the fourth quarter, but the company’s reduced outlook sent shares skidding 2.63 to 47.52.
Advancing issues outnumbered decliners by more than 8 to 5 the NYSE.
The Russell 2000 index of smaller companies was up 7.13, or 1.2%, at 592.62.
