Posted on: Wednesday, February 16, 2005
Stocks ascend ahead of Greenspan testimony
By Michael J. Martinez
Associated Press
NEW YORK — Investors cautiously bid stocks higher yesterday, pleased by growth in retail sales but wary about Federal Reserve Chairman Alan Greenspan's congressional testimony that starts today. The Dow Jones industrials and Standard & Poor's 500 index reached new 2005 highs.
Some investors, however, remained hesitant prior to Greenspan's take on the economy and monetary policy, coming today and tomorrow on Capital Hill. Although most on Wall Street expect Greenspan to reiterate the Fed's current stance, calling for measured interest rate hikes, some analysts believe the markets' recent gains may prompt Greenspan to sound a cautionary note.
"Greenspan has a history of using this meeting to try to curb the market," said Bill Groenveld, head trader for vFinance Investments. "I wouldn't be surprised if you end up seeing him making a statement that we weren't expecting. The way long-term rates are going, he may have to shake things up a bit."
Volume was somewhat light because of concerns over Greenspan's testimony, but some analysts took comfort in the fact that the major indexes did not give back their gains over the past two weeks.
Although the major indexes showed modest gains, merger news drove individual stocks.
Advancing issues outnumbered decliners by nearly 5 to 4 on the New York Stock Exchange, where consolidated volume came to 2 billion shares, compared with 1.68 billion Monday.
Wall Street welcomed the Commerce Department's report that overall retail sales fell 0.3 percent in January, less than the 0.5 percent economists expected. Taking sluggish auto sales out of the equation, retail sales rose 0.6 percent, also better than expected.
