Stocks fell today after Federal Reserve Chairman Alan Greenspan voiced concern over the highly valued stock market, remarks some investors took as an indication the Fed isn't finished raising interest rates.
At the end of the quietest trading day of 1999, the Dow Jones industrial average was down 108.28, at 11,090.17. The Dow ended just 10 points below last Friday's close, wrapping up a week in which the blue-chip indicator soared to record highs on Wednesday.
Broader stock indicators also fell. The Standard & Poor's 500-stock average fell 13.74, to 1348.27, and the Nasdaq composite index fell 15.72, to 2758.90.
Greenspan, speaking at a Federal Reserve bank meeting in Jackson Hole, Wyo., said the extraordinary rise in stock prices during the past five years has been mostly inexplicable. He suggested the Fed should watch markets carefully, as Americans are using their growing stock portfolios to justify spending and other financial decisions.
He did not discuss the Fed's Tuesday decision to raise short-term interest rates 0.25 percentage points. The rate announcement heartened many investors, who thought it contained a hint that the Fed may not raise rates again this year.
Today's speech, however, unsettled some investors, who recalled Greenspan's previous expression of concern about the stock market. In December 1996, he caused a sharp, brief sell-off in markets around the world by wondering whether investors were displaying "irrational exuberance."
Volume on the New York Stock Exchange came to just 570 million shares, down sharply from 719 million on Thursday.
The Dow's biggest decliners included AT&T, down 2-7/16, at 47 1/2; American Express, down 2-9/16, at 144 5/8; and Johnson & Johnson, off 2 1/4, at 102-3/16.
Hewlett Packard defied the weakness in blue-chips, rising 2, to 104 5/8.
Intuit, a leading maker of personal finance software, rose 8-3/16, to 91-1/16, after the company said it narrowed its losses in the recent quarter to 26 cents a share. Analysts surveyed by First Call/Thomson Financial had predicted a loss of 33 cents per share.