Stocks closed mixed on Wednesday after
investors cashed in profits from a big rally that was built on
blow-out earnings from software giant Microsoft Corp. and upbeat
comments about the economy from Federal Reserve Chairman Alan
The Dow Jones industrial average was off 19.31 points at
9,335.91 following a gain of nearly 125 points.
In the broader market, declining issues led advances 1,557
to 1,459 on active volume of 899 million shares on the New York
The NASDAQ composite index edged up 7.32 points to 2,415.49,
its second record high in a row.
Greenspan was positive but cautious about the economy,
telling the House Ways and Means Committee that turmoil abroad
and falling exports still posed a risk to the "sparkling" U.S.
"The take on [Greenspan's] comments is that the Fed is on
hold, which is probably consensus at this point," said Jeffrey
Applegate, chief investment strategist at Lehman Brothers.
"As long as the Fed is at worst on the sidelines, and
inflation is not accelerating and earnings are going up, then
all things being equal, the stock market ought to go up," he
In addition to giving a positive but cautious view of the
economy, Greenspan said he continues to oppose investing
government money for Social Security in the stock market,
dealing a setback to President Clinton's plan to overhaul the
retirement system, unveiled in his State of the Union address
Warning that government money in private equity funds would
create a risk of political interference in corporate decision
making, Greenspan said: "We will lower the capital efficiency
of this country. We will lower the thrust of productivity growth
and standards of living."
Microsoft stock rose 6 7/8 to 162 1/2 after it reported a 75
percent jump in quarterly earnings.
Dick Stein, chief technical analyst for Noble International
Investments in Boca Raton, Fla., said the wave of good earnings
could fade in coming weeks.
"The ones that come out early are the ones that have
something to brag about," he said. "Enjoy what you can of
January. It's probably going to be the best month of the first
Investors also took heart from chip maker Texas Instruments
Inc., which jumped 6 5/8 to 99 5/8 after it came in with
The results came on the heels of positive earnings this week
by other major companies, including the brokerage houses Merrill
Lynch & Co. Inc., which gained 2 11/16 to 74 and Charles Schwab
Corp., up 3 5/8 at 64 3/8.
Philip Morris Cos. Inc., the maker of top-selling Marlboro
cigarettes, fell 2 6/16 to 48 7/16.
Tobacco stocks were hit after Clinton announced in his State
of the Union address that the Justice Department was preparing
to sue Big Tobacco for billions of dollars in damages related to
health care spending.
Teradyne Inc. rose 8 13/16 to 62 1/16. The automated test
equipment maker said its 1998 earnings beat Wall Street
Western Digital Corp. fell 4 5/16 to 16 after the maker of
hard drives posted a quarterly loss and said it would lay off
5.8 percent of its workforce.
American Bank Note Holographics Inc. plummeted 10 11/16 to
4 7/16. The company was named in a stockholder suit alleging
that it made false and misleading statements about its financial
The Standard & Poor's composite index of 500 stocks rose
4.62 points to 1,256.02. The American Stock Exchange index was
up 4.76 at 712.37.
The NYSE Composite index of all listed common stocks rose
1.26 to 596.09. The average share was up 9 cents.
The Wilshire Associates Equity Index the market value of
NYSE, American and NASDAQ issues was 11,564.262, up 36.790,
or 0.32 percent.