Tracy Eichler at Paine Webber. Financial stocks were among the biggest winners today, as investors figured lower interest rates will benefit banks and brokerages. JP Morgan jumped 9 and a half percent. Citigroup was up 6 percent. Of course, Greenspan would never actually say that the Fed intends to cut rates, and some economists aren't convinced it'll happen.
Consumers are more thrifty.
Corporate profits are falling. New statistics today showed that factory orders are weaker than expected. The Fed chairman said today that he's watching the same trends. However, Greenspan tried to put a damper on that kind of speculation. Tensions in the Middle East risk spreading inflationary energy prices throughout the economy, he noted, limiting the Fed's leeway to stimulate growth.