The Dow Jones industrial average fell 80.60 points, or 0.78%, to 10,220.78. The Nasdaq Composite index was down 5.93 points, or 0.33%, to 1,810.86. And the broader Standard & Poor's 500 index, meanwhile, lost 2.28 points, or 0.2%, to 1,126.09.
In his testimony to the Joint Economic Committee Wednesday morning, Greenspan suggested the Fed can go slowly in hiking interest rates, and that inflation remains low despite higher energy prices. He said that while there is little doubt prospects have brightened, the strength of the recovery is still uncertain. Many market watchers expect the Fed to hold off on raising rates until late summer.
Investors also had plenty of earnings news to ponder. After the closing bell Tuesday, Intel (INTC
) reported earnings of $0.15 a share, meeting analysts' estimate. Revenue rose 3% to $6.78 billion. The chipmaker sees second quarter revenue ranging between $6.4 billion and $7 billion. Semiconductor stocks rallied on the news.
Putting weight on the Dow was component Boeing (BA
), which fell after reporting first quarter EPS (adjusted) of $0.75, a dime lower than analysts predicted.
Drug stocks were also depressed after Pfizer (PFE
) said it expects earnings growth to be less than anticipated for the second quarter
On the plus side, Ford (F
) posted upbeat results, following in General Motors' (GM
) footsteps. Ford reported a narrower than expected first quarter operating loss of $0.06 per share, vs. $0.60 EPS a year ago, on a 6.1% drop in revenues. The automaker says it is on schedule to meet or surpass its 2002 EPS milestone.
JP Morgan Chase (JPM
) reported first quarter operating EPS of $0.57, vs. $0.74 a year ago, on 15% lower operating revenue.
And in the telecommuniations sector, Motorola (MOT
) and Nextel Communications (NXTL
) rallied after reporting results.
But within tech, computer storage stocks were notably lower as EMC (EMC
) fell on negative comments from a JP Morgan analyst, who believes the company's first quarter revenues could come in below expectations. Software stocks were also lower after Veritas Software (VRTS
) reported results and warned that second quarter sales and earnings may come in below analysts' forecasts on weak IT spending.
Among big-name techs, the earnings highlights after the market close are IBM (IBM
) and Apple Computer (AAPL
On Thursday, earnings will continue to be the focus, with American Express (AXP
), McDonald's (MCD
), Merck (MRK
), Northwest Airlines (NWAC
), Sears (S
), SBC Communications (SBC
) scheduled to report results.
In the tech sector, Microsoft (MSFT
), Sun Microsystems (SUNW
), Compaq (CPQ
), KLA-Tencor (KLAC
), Nokia (NOK
), and Nortel (NT
) are expected to post earnings.
Key economic reports Thursday include weekly initial claims for unemployment benefits, leading economic indicators and the Philadelphia Federal Reserve index.
U.S. Treasuries finished lower, sending yields higher, following Greenspan's indication that the Fed is in no hurry to tighten interest rates.
In economic news, the U.S. trade deficit widened 11.6% to $31.5 billion in February, from a revised $28.2 billion deficit in February (previously $28.5 billion). Imports surged 4.0%, while exports rebounded 1.2%, consistent with the improvement in the economy. Oil imports fell 8%. The data won't have much impact on Treasuries, says S&P MMS.
European stock markets were mixed. In London, the Financial Times-Stock Exchange 100 index closed with a gain of 4 points, or 0.08%, to 5,263.90, as U.K. March payrolls fell 6,000 while the unemployment rate remained at a 26-year low of 3.1%.
In France, the CAC 40 lost 1.44 points, or 0.03%, to 4,597.30. And in Germany, the DAX Index fell 25.33 points, or 0.47%, to
In Asia, the markets ended higher. Japan's Nikkei gained 197.05 points, or 1.74%, to close at 11,543.71, led by exporter shares on the back of renewed hopes for earnings and economic recovery in the U.S. following better-than-expected financial results and outlooks from Intel and General Motors. In Hong Kong, the Hang Seng surged 302.05 points, or 2.80%, to close at 11,090.58.