Heard on the Street: In the Dog Days of Summer, Stock Traders Ponder Rumor That U.S. Props Up Market
NEW YORK -- Would the Bush administration try to prop up the stock market?</br></br>It sounds preposterous, but Wall Street has been chewing over that very question with great gusto in recent days. Yesterday, both the Treasury Department and the Federal Reserve Board issued strong denials.</br></br>That such a rumor would preoccupy the Street as much as it does probably says more about the mentality of Wall Street in August than it does about any behavior in Washington. Stock traders are on tenterhooks, increasingly fearful that this year's disappointing meandering of stock prices could turn into a rout. And the meager trading volume of August leaves plenty of time for traders to swap stories about the Machiavellian forces they seem to imagine are behind every pillar.</br></br>Earlier this week, three published or broadcast items helped fan a rumor that the Treasury (or, in some versions, the Fed) has been buying stock-index futures in Chicago to buoy the stock market at times of market stress.</br></br>A Treasury spokeswoman said yesterday, "These are simply rumors and they are totally without foundation."