Stock, Bond Prices Advance Broadly As Interest Rate Cut Hopes Revive
Stocks advanced broadly today, breaking a four-day losing streak, as comments by Federal Reserve Chairman Alan Greenspan encouraged a decline in open-market interest rates.</br></br>The Dow Jones industrial average gained 57.44 points, to 5515.97. Twice during the session, the blue-chip average was up more than 50 points, prompting the New York Stock Exchange to temporarily restrict computer-driven buy programs in an attempt to keep markets orderly.</br></br>Stocks rose, along with bond prices, after Greenspan told the Senate Banking Committee that the economy has hit a "soft patch" but should grow moderately over the long term. Greenspan had made similar remarks to a House committee Tuesday, but the market took those comments to mean the Fed was less likely to lower short-term interest rates soon, and bond and stock prices fell sharply as a result.</br></br>"Greenspan's comments today were much more conciliatory toward those who are foreseeing a rate cut," said Michael LaTronica, market analyst at Gruntal Securities. "He left the door open on a rate cut in March."</br></br>The price of the benchmark 30-year Treasury bond rose 7/16 point, or $4.38 per $1,000 in face value, while its yield fell to 6.37 percent from 6.40 percent. The bond's price was off its best levels of the day near the close of stock market trading.