RealTime IT News

Greenspan Fails To Bolster Market

The Dow Jones' current dismal stretch turned darker Tuesday as blue chips never got above water, finishing down 166 points to 8473. It marked the seventh consecutive drop for the Dow, the longest losing streak for the industrials index in 18 years.

Despite optimistic words about the economy Tuesday morning from Federal Reserve chief Alan Greenspan, all major indexes lost ground. The Nasdaq gave back most of Monday's slight gain, falling 7 points to 1375 after spending most of the day in the black. The S&P 500 never climbed out of an early hole, winding up the day with a loss of 17 points to 901. However, the Internet Stock Index, or ISDEX, retained enough of investors' earlier support of tech stocks to wring out a 1-point gain to 106.

In his address to Congress, Greenspan said the economy is poised for recovery, but will experience lingering effects from the recession and corporate accounting scandals that have ravaged investor confidence. He increased growth estimates for the year to 3.5%-3.75% from the 2.5%-3% range predicted five months ago.

Greenspan said he was wrong to believe the market could police itself and said it was important for the government and the private sector to uncover and punish corporate misdeeds in order to restore investor trust.

Also Tuesday, the House passed a bill calling for tougher criminal penalties for corporate fraud. The Senate passed a similar bill on Monday.

The last time the Dow Jones fell for seven straight days was June 1984.

Shortly after the market closed, leading chipmaker Intel reported Q2 net income of $446 million, or 9 cents per share excluding one-time charges, short of the 11 cents per share profit forecast by analysts. Intel finished regular trading Tuesday with a 4% loss to $18.36.

Computer maker Apple also reported earnings after the bell, showing a Q3 net gain of 9 cents per share, in line with lowered expectations but nearly 50% off from the 17 cents per share from the year-ago quarter. Apple dropped 2% to $17.86 in Tuesday's regular-hours trading.

The day's biggest gainer was wireless player Nextel Communications , which gained 31% to $6.53 after reporting its first-ever quarterly net profit.