Stocks Drop on Greenspan China Comments

Was it something he said?

After riding high for the better part of Wednesday’s trading session, all three major U.S. indices plummeted into the red after 2 p.m. following former Fed Chairman Alan Greenspan bearish comments about the Chinese stock market.

And while the Dow Jones and S&P 500 got off the canvas briefly before the final bell, neither could sustain their recovery. The Dow ended down 14 points, or 0.1 percent, to 13526, while the S&P dipped 2 points (also 0.1 percent) to 1522.

The Nasdaq, meanwhile, was counted out by the ref. The tech-heavy index remained in the red for the final 90 minutes of trading, finishing the day at its low point of 2577, a drop of 11 points, or 0.4 percent.

Greenspan made his comments about Chinese stocks – whose main index has nearly doubled already this year – via satellite to a conference in Madrid. According to Bloomberg, the retired Fed head said such growth “is clearly unsustainable. There is going to be a dramatic contraction at some point.''

Among U.S. tech stocks, chip maker Analog Devices Inc. sustained one of the biggest losses Wednesday as shares plunged $4.03, or 10 percent, to $36.39 after the company reported a 14 percent drop in profit and warned that earnings for the current quarter would fall short of street forecasts.

Rival Intel may have been partially affected by Analog’s bad news as shares fell 32 cents, or 1.4 percent, to $22.67.

Microsoft slipped 11 cents, or 0.4 percent, to $30.58 despite its chief advertising strategist’s boast at Goldman Sach’s annual Internet conference that the software maker has “all of the pieces” it needs to become a top competitor in online advertising. Microsoft last week agreed to buy online ad company aQuantive Inc. for $6 billion.

IBM lost $1.12, or 1.1 percent, to $105.58 even as analyst firm Gartner reported that Big Blue remains No. 1 in global server revenue share. IBM had 30 percent of the worldwide server market in Q1.

Search engine giant Google declined $1.89, or a mere 0.4 percent, to $473.97, putting an end to two days of gains.