Stocks Sink on Greenspan Comments

Federal Reserve head Alan Greenspan’s comments about the massive U.S.
current-account deficit caused the ailing dollar to slide further and stocks
to fall in Friday’s trading.

The Dow Jones finished the day at 10457, a drop of 116 points, or 1.1
percent. The tech-heavy Nasdaq fell 34 points, or 1.6 percent, to 2071,
while the S&P 500 tumbled 13 points, or 1.1 percent, to 1170.

In remarks prepared for a German conference on the euro, Greenspan said it
was inevitable that foreign investors will have a “diminished appetite for
adding to dollar balances.” The U.S. current account deficit reached $166.2
billion in the second quarter.

A spike in oil prices also made investors jittery.

Meanwhile, the success of database vendor Oracle’s
hostile bid for software maker PeopleSoft appeared more
likely as the midnight Friday deadline approached for shareholders to vote
on the $9.2 billion offer. Insider estimates put the number of PeopleSoft
shares supporting the Oracle bid at 37 percent, with about 19 percent
expected to reject the $24 per share deal. If accurate, the vast majority of
the remaining 45 percent of shares would have to vote against the takeover
to halt it.

In their last trading session before the deadline, Oracle’s stock dipped 22
cents, or 1.7 percent, to 12.75, while PeopleSoft shares climbed 25 cents,
or 1.1 percent, to 23.17.

Networking software and services vendor Novell fell 54
cents, or 7.6 percent, to 6.59, despite reporting fourth-quarter earnings
that beat analysts’ estimates. Novell’s Q4 revenues of $301 million were 4.9
percent above the $287 million revenue from last year’s fourth quarter.

Digital design and content player Autodesk soared 3.05,
or 5.0 percent, to 63.70 after reporting strong Q3 results and announcing a
2-for-1 stock split. Autodesk’s third-quarter net revenues totaled $300
million, a 28 percent increase over the $234 million generated in the
year-ago quarter.