Markets Nervously Await Greenspan Remarks

The Dow Jones industrial average struggled higher Monday, but stocks were mostly lower in nervous trading before today’s congressional testimony by Federal Reserve Chairman Alan Greenspan.

The Dow slid more than 50 points in early trading, but pulled higher toward the close, rising 16.26 to 7,906.72. The blue-chip barometer had shed 150 points over the previous two sessions after hitting 8,000 for the first time on Wednesday.

Broader stock indicators slumped for the third consecutive session, with the Nasdaq composite index suffering the worst losses as investors locked in some more gains from the high-flying technology sector.

Few observers expected the market to see any decisive activity on Monday with Greenspan due to deliver a semiannual report on the economy to Congress today.

Inflationary trends have remained fairly tame since Fed officials last met earlier this month, so there’s been little worry that the central bank will try to slow the economy with higher interest rates at next month’s strategy session. But mindful that stocks are trading near record levels, few investors can forget that Greenspan touched off a steep selloff in December after he raised fears that the Fed might boost rates to temper the inflationary impact of “irrational exuberance” in the markets.

Some of the stocks that moved substantially or traded heavily Monday:

NYSE

AT&T, down 1/8 at 34-1/4.

The telecommunications giant’s second-quarter profit dropped 38 percent, weakened by the cost of breaking into local phone markets and slow growth in its core long-distance business.

Boeing, down 1-11/16 at 54-3/8.

The company’s second-quarter profits dropped 15 percent, falling shy of analysts’ forecasts.

First Union, down 3 at 94 7/16.

Signet Banking, up 13-1/2 at 50-3/16.

First Union agreed to buy Signet for about $3.25 billion in stock. Each Signet share is to be traded for 0.55 share of First Union stock. First Union is the nation’s sixth biggest banking company.

NASDAQ

3DFX Interactive, down 4-1/8 at 12.

A trade magazine reported that the chipmaker lost a supply contract with videogame maker Sega Enterprises. 3DFX, which went public only 25 days ago, has said the report is in error, Elias Moosa, an analyst at Robertson Stephens, told the Dow Jones News Service.

AMEX

Forest Laboratories, down 1-9/16 at 45-3/8.

The launch of Forest’s Infasurf product will be delayed because the Food and Drug Administration postponed the product’s marketing approval and suggested the company conduct more studies. Infasurf is used to treat respiratory distress syndrome in premature infants.