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Wall St. snaps back
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February 12, 2001: 4:58 p.m. ET
With Greenspan speech ahead, investors turn optimistic
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - U.S. stocks rose Monday as investors, betting the economy will pick up later this year, snapped up stocks that sold off earlier this month.
The Dow Jones industrial average rose for the first time in five sessions while the Nasdaq composite index snapped a three-session losing streak. After giving up their gains for the year Friday, the major indexes are once again positive for 2001 -- if barely so.
The economy and corporate profits have slowed dramatically in recent months. But the Federal Reserve cut interest rates twice in January, sparking what could be an eventual about-face. Wall Street, always trying to predict the future, appeared to bet on a turnaround Monday.
"I'm looking for technology to bottom here," Richard Cripps, chief market analyst at Legg Mason, told CNNfn's Market Coverage.
 For months, Ned Riley, chief market strategist at State Street Global Advisors, was wary about technology stocks. But with valuations lower, he's warming up to these less-expensive shares. Consider Cisco Systems. The maker of Internet switches and routers last week fell to its lowest levels in more than 18 months.
"This is the greatest time to buy these stocks: when nobody wants them," Riley told CNNfn's Market Call.
The Dow Jones industrial average rose 165.32 points, or 1.53 percent, to 10,946.77, its first gain since Feb. 5.
The Nasdaq composite index rose 18.69 to 2,489.66, its first gain since Tuesday. And the Standard & Poor's 500 added 15.55, or 1.2 percent, to 1,330.31.
The market might find more direction Tuesday when Alan Greenspan, the Fed chairman, speaks before the Senate on the state of the economy.
More stocks rose than fell. Advancing issues on the New York Stock Exchange beat declining ones 1,946 to 1,145, on trading volume of 1 billion shares. Nasdaq winners topped losers 2,003 to 1,769, as more than 1.7 billion shares traded.
In other markets, Treasury securities fell. The dollar declined against the euro but held steady versus the yen.
Blue chips, techs rebound
Johnson & Johnson (JNJ: Research, Estimates) rose $3.09 to $98.07, Wal-Mart Stores (WMT: Research, Estimates) gained $3.05 to $53.45, and Citigroup (C: Research, Estimates) climbed $1.40 to $55.45.
Johnson & Johnson is down sharply this year while Wal-Mart and Citigroup are both off from their 52-week highs.
 Some tech stocks drew buyers. Cisco Systems (CSCO: Research, Estimates), which tumbled last week after missing Wall Street's fourth quarter profit target, rose $1.44 to $29.63. Sun Microsystems (SUNW: Research, Estimates) gained 94 cents to $25.50.
And Amazon.com (AMZN: Research, Estimates) rose $1.13 to $14.50. Both Merrill Lynch and Credit Suisse First Boston made positive comments about the online retailer's cash position. Lehman Brothers last week cast doubts on Amazon's financial health. The online retailer refuted Lehman.
Still, another batch of companies warned Thursday about earnings disappointments amid more analysts' downgrades.
Emulex (EMLX: Research, Estimates) tumbled $37.13 to $40.38 after the maker of data storage equipment said it could miss its fiscal third-quarter estimates. The last time Emulex plunged was in August, when a false report said the company would restate earnings.
EMC (EMC: Research, Estimates), the data storage leader, joined in the sell-off Monday, falling $2.25 to $54.15.
The day's action comes amid a tough time for corporate profits. For the final three months of 2000, Corporate America is on track to post its worst earnings in more than two years. And with the economy slowing, a record number of companies warned analysts about December quarter shortfalls.
Frank Cappiello, of McCullough, Andrews and Cappiello, told CNNfn's market coverage he sees a crisis of consumer and business confidence.
"Something has to be done and help is on the way in the form of the Fed, we hope," Cappiello said.
On Tuesday, Federal Reserve Chairman Alan Greenspan heads to Capitol Hill. Investors will be listening for any clues from the Fed chief on his assessment of the economy and outlook for interest rates.
 Anthony Chan, chief economist at Bank One Investment Advisors, found that Greenspan's semiannual testimony, formerly known as Humphrey-Hawkins, has coincided with stock market declines.
Of the 26 semiannual testimonies delivered by Greenspan in his tenure, the S&P 500 fell an average of 0.25 percent during the week of the appearance, Chan said.
The Fed made two large interest rate cuts in January, but it's not clear when these lower borrowing costs will turn the economy around. Chan says the market already is expecting another three-quarter percentage point cut in interest rates by the Fed through mid-year. Any indication that fewer cuts are coming could disappoint investors.
"Investors will be intently listening to see if he says anything that clears up what the future monetary path is likely to be," Chan said.
But Elizabeth Mackay, chief investment strategist at Bear Stearns, told CNNfn's Street Sweep that she expects Greenspan to keep alive the notion that more rate cuts lie ahead.
"I think there will be some relief after chairman Greenspan's speech," Mackey said.
Biotechnology stocks found some relief Monday amid a promising gene-mapping development. Scientists at Celera Genomics have released a detailed version of the human gene map. The plan, along with another from the Human Genome Project, opens the door to cures for some of the most bedeviling diseases, such as cancer.
Celera Genomics (CRA: Research, Estimates) rose $6.14 to $47.74. Amgen (AMGN: Research, Estimates) gained $1.69 to $74.25, while Immunex (IMNX: Research, Estimates) jumped $2.13 to $32.38.
With the day's gains, the Nasdaq is now up 0.7 percent this year while the Dow is 1.4 percent higher in 2001.
Charles Payne, head analyst at Wall Street Strategies, told CNNfn's Talking Stocks that he expects stocks to keep rebounding later this year. (210K WAV) (210K AIFF) 
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