NEW YORK (CNN/Money) - Wall Street wilted Friday, closing out an overall down week with a five-out-of five session decline on the Dow Jones industrial average after Federal Reserve Chairman Alan Greenspan painted a mixed picture in his first speech on the economy in three months.
The Fed chief cited continuing near-term risks and joblessness within the larger view of long-term economic recovery, all the while leaving the door open for future short-term interest rate cuts.
"There are sound reasons for concluding that the long-run picture remains bright ... but I would emphasize that we continue to face significant risks in the near term," Greenspan told a delegation of local business leaders in San Francisco, in his first speech on the state of the economy since addressing Congress following the events of Sept. 11.
The Dow Jones industrial average closed the week down 272.31 points, or 2.65 percent, at 9,987.53, erasing all of its gains so far in 2002. The Nasdaq composite lost 36.91 points this week, or 1.8 percent, to stand at 2,022.46. The Standard & Poor's 500 gave back 26.91, or 2.3 percent, to end the week at 1,145.60.
"I didn't see a whole lot of conviction from him (Greenspan) and I don't think the market did either," Mike Murphy, head of equity trading, Wachovia Securities told CNNfn's Street Sweep.
Whether the speech implies a continued cutting of short-term interest rates remains up in the air for the time being.
James Glassman, chief U.S. economist at J.P. Morgan, told CNNfn that he saw the speech as indicating there will be one more cut in the overnight bank lending rate before the Federal Reserve is finished.
But Ian Shepherdson, chief economist at High Frequency Economics, wrote in a note that the speech implied interest rate cuts may be over for the time being.
"There is no clear steer on policy in this speech; analysts with different views will read it in different ways. But we think the Fed chairman knows recovery is here; he just wants to be a bit cautious -- and in both directions, which means no more easing," Shepherdson wrote.
In Asia, stocks closed lower Friday, with Tokyo's Nikkei index posting its fourth straight session of declines. European bourses closed higher.
Treasury prices rose sharply after the Greenspan speech, with the 10-year note yield falling to 4.87 percent by the close. The dollar was mostly flat against the euro and the yen. Light crude oil futures fell 26 cents to $20.12 a barrel in New York.
Market breadth was negative. On the New York Stock Exchange, decliners beat advancers 3-to-2 as 1.19 billion shares traded. On the Nasdaq, winners topped losers 4-to-3 as 1.61 billion shares changed hands.
Dell, Cisco among actives
Weak networking and telecommunications stocks, strong computer hardware and software makers, and mixed activity in the chip sector kept the Nasdaq composite in flux.
On the Dow industrials, IBM (IBM: down $1.83 to $120.31, Research, Estimates), Wal-Mart (WMT: down $1.20 to $55.80, Research, Estimates), Boeing (BA: down $1.15 to $38.69, Research, Estimates) and Microsoft (MSFT: down $0.67 to $68.61, Research, Estimates) were the most significant decliners.
Microsoft (MSFT: down $0.67 to $68.61, Research, Estimates) suffered a setback after a federal judge threw out a proposed settlement that would have resolved dozens of price-fixing lawsuits against the computer software maker.
Automaker Ford Motor (F: up $0.21 to $15.50, Research, Estimates) said it will close five plants and take a $4.1 billion charge amid a major restructuring that will include 35,000 job cuts, 22,000 in North America.
In the latest chapter in the Enron (ENE: unchanged at $0.67, Research, Estimates) collapse, UBS Warburg won the bidding war for the energy trading company's wholesale operations. The value was not immediately revealed; the judge in Enron's bankruptcy case will rule on the bid next week.
A story in Business Week offered caustic analysis of Cisco Systems (CSCO: down $0.79 to $20.21, Research, Estimates), the leading provider of network switches and routers, saying that there are questions about the company's accounting and capacity to grow.
Another Business Week story highlighted the tremendous growth of storage software maker EMC (EMC: up $0.10 to $17.19, Research, Estimates) and its potential to be acquired by computer hardware maker IBM (IBM: down $1.83 to $120.31, Research, Estimates).
Influential Lehman Bros. analyst Dan Niles raised his fourth-quarter 2001 and full-year 2002 earnings per share estimates on No. 1 chipmaker Intel (INTC: down $0.10 to $34.55, Research, Estimates), saying that the demand for the Pentium 4 is greater than the supply available.
Memory chipmaker Rambus (RMBS: up $0.40 to $8.99, Research, Estimates) reported a fiscal first-quarter profit Thursday that declined from the same period one year earlier but nonetheless topped expectations.
Prudential issued negative comments about chip equipment maker Cree (CREE: down $7.05 to $23.60, Research, Estimates) after it said late Thursday that it earned 8 cents a share in its fiscal second quarter, a penny shy of First Call estimates and a sharp decline from the 18 cents a share earned a year earlier.
Merrill Lynch reiterated its "strong buy" rating and $35 price target on computer hardware maker Dell Computer (DELL: down $0.33 to $29.00, Research, Estimates), saying the company looks primed to beat current fiscal fourth-quarter expectations.
Biological detection device maker Igen International (IGEN: up $4.06 to $42.15, Research, Estimates) said Thursday that a jury has awarded it $505 million in damages in a settlement with Roche Diagnostics, a Swiss pharmaceuticals group. 
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