Dow Inches Up to Record; Greenspan Speaks Today

U.S. stocks ended mostly higher Monday in moderate trading, with some nervousness evident ahead of Federal Reserve Board Chairman Alan Greenspan’s testimony on Capitol Hill today.

Meanwhile, in Tokyo, stocks plummeted again.

On Wall Street, the Dow Jones industrials added to Friday’s 67.73-point surge, creeping up 10.77 points to a record 6,843.87.

But broader indexes were mixed. The Nasdaq composite index also hit a record, rising 15.23 points to 1,364.28, as many technology shares gained. However, the New York Stock Exchange composite index finished unchanged, and winners had only a thin margin over losers on the Big Board.

The bond market, meanwhile, was closed in observance of Martin Luther King Jr.’s birthday.

Analysts said the stock market still had positive momentum, but some traders were hedging their bets ahead of Greenspan’s testimony today before a Senate committee.

Wall Street always scrutinizes Greenspan’s comments for any clues about Fed monetary policy, a persistent source of tension for markets.

With the outcome of the Fed’s next policy meeting--Feb. 4-5--still a matter of debate, what Greenspan says about the economy and the stock market’s continuing surge is drawing even sharper attention.

On Dec. 5, Greenspan suggested that he was worried about a potential stock market bubble when he raised the question of whether financial markets were beset by “irrational exuberance.”

That was 406 Dow points ago.

In stocks’ favor, analyst say, is that fourth-quarter corporate earnings reports have generally been favorable.

“Earnings are clearly coming in better than expected,” said Hugh Johnson, chief investment officer at First Albany Corp. Even so, he said, “there’s an underlying nervousness, a belief that we’ve moved very far very fast,”

The market is moving in the other direction in Japan--and fast. Japanese stocks took another steep tumble Monday as the government failed to offer new economic initiatives in a closely watched policy speech and reaffirmed its resolve to raise taxes.

The key Nikkei-225 stock index in Tokyo closed down 609.70 points, or 3.4%, at 17,480.34.

It had briefly plunged to 17,237.27--a drop of about 850 points--ahead of a speech by Prime Minister Ryutaro Hashimoto, who vowed to press ahead with tax increases and repeated pledges of broad reforms.

Among Monday’s market highlights:

* Stocks of many financial service companies soared amid speculation that industry consolidation would continue after Banc One’s announcement that it’s acquiring credit card issuer First USA for $6.75 billion in stock. First USA soared 8 7/8 to 45 5/8 on the news, while Banc One fell 3 31/64 to 41 41/64.

Among other credit card issuers, Advanta gained 5 9/16 to 48 11/16; Capital One Financial rose 4 7/8 to 38 3/8, a new high; MBNA rose 2 3/8 to 33 1/2, also a new high; Green Tree Financial rose 2 1/8 to 39; and Household International gained 2 3/4 to 94 3/8.

* Other financial service stocks gaining included Citicorp, up 1 3/8 to 109 1/4; Merrill Lynch, up 1 5/8 to 84 3/8; SunAmerica, up 1 1/8 to 48 7/8; and Dean Witter Discover, up 1 to 36 1/2.

* The Nasdaq market’s record close was powered in part by Microsoft, up 3 5/8 to 90 3/4 after Friday’s strong quarterly earnings report; Cisco Systems, which rose 2 1/8 to 74 3/4; Sun Microsystems, which climbed 1 3/16 to 32 3/8; and Atmel, which jumped 2 5/8 to 43 7/8.

Among software shares that gained, Oracle climbed 1 1/8 to 42 5/8, Novell climbed 13/16 to 10 1/2, BMC Software rose 1 3/4 to 49 3/8 and Peoplesoft gained 1/4 to 53 3/4.

Meanwhile, Web browser company Yahoo rose 2 7/8 to 29 1/2 because of optimism about Internet advertising growth.

* Target Therapeutics surged 10 1/4 to 57 on speculation that the company would be acquired by Boston Scientific. A deal was confirmed after the close of trading. Boston Scientific, which will pay 1.07 shares for each Target share, fell 4 5/8 to 66 7/8 ahead of the announcement.

* On the downside, Dow Jones slid 4 1/8 to 26 3/4 after reporting flat fourth-quarter earnings and announcing plans to spend up to $650 million to revitalize and expand its Dow Jones Telerate financial information services unit.

* Some biotech shares pulled back after surging recently. Agouron Pharmaceuticals slumped 3 1/2 to 76 1/4, BioChem Pharma sank 3 1/4 to 52 and Mycogen lost 2 1/4 to 25 1/2.

Bigger drug stocks were weak as Pharmacia Upjohn plunged 2 3/4 to 38 1/8 as its CEO said he would resign. Merck lost 3/8 to 85 5/8, Schering-Plough fell 3/4 to 70 7/8 and Warner-Lambert was off 7/8 to 76 3/4.

In commodities trading, orange juice futures surged after an unexpected frost in Florida citrus groves threatened to damage crops throughout the state.