Overheard On The Street

Michael Lyon,
Senior Trader, Morgan Stanley: “The market is acting very nicely here this
morning. It just continues to power higher. Nasdaq’s not participating, but I
suspect that at some point it’s going to get taken along. It appears we’re
getting set up for a 50-basis-point change in rates, and if we don’t get that,
I’m afraid we’re going to be a little disappointed. There were some rumors that
it could even go as high as 75, but I think we’re just whistling Dixie there. It
certainly looks, though, like we’re looking at 50.”

Charles Payne,
President, Wall Street Strategies: “Today’s session is sort of like the
Monday sessions we’ve become accustomed to. There’s a lot more trepidation in
the volatile stocks which could probably pull back a bunch if something were to
go wrong with the conclusion of Wednesday’s FOMC meeting. Of course, on the Dow,
Procter & Gamble represents a lot of that caution. At the same time, there
is a whole group of people who have been successfully trading this market this
year that want to be long a stock or a couple of stocks when this number comes
out. Even the bears will concede that maybe we’ll get some type of short-term
pop. My work tells me 3050 to 3100 is the key resistance on the Nasdaq. By the
same token, we may get it and then again say ‘now what?'”

Frank
Gretz
, Market Analyst, Shields & Co.: “Why
worry?
Greenspan will bail us out, or so the thinking goes.
Another half-point cut in rates is going to send everyone scurrying to
buy a new PC.
Or it will make all those struggling telecoms go running to Corning for
more of that good cable stuff, which they already have too much of.
But, of course, that’s only if there is a half-point cut.
In his testimony on Thursday, Greenspan said nothing to discourage the
market from thinking another half-point cut was in the bank, so to speak, but
all the more reason it had better be so.

Even
with the news the market wants, the half-point cut, it will be important to see
what the market does.
The month of January, especially this year, has been a real window of
opportunity — the usual seasonal money inflows, and the unusually large crop
of tax loss sold-out, beaten-up stocks.
But then comes February.”