stocks on fed watch again

Stocks on Fed watch again

A return of Alan Greenspan to Capitol Hill, another round of hawkish comments by a Fed official and more testimony could set the course for stocks Wednesday.
June 7, 2006: 6:28 AM EDT


NEW YORK (CNNMoney.com) - Stocks investors were on hold early Wednesday ahead of the comments from former Federal Reserve Chairman Alan Greenspan and two current Fed policymakers that could determine if the Dow can stay above the 11,000 mark.

U.S. stock futures were mixed in early trading, indicating a flat or mixed open for U.S. markets, ahead of the remarks. Greenspan is set to testify on at a Senate Foreign Relations committee hearing on oil dependence and economic risks at 9 a.m.

Also set to make remarks Wednesday are Fed Governor Mark Olson, who gives opening remarks at a hearing home lending and Atlanta's Fed President Jack Guynn talks on the economy. Comments by current Fed Chairman Ben Bernanke on the need to battle inflation on Monday sent stocks into a sharp two-day sell-off.

Wednesday the Wall Street Journal reported more hawkish comments on inflation by William Poole, president of the Federal Reserve Bank of St. Louis, a member of the Federal Open Market Committee, which sets target interest rates for the central bank.

"If inflation turns out to exceed ... our target range, I do not believe we can count on a slowing economy to bring inflation down, by itself, quickly," Poole told the paper, a comment that could signal the Fed will raise rates at its June 29 meeting and beyond.

Oil prices were lower ahead of the 10:30 a.m. ET weekly report on U.S. inventories.

The July light crude futures contract for NYMEX was down 65 cents to $71.85 in electronic trading, while the July contract for Brent crude lost 54 cents to $70.27

Major markets closed lower in Asia, while major European markets were little changed in early trading.

Treasury prices were lower, lifting the yield on the benchmark 10-year note to 5.01 percent from the 5.0 percent level reached late Tuesday. The dollar was lower against the yen but up against the euro.