NEW YORK, Nov 19 (AFP) - US markets showed losses Friday at midday, after prices felt the sting of Fed chairman Alan Greenspan's words on US deficits and rebounding oil prices.
At 1800 GMT, the Dow Jones Industrial Average was down 1.05 percent and the Nasdaq 1.32 percent.
The Dow shed 110.91 points to 10,461.64 and the tech-heavy Nasdaq composite index lost 27.70 points to 2,076.58.
The broader-based Standard and Poor's 500 fell 4.97 points or 1.01 percent to 1,171.63.
Some 800 million shares changed hands on Wall Street and 1.17 billion on the Nasdaq.
The yield on 10-year Treasury bonds rose to 4.188 percent against 4.117 percent Thursday and the yield on the 30-year bonds rose to 4.873 percent against 4.813.
The decline in the markets was due to Greenspan's comments on the deficits, according to Scott Wren, market strategist with AG Edwards.
Greenspan warned of the danger of a negative US current account. The deficit reached a record 166.2 billion dollars in the second quarter. Japan and China have been major buyers of US debt in recent years.
Greenspan, who has warned repeatedly that action will have to be taken to rein in the deficit, said current account imbalances are not an automatic problem.
But he added that "cumulative deficits which result in a marked decline of a country's net international investment position -- as is occurring in the United States -- raise more complex issues."
Greenspan said that for the moment the United States was seeing only "limited indications" of foreign resistance to financing the deficit.
"Yet net claims against residents of the United States cannot continue to increase forever in international portfolios at their recent pace.
"Net debt service cost, though currently still modest, would eventually become burdensome," he said.
New York markets, which were up in three of the past four sessions, were also hit by profit-taking.
Oil and service stocks rallied for the fourth consecutive day, led by gains in shares of ConocoPhillips up 48 cents to 86.74 and Halliburton up 1.07 or 2.8 percent to 40.
Crude futures jumped 1.78, or 3.9 percent, to 48 a barrel.
Walt Disney gained 1.71 percent to 26.82 after announcing a 24 percent rise in net quarterly earnings thanks to the profitability of cable television operations.
Pharmaceuticals dropped after an expert at the US Food and Drug Administration, which regulates the industry, said at least five drugs sold in the United States and elsewhere were risky to use and deserved closer scrutiny.
The drugs were Meridia, from Abbott, Crestor, by AstraZeneca, Accutane by Roche, Bextra anti-inflammatory by Pfizer and Serevent from GlaxoSmithKline.
Abbott lost 1.18 percent to 42.86, AstraZeneca 2.26 to 39.43, Pfizer 1.22 percent to 27.43. Merck, which took its anti-inflammatory, Vioxx off the market in late September, lost 1.06 percent to 27.07.
And Gap clothiers climbed 0.09 percent to 22.56 after goodquarterly news.
11/19/2004 19:07 GMT - AFP