NEW YORK (CNNfn) - Wall Street stocks dropped more than 130 points in early trading Friday in reaction to comments by U.S. Federal Reserve Chairman Alan Greenspan that stocks are overvalued.
At 10 a.m., the Dow Jones industrial average was off 131.56 points at 6,305.54. On the broader market, New York Stock Exchange declines trounced advances, 2,295 to 56, as volume topped 55.3 million shares.
Among the other key broader and secondary market indexes, the S&P 500 fell 14.61 points to 729.77, the Nasdaq Composite lost 37.90 points to 1,262.22 and the American Stock Exchange declined 10.74 points to 579.29.
Investors were rattled by a familiar lightening rod: Federal Reserve Chairman Alan Greenspan. In a speech Thursday night, the powerful central bank chief warned that "irrational exuberance" in the stock market was reason for concern. Greenspan struck a nerve by suggesting the Wall Street is riding a speculative bubble, a possibility that undermined confidence in markets around the world.
"The market may have a great deal of difficulty staying open today" once electronic trading curbs kick in, George Jacobsen, chief investments officer at Trevor, Stewart, Burton & Jacobsen, told CNNfn. "I look at the market at this point as in a potential correction in which you have an opportunity to buy stocks."
As if investors did not already have enough to think about, the Labor Department reported early Friday that non-farm payroll jobs grew by just 118,000 in November and the nation's unemployment rate rose to a four-month high at 5.4 percent. The two figures suggested that the economy is slowing down, allaying some fears about rising interest rates. Even so, Wall Street opening in a selling mood.
In early trading on the downward spiral, General Electric (GE) lost 2-1/8 to 95-1/2, while IBM (IBM) tumbled 4-1/2 to 154 and Philip Morris (MO) fell 1-5/8 to 106-1/4. Boeing (BA) also lost 1-3/4 to 94-5/8 and AT&T (T) slipped 7/8 to 37-5/8.