Bush effect more likely >>>The market was under pressure for most of President Bush's speech," said James Park, managing director of Rodman & Renshaw. "Once that was over, tech led a rebound on gains for Intel and a turnaround in shares of Oracle."
"And traders that were short playing recent weakness and volatility in tech were caught with their pants down," Park added.
In a White House news conference, President Bush defended his fiscal policies, saying the U.S. economy "looks very strong." Bush said he would continue to press Congress to make his first-term tax cuts permanent, arguing that allowing them to expire would be equivalent to a tax hike that could slow the economy.
Earlier, investors mulled a speech from Federal Reserve Chairman Ben Bernanke.
Paul Nolte, director of investments at Hinsdale Associates, said the Fed chief's speech was "a non-event for the market," as the Fed chief played his cards close to his chest on the subject of interest rates.
Bernanke, in his speech to the Economic Club of New York, focused on the implications of the recent inversion of the yield curve on the bond market, and gave few hints on the future course of interest rates. See full story.
But Gordon Fowler, chief investment officer at The Glenmede Trust Company, took a different tack.
"A lot of optimism that closed the week may have been slightly diminished by chairman Bernanke's speech last night," said Gordon Fowler, chief investment officer at The Glenmede Trust Company.
Fowler said investor hopes had risen that the Federal Reserve would end its cycle of interest-rate hikes at the upcoming March 28 meeting. But now, says Fowler, the odds have risen for a further rate hike at the central bank's May meeting as well as further on down the road.
The fed fund futures market continues to price in a 100% chance of a 0.25 percentage point interest rate hike following the Federal Reserve's policy setting meeting on March 28 in the wake of Bernanke's speech late Monday. Expectations for a hike following the Fed's May meeting, however, increased slightly. The market is now pricing in a 60% chance of a hike in May vs. a 52% chance on Monday. Over the last two years, the Fed has raised its key short-term rate 14 times. The Fed funds rate now stands at 4.5%.
On the broader market for equities, decliners and advancers were evenly balanced on the New York Stock Exchange, while winners led losers by 15 to 13 on the Nasdaq.
Volume was 592 million on the Big Board, and 1.02 billion on the Nasdaq.
Mixed wholesale inflation picture
The latest data offered a mixed inflation picture. The Labor Department said that wholesale prices plunged 1.4% in February, the biggest decline in nearly three years.
Economists expected the PPI to fall about 0.3%.
However, the core producer price index -- which excludes food and energy prices -- rose 0.3%, stronger than the 0.1% gain expected by Wall Street economists surveyed by MarketWatch. See Economic Calendar.
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