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Former Fed Chairman fears 'a dramatic contraction' in Chinese stocks
By Nick Godt, MarketWatch
Last Update: 3:03 PM ET May 23, 2007

NEW YORK (MarketWatch) -- U.S. stocks reversed morning gains and fell on Wednesday, after former U.S. Federal Reserve Chairman Alan Greenspan said on Wednesday that he feared a "dramatic contraction" in the Chinese stock market.

"It's not a major sell off, but the market has certainly reversed steam here," said Jay Suskind, director of trading at Ryan Beck & Co. "We've got light volumes and the market is a little tentative and nervous because of the strong market gains recently."

"Greenspan could be a catalyst for investors to take some profit, but not much more," Suskind said.

According to reports, Greenspan told a teleconference he feared a "dramatic contraction" in Chinese stocks, event hough global growth wouldn't necessarily be derailed by the move.

http://www.marketwatch.com/news/story/us-stocks-turn-lower-after/story.aspx?guid=%7BB5055DA4%2DA076%....