Alan Greenspan's comments about the need for banks to set money aside to cushion the impact of a downturn, together with the higher-than-expected rise in US producer prices, sent shivers through stock markets worldwide. The Greenspan comments and the PPI figures served only to increase speculation that the Fed would raise rates at its next open markets committee, although there are many in the market who wish the Fed had taken the plunge on interest rates earlier and ended the speculation.
Needless to say, most stocks lost ground but - with the exception of CRH which slumped 68 cents to €18.42 (£14.51) - most of the falls were modest with the result that the market fell only 1.5 per cent.
A major exception to the weaker tone was Iona which was up another $4 on $23 as the Irish market closed, bringing its gains since the beginning of the week to over 50 per cent. Good third-quarter figures are one factor behind the Iona recovery but some in the market believe it has lined up some major announcement to coincide with its Iona World conference on Monday.
Among the leaders, Eircom dropped 12 cents to €4 (£3.15) and is unlikely to make much progress before its interim results in a month. Also affecting its share price will be Telia's 14 per cent stake, which is expected to be sold to fulfil a condition the EU has attached to the Telia/Telenor merger.
Elsewhere, AIB fell 15 cents to €12.07 (£9.51), Bank of Ireland lost six cents to €7.87 (£6.20) and Smurfit lost 1 1/2 cents to €2.61 1/2 (£2.06). Smurfit, however, has been given the nod by Paine Webber which has increased its earnings forecast for next year by three cents to 28 cents per share and given Smurfit a "buy" tag.
