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The Dow Jones industrial average broke the historic 4000 barrier for the first time, as the stock and bond markets leapt to record highs on Fed Chairman Alan Greenspan’s promise Wednesday to contain or even reduce interest rates. After surging past the mark in brisk early trading, and rising as much as 48 points, the blue chip barometer closed at 4003.33 (up 30.28 points). Some Wall Street analysts are now predicting that the Dow could break 4500 before year’s end. The rally began yesterday after Greenspan told Congress that the central bank might hold interest rates steady – or cut them – as the economy cools down, and continued today when he urged lawmakers to slash the budget deficit for the long-term health of the economy. TIME Washington correspondent Suneel Ratan says Greenspan, once reviled in some quarters of Capitol Hill for his series of rate hikes, is now earning plaudits from investors for having contained inflation without quashing the economy’s robust 4 percent growth. “Investors are basically voting with their pockets and patting Greenspan on the back, and it’s probably well deserved,” Ratan says.

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