"A lot of the initiatives are relatively small in size and probably very few of them are going to be passed by a Republican Congress," said David Jones, chief economist at investment firm Aubrey G. Lanston & Co.

But, he added, "the concept of a budget cap on discretionary spending is gone and that's something that will increasingly bother (Federal Reserve Chairman Alan) Greenspan in his fourth term."

In the final State of the Union speech of his eight-year presidency, Clinton proposed paying down the national debt in 13 years, a plan markets see as positive for the long-term inflation outlook and for the economy.

On the other hand, Clinton proposed a net $250 billion in tax cuts over the next decade, which translates to a gross $350 billion cut.

Analysts said if all of Clinton's initiatives sailed through Congress, markets might worry about lapses in fiscal discipline in the face of large federal budget surpluses.

The Congressional Budget Office reported earlier this week that huge tax revenues engendered by a strong economy would create a surplus outside the Social Security system for the next 10 years that would total more than $1.9 trillion.

Balanced Budget, Big Spending

Robert Stovall, president of Stovall/Twenty-First Advisers, said that in the State of the Union address, Clinton "balanced the budget in one sentence and offered an enormous litany of expenditures in the next."

Given the balance between debt reduction and spending plans, economists said the speech should have no repercussions for the financial markets on Friday.

"I'd be very surprised if this speech had any market impact," said Michael Moran, chief economist at Daiwa Securities America Inc.

Jones of Aubrey G. Lanston agreed the speech should have "no implications" for markets.

Clinton's litany of proposals could look as if fiscal discipline was being weakened a little, said Hugh Johnson, chief investment officer at First Albany Corp.

But he said markets would quickly get over that notion and "back to business as usual."

Plan Promotes Fiscal Discipline

Moran said Clinton's plan to credit interest savings from debt reduction to the Social Security and Medicare programs would promote fiscal discipline because it would take part of the surplus dollars off the table and insulate them from new spending programs.

As to Clinton's proposed tax cuts, the question is how many of those suggestions Congress would approve, Moran said.

"I think they'll throw a lot of them away," he said.

One industry applauded Clinton's speech.

The Semiconductor Industry Association (SIA) said it welcomed his call to enact congressional approval for Permanent Normal Trade Relations (PNTR) with China and to increase technology research funding.

Clinton proposed a $3 billion increase in basic science and technology research for the 21st Century Research Fund.

"Congressional approval of PNTR for China means more opportunity for high-tech trade with China and increased U.S. exports," the semiconductor group said.