Tech Leads, Value Worries Recede as Dow 10,000 Hits Record Books

Happy, happy. Joy, joy.

Catching some traders and pundits off balance, the Dow Jones Industrial Average rambled upstream to notch its first-ever close above 10,000 as investors were excited by a raft of mergers.

The Dow rose as high as 10,040.36 before closing up 184.54, or 1.9%, to 10,006.78, eclipsing its previous high of 9997.62 set March 18.

Major Indices INDEX CHANGE % VALUE YR TO DATE Dow 184.54 +1.9% 10,006.78 +8.9% S&P 500 27.19 +2.1% 1309.99 +6.6% Nasdaq 73.67 +3.1% 2492.84 +13.7% Russell 2000 5.84 +1.5% 399.76 -5.3% TSC Internet 24.58 +3.9% 654.16 +61% TSC E-Commerce 1.17 +1.1% 112.70 +32.4% TREASURY BOND CHANGE VALUE YIELD 30-Year 21/32 94 11/32 5.645%

The Dow's close above 10,000 comes 11 months and 23 days after it first closed above 9,000, on April 6, 1998. From its inception May 26, 1896, it took the DJIA 76 years and nearly seven months before it first closed above 1000, on Nov. 14, 1972. The index didn't close above 2000 until Jan. 8, 1987, and the first close above 3000 came April 17, 1991. Since then, millennial milestones have fallen more quickly (which makes sense because they represent less of a percentage move as the index has risen).

The Dow closed above both 4000 and 5000 for the first time in 1995. After passing 6000 on Oct. 14, 1996, the index took just four months to close above 7000 on Feb. 13, 1997, still its fastest millennial ascent in history. About five months later, on July 16, 1997, 8000 was eclipsed and then 9000 fell last April, setting the Dow up for its run to five figures.

But at today's close, not everyone was as excited as a CNBC producer.

"I can't be right all the time," said Sam Ginzburg, managing director of equity trading at Gruntal, who admitting shorting S&P 500 Spiders (SPY Quote) as the Dow approached 10,000, just as he had done when it first approached the level earlier this month. "I ended up losing a little but I mitigated a decent-sized loss into a minor one. It was more of a fun thing to do" than a big bet.

While chagrined, Ginzburg tipped his hat to the market's performance.

"We had good tape action today and we'll probably rally into tomorrow," he said. "But Dow 10,000 is going to be all over the news and I'd be more comfortable shorting into the long weekend."

The stock market is closed Friday in observance of Good Friday.'The valuation parameters at this point in time make lots of people scratch their heads, and I'm one,' Prime Charter's Scott Bleier said. But 'since the bottom line is we're here to make money, you must go with what works. That means putting a lot of discipline aside.'

The market was able to overlook the bond market's woes, troubling developments in Kosovo and the Federal Open Market Committee's meeting tomorrow, but the trader wondered how much further the rally can go.

"Everybody wanted to do this. Kudos," he said. "Now what? If you're not an unbelievable story, followed by technicals, followed by options activity, you'd better know what you're doing. The market is not going to be the bailout."

The price of the 30-year Treasury bond fell 21/32 to 94 11/32, its yield rising to 5.65%.

Dow 10K Just One Story in the Naked City

Dow 10,000 dominated the headlines, but other gauges rumbled higher as well.

The S&P 500 surged 27.19, or 2.1%, to 1309.99 but failed to surpass its all-time best of 1316.55. The Nasdaq Composite Index gained 73.67, or 3%, to 2492.84, its fifth-biggest point gain in history and its highest close since Feb. 3. Even the Russell 2000 climbed 5.84, or 1.5%, to 399.76.

Internet favorites also rose. TheStreet.com Internet Sector index rose 24.58, or 3.9%, to an all-time high of 654.16 and TheStreet.com E-Commerce Index gained 1.17, or 1.1%, to 112.70.

In New York Stock Exchange trading, a modest 749.7 million shares were exchanged while gainers led 1,828 to 1,127. In Nasdaq Stock Market activity 879.3 million shares were exchanged while gainers led 2,174 to 1,765. Still, new 52-week lows bested new highs 81 to 44 on the Big Board and by 80 to 70 in over-the-counter trading.

Equities were enlivened by several merger developments, notably confirmation that BP Amoco (BP Quote) and Atlantic Richfield (ARC Quote) are engaging in prenuptial discussions. That, plus a Morgan Stanley Dean Witter upgrade of Baker Hughes (BHI Quote) and Halliburton (HAL Quote) had the once-dormant energy stocks soaring. The American Stock Exchange Oil & Gas Index gained 4% and the Philadelphia Stock Exchange Oil Service Index rose 5.3%.

Elsewhere on the merger front, Computer Associates (CA Quote) said it will acquire Platinum Technology (PLAT Quote). Also, CBS (CBS Quote) is said to be close to buying King World Productions (KWP Quote), while Bristol-Myers Squibb (BMY Quote) and Glaxo-Wellcome (GLX Quote) have reportedly engaged in preliminary talks.

Other developments abetting the rally included Microsoft's (MSFT Quote) stock split; a Food and Drug Administration ruling that Warner-Lambert (WLA Quote) can still market Rezulin; and the absence of a profit warning by Compaq (CPQ Quote), whose management met with analysts this morning.

That's a lot of good news, much of it focused on the technology and drug sectors. As a result, the Morgan Stanley High-Tech 35 rose 4.2% and the Nasdaq 100 gained 3.7% while the American Stock Exchange Pharmaceutical Index climbed 2.6%.

Dress You Up in My Love

In addition to the aforementioned, equities were buoyed by so-called window-dressing by fund managers, or the perception thereof.

"Seemingly, the last nine out of 10 quarters has been a mad rush to plow into the best performing names," said Scott Bleier, chief investment strategist at Prime Charter. "It's exacerbated by need for money managers to show they own these big winners in their portfolios. It's the end of the quarter and you've got to show you own something."

Bleier, who predicted back on Dec. 14 that the Dow would hit 10,000 "sometime" in the first quarter, noted big-cap tech stocks fueled the Dow's latest flurry.

"While many disputed their leadership, they never relinquished leadership," he said. "When they paused, the whole market paused. The only caveat is [that] Dell (DELL Quote) is underperforming."

In addition to the "Lucky Seven" tech giants -- Dell, Microsoft, Sun Microsystems (SUNW Quote), Cisco (CSCO Quote), Intel (INTC Quote), MCI WorldCom (WCOM Quote), and America Online (AOL Quote) -- Bleier remarked on the performance of lesser-known Net and related names, such as Digital Lava (DGV Quote), which rose 31% on "no news."

"The valuation parameters at this point in time make lots of people scratch their heads, and I'm one," the strategist conceded. But "since the bottom line is we're here to make money, you must go with what works. That means putting a lot of discipline aside."

Although not the main story, Internet stocks were a "big fat story" today, he said. "If Internet stocks were to crash and burn tomorrow, I don't think flow of funds would be as hot and heavy."

Prefacing the comment by saying he trades Internet stocks and so is not guilty of "sour grapes," and acknowledging "anybody who badmouths Internet stocks is a major idiot," Bleier said: "There is no reality with these stocks. Frankly, I am becoming more and more convinced this is the greatest speculative mania of all time."

Among other indices, the Dow Jones Transportation Average rose 34.26, or 1.1%, to 3294.37; the Dow Jones Utility Average rose 0.54, or 0.2%, to 300.31; and the American Stock Exchange Composite Index slid 0.86, or 0.1%, to 717.88.

Elsewhere in North American equities, the Toronto Stock Exchange 300 rose 17.57 to 6652.77 and the Mexican Stock Exchange IPC Index jumped 108.85, or 2.3%, to 4845.43.

Monday's Company Report

By Heather Moore
Staff Reporter

(Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.)

As noted above, Atlantic Richfield excelled 8 11/16, or 13.3%, to 74 1/16 after confirming it's in merger talks with BP Amoco. BP Amoco, the third-largest oil company in the world, is expected to buy Arco in a stock deal valued around $25 billion. BP Amoco lifted 4 9/16 to an all-time high of 105. TheStreet.com first caught wind of a potential deal last night.

Elsewhere in oil, Halliburton surged 3 1/16, or 8%, to 41 3/16 and Baker Hughes surged 1 1/2, or 6.3%, to 25 5/16 after Morgan Stanley Dean Witter upgraded the stocks to strong buy from outperform.

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In other merger news, Platinum Technology rocketed up 14 3/16, or 144.5%, to 24 1/16 after Computer Associates agreed to buy its rival for $3.5 billion in one of the biggest deals to hit the software industry. Computer Associates flew 3 1/16, or 9%, to 37.

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As mentioned above, Mister Softee charged up 3 1/4 to an all-time high of 92 3/8 after Friday's stock split and ahead of this week's talks with the Justice Department.

Mergers, acquisitions and joint ventures

Audio Book Club (KLB Quote) sliced off 7/8, or 7.1%, to 11 3/8 after agreeing to acquire Audiobooks Direct, a unit of Bertelsmann's Doubleday Direct. Financial terms of the agreement weren't disclosed.

Corporate Renaissance Group (CREN Quote) jumped up 1, or 15.7%, to 7 1/2 after saying late Friday it received a proposal from a management-led group to acquire all the company's outstanding shares for $8 a share.

General Electric (GE Quote) rose 4 3/16 to 112 on word its GE Capital unit is in talks to buy up to 90% of Indonesia's Bank Bali.

Glaxo Wellcome picked up 2 7/16 to 64 1/4 after the Financial Times said the company is looking for merger partners after preliminary discussions with Bristol-Myers Squibb were called off. Bristol-Myers reeled in 2 11/16 to 62 3/16.

Goldman Sachs said it will buy a 22% stake in Wit Capital, an online investment banker and broker. Both companies are set to go public in the coming months.

Juno Lighting (JUNO Quote) climbed 2 3/8, or 11.7%, to 22 3/4 after agreeing to sell a majority of the company to privately held Fremont Partners while keeping 12.9% of its shares publicly held. The company is unrelated to Juno Online Services (JWEB:Nasdaq), which is planning an IPO.

Lucent (LU Quote) flourished 7 7/8, or 7.7%, to 109 15/16 after agreeing to supply $1 billion in equipment and services to former parent AT&T (T Quote) under a four-year pact. AT&T slid 1 to 81 11/16. Also, Lucent will replace AMP (AMP Quote) in the S&P 100 index, Standard & Poor's announced late Friday.

Among other changes to S&P indices announced last week, Kansas City Southern (KSU Quote), an S&P MidCap 400 component, rallied 2 11/16, or 5%, to 56 3/8 on news it will replace AMP in the S&P 500 after the closing bell April 1. AMP is being acquired by S&P 500 component Tyco (TYC Quote).

Still elsewhere, Mohawk Industries (MHK Quote), an S&P SmallCap 600 component, rose 1 3/8, or 5.3%, to 27 3/8 on news it will replace Kansas City Southern in the midcap index. Silicon Valley Group (SVGI Quote) rose 1 3/16, or 11.4%, to 11 5/8 on news it will replace Mohawk Industries in the small-cap index. And MedImmune (MEDI Quote), a component of the small-cap index, rose 1 1/2 to 61 1/16 on news it will replace Varian Associates (VAR Quote) in the midcap index.

Mace Security (MACE Quote) shot up 2 5/32, or 71.9%, to an annual high of 5 1/4 after saying its management and board members will buy an $8.75 million stake in the company. Mace also announced that a new board will be put in place and that Louis Paolino will become chairman and CEO.

Nissan (NSANY Quote) slipped 1/32 to 7 9/16 after Renault bought a 37% stake in the company for $5.4 billion. Renault also took a 23% stake in Nissan Diesel Motor, Nissan's truck-making affiliate.

Qwest Communications (QWST Quote) tacked on 3 3/8 to 74 13/16 after saying that business customers of Banyan Systems (BNYN Quote) will be able to make toll-free phone calls on the Internet using Qwest technology. Banyan climbed 1 1/2, or 12.9%, to 13 1/4.

Earnings/revenue reports and previews

Aftermarket Technology (ATAC Quote) leapt 3/4, or 12.2%, to 6 15/16 after recording a fourth-quarter loss of 22 cents a share, 1 cent wider than the three-analyst view and behind the year-ago profit of 30 cents.

Eastman Kodak (EK Quote) rose 3/8 to 65 5/8 after forecasting first-quarter earnings of 73 cents to 80 cents a share, below the 11-analyst estimate of 82 cents. But the company also projected second-quarter earnings of $1.50 to $1.59 a share, above the 10-analyst estimate of $1.45.

Rite Aid (RAD Quote) lowered 1/4 to 25 11/16 after reporting fourth-quarter earnings of 28 cents a share, 3 cents below the 13-analyst outlook and behind the year-ago 44 cents.

Walgreen (WAG Quote) tumbled 1/2 to 29 3/8 after posting second-quarter earnings of 20 cents a share, in line with the 15-analyst estimate and up from the year-ago 17 cents.

Analyst actions

Alza (AZA Quote) skidded 5 1/8, or 11.2%, to 40 3/4 after Morgan Stanley Dean Witter slashed it to outperform from strong buy.

EchoStar (DISH Quote) revved up 5 7/8, or 8.6%, to an all-time high of 74 11/16 after Goldman Sachs upped its price target to 82 from 65 a share.

Fannie Mae (FNM Quote) shaved off 3/8 to 71 1/8 and Freddie Mac (FRE Quote) shaved off 5/16 to 59 1/16 after Morgan Stanley Dean Witter upgraded the companies to strong buy from outperform.

McLeodUSA (MCLD Quote) popped up 3 1/16, or 7.9%, to 41 7/8 after Morgan Stanley Dean Witter lifted it to strong buy from outperform.

O'Reilly Automotive (ORLY Quote) vaulted 3 1/8, or 8.4%, to 40 3/8 after Prudential Securities upgraded it to strong buy from accumulate.

Perclose (PERC Quote) declined 7 1/8, or 17.3%, to 34 1/8 after Vector Securities dropped it to neutral from attractive.

Qualcomm (QCOM Quote) expanded 3 7/16 to 114 15/16 after Credit Suisse First Boston raised it to buy from hold and increased its 2000 earnings estimate for the company to $3.50 from $3.35 a share.

Miscellany

Amazon.com advanced 10 5/8, or 7.6%, to 149 5/8 after announcing plans to launch an online auction service. Rumors that the book and music retailer would enter the auction biz first hit the Street Friday. Separately, Amazon agreed to buy 50% of closely held Pets.com.

Auctioneer eBay lowered 6 3/4 to 147 25/32 on the Amazon news despite word it and Warner Bros. Online, a unit of Time Warner (TWX Quote), set a three-year strategic alliance. Time Warner rose 1 9/16 to 70 3/8. uBid (UBID Quote) tumbled 5 3/4, or 7.7%, to 69; and Onsale tumbled 1 3/16 to 34 1/16.

Boeing (BA Quote) dwindled 1/16 to 34 3/4 after saying it made changes in its software programs in an effort to cut costs and end losses at its commercial airplane division.

Computer Literacy (CMPL Quote) soared 7 9/16, or 36.7%, to an all-time high of 28 1/4 after the company changed its name to Fatbrain.com and launched a new Web site. Also, the company will trade under the symbol FATB starting Tuesday.

Global Pharmaceutical (GLPC Quote) doubled, rising 1 1/8 to 3 3/8, after receiving approval from the FDA to manufacture and market Minocycyline HCL, a generic version of the antibiotic Minocin.

Iridium World Communications (IRID Quote) dropped 1 9/16, or 7.3%, to 19 15/16 after saying it received a two-month waiver on its credit agreement. The company also said CFO and Vice President Roy T. Grant plans to resign April 16 for personal reasons.

iVillage (IVIL Quote) exploded up 25 3/4, or 32.7%, to a postoffering high of 104 5/8 after David Alger of Fred Alger Management named it as one of his top picks in this week's Barron's.