Tech, schmech.
Today it was all about rallying basic materials and energy stocks, with money rotating into those areas and out of recent winning sectors, notably tech. Oil, oil service, paper and gold mining stocks were among the sectors sporting steep gains. Chemical stocks also posted a nice upside hop.
| Major Indices | | INDEX | CHANGE | % | VALUE | YR TO DATE | | Dow |   -101.53 | -0.95% | 10,617.32 | +15.6% | | S&P 500 | -11.73 | -0.83% | 1365.28 | +11.1% | | Nasdaq | -18.93 | -0.60% | 3125.04 | +42.5% | | Russell 2000 |  1.21 | 0.27% | 446.28 | +5.8% | | TSC Internet | -1.89 | -0.22% | 839.01 | +106.4% | | TSC Red Hots |
-1.48 | -0.5% | 285.46 | N/A | | BOND | CHANGE | PRICE | YIELD | | 30-Year Treasury | -9/32 | 100 22/32 | 6.074% | |
As for technology stocks, which have been among the market's leaders in its recent rally, they took a break from that position -- at least for today. The
Nasdaq Composite Index fell 18.93, or 0.6%, to 3125.04, after starting out the session with a nice swing higher. The Nasdaq Comp peaked out of the gate, trading as high as 3174.81. But it quickly gave up those gains and traded in negative territory the rest of the session, although it did close off its intraday nadir.
Volume was heaviest by far on the
Nasdaq Stock Market, which experienced its heaviest day of trading ever as 1.459 billion shares changed hands. That was enough to beat the previous record of 1.438 billion shares changing hands
Oct. 29.
With today's negative close, the Comp broke its string of seven consecutive record-high closes. Computer makers and financials weighed on the Comp. Not helping out the Comp's cause were index heavyweights
Microsoft (MSFT Quote),
Intel (INTC Quote),
Cisco (CSCO Quote) and
MCI WorldCom (WCOM Quote), which all stumbled.
Cisco traded down ahead of its earnings report, which was released after the close. Cisco posted first-quarter operating earnings of 24 cents a share, a penny ahead of the
First Call/Thomson Financial 32-analyst estimate and up from the year-ago 17 cents. (
TheStreet.com/nytimes.com joint newsroom covered the report in a
story this evening.) Cisco was in the news this morning for its
acquisition of
Aironet Wireless Communications (AIRO Quote).
Also after the close,
Morgan Stanley Dean Witter priced
United Parcel Service's (UPS Quote) mammoth 109.4 million-share IPO above an already increased price range at $50 a share, raising $5.47 billion for the package shipper with the flashy uniforms, making it the largest U.S. IPO in history in terms of proceeds. The original price range was $36 to $42 a share, later bumped up to $47 to $49 a share.
TheStreet.com previewed the offering in a
story today.
Gains Scarce Among Blue-Chips
Blue-chips fell. The
Dow Jones Industrial Average gave up 101.53, or 1%, to 10,617.32.
Reflecting the trend overall in the market, among the Dow's biggest positive influences -- and there weren't many -- were commodity-related stocks
Exxon (XON Quote) and
International Paper (IP Quote). Losers in the Dow 30 were widespread, with 23 components sliding.
The
S&P 500 slumped 11.73, or 0.9%, to 1365.28. On the plus side, the
Russell 2000 rose. It added 1.21, or 0.3%, to 446.28.
TheStreet.com Internet Sector index slipped 1.89, or 0.2%, to 839.01.
RealNetworks (RNWK Quote) and
Amazon.com (AMZN Quote) dragged the DOT down the most.
TheStreet.com Red Hots index fell 1.48, or 0.5%, to 285.46. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.
Scott Curtis, senior equity trader at
Brown Brothers Harriman, said there was a lack of follow-through which led to the market's slump. The trader highlighted consumer and financials as sectors, which took a hit today, but he also noted they've had good runs.
Overall, the trader said it wasn't a really exciting day, although the Dow did fall 100 points, but that has come after running up 700 points recently, he pointed out.
As for Treasuries, the 30-year Treasury bond fell 6/32 to 100 24/32, yielding 6.07%. The long bond slipped as the market waded through a $15 billion auction of five-year notes today and ahead of a $10 billion auction of 10-year notes tomorrow and some key economic data tomorrow and Friday. The bond market is closed Thursday in observance of Veterans Day. The stock market is open.
On the economic data front, tomorrow the October
Producer Price Index will be released, while on Friday
retail sales and preliminary third-quarter
productivity figures will be released.
Oil service and oil issues rallied with crude oil prices in part after the
International Energy Agency said oil stocks among members of the
Organization of Economic Cooperation and Development "plummeted" by 1.8 million barrels a day in September. IEA also said that October compliance with OPEC's production cutback agreements fell slightly to 87% down from an upwardly revised 91% in September.
Also helping out oil and oil service stocks was a statement from Kuwait's oil minister, who said
OPEC members have agreed in principle to stretch output cuts beyond March 2000, according to a
Reuters report.
The
Philadelphia Stock Exchange Oil Service Index rallied 5.1%, while the
Chicago Board Options Exchange Oil Index added 1.7%.
As for chemical stocks,
Credit Suisse First Boston came out with a bullish report on the sector, which helped give those stocks a boost. The
S&P Chemical Index jumped 1.4%.
Meanwhile, the
Philadelphia Stock Exchange Gold and Silver Index rose 1.8%. The
Philadelphia Stock Exchange Forest & Paper Products Index advanced 1.4%.
Financials, which have been on a tear lately, were prominent losers. The
Philadelphia Stock Exchange/KBW Bank Index fell 2.3%, while the
American Stock Exchange Broker/Dealer Index shed 2%.
Breadth Goes From 'Terrible to Mediocre'
Philip Roth, chief technical analyst at Morgan Stanley Dean Witter, said the overbought tech sector was going through some profit-taking today.
The technician has been less than impressed with the market's breadth amid the recent rally. Roth said breadth has gone from "terrible to mediocre," during the advance, adding, "to say it's improved is a stretch."
Going forward, he said favorable seasonal factors will likely to come into play.
Once you mid-November passes, "that's when the bulk of tax selling is over," and the "market tends to lift after that," Roth said. As the market gets into December, the odds increase for profit-taking in stocks that have done well and bargain-hunting in stocks that have done poorly.
As for the bond market -- which has been cited as a primary fuel for the recent whopping upside in stocks -- the technician still sees bonds in a bear market with the recent "temporary" rally a "hiatus." Roth did say the bond could rally a bit more.
In
New York Stock Exchange trading, 851.3 million shares were exchanged while declining stocks beat advancers 1,708 to 1,306. On the Nasdaq, losers beat winners 2,114 to 1,887. New 52-week lows beat new highs 93 to 68 on the Big Board, while new highs beat new lows 215 to 85 in over-the-counter trading.
Among other indices, the
Dow Jones Transportation Average tumbled 41.80, or 1.4%, to 2989.41; the
Dow Jones Utility Average slumped 2.70, or 0.9%, to 299.48; and the
American Stock Exchange Composite Index rose 2.84, or 0.4%, to 812.31.
Elsewhere in North American equities, the
Toronto Stock Exchange 300 gained 4.75 to 7292.58 and the
Mexican Stock Exchange IPC Index lost 76.58 to 5867.38.
IMF's Camdessus Calls It Quits
Michel Camdessus, International Monetary Fund managing director, announced his resignation today. Camdessus, who has been serving as managing director for 13 years, plans to leave his position as early as mid-February, at which point a successor will be named. The resignation follows months of controversy surrounding the IMF and its role in the Asian crisis, Russian money laundering and the recent Ecuadorian default.
In his letter to the Executive Board, Camdessus tried to appear optimistic, citing personal reasons, not recent turmoil, as his motivation for leaving. His early departure cuts short his third five-year term as well as the longest stint ever for an IMF managing director.
--
Heather Bourbeau Tuesday's Company Report
By Tara Murphy
Staff Reporter (
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.)
Mergers, acquisitions and joint ventures
AT&T (T Quote) lost 1 13/16 to 45 11/16 despite saying it won a $125 million contract from CVS (CVS Quote) for voice and data services. Shares of CVS slipped 1/16 to 37 3/16. According to the transaction terms, AT&T Solutions would provide a connection between different CVS stores through its networking hardware and software. Cisco fell 1 1/16 to 74 1/4 after it said it will buy Aironet Wireless Communications in a deal valued at about $799 million. Shares of Aironet rose 2 1/16 to 45 3/8. Cisco says it expects a charge of between 3 cents and 8 cents a share from the merger. EDS (EDS Quote) gained 1 1/4 to 63 3/8 while Healtheon (HLTH Quote) fell 3 9/16, or 8.1%, to 40 1/4 after the companies said they will offer a Net-based service for health-care payers. First Consulting Group (FCGI Quote) rose 3/4, or 7.5%, to 10 3/4 after it signed a seven-year deal worth about $228 million to provide information technology and telecommunications services to New York-Presbyterian Hospital. Under the terms of the deal, FCG Management, a newly formed entity, will hire 432 employees of the hospital's current IT staff. Herbalife (HERBA Quote) fell 1 1/16, or 7.3%, to 13 5/8 after CEO Mark Hughes, who has offered to buy all outstanding shares of the company in a $500 million deal, extended his tender offer to Jan. 28. Monsanto (MTC Quote) gained 5/8 to 44 3/8 after The Wall Street Journal reported it held talks with Swiss drugmaker Novartis about a possible sale of all or part of the company. TheStreet.com/nytimes.com joint newsroom reported on the situation in a story today. Nortel Networks (NT Quote) fell 1 11/16 to 67 13/16 after it said it was slashing router prices and making Internet networking technology work with all types of systems. Nortel said it was allying with Intel to add elements of the new open Internet platform to Intel's Internet products. Oracle (ORCL Quote) fell 15/16 to 58 7/16 after it agreed to buy Carleton (CARL Quote) for $8.7 million in an effort to enhance its database software line. Oracle will pay Carleton about $2.45 a share in cash. Shares of Carleton slipped 7/32, or 9%, to 2 1/4. TheStreet.com Inc. (TSCM Quote), publisher of this Web site, rose 1 5/16, or 9.1%, to 15 13/16 and Donaldson Lufkin & Jenrette (DLJ Quote) fell 1 13/16 to 50 15/16 after saying it inked an agreement to offer TheStreet.com's financial news to clients of DLJ's Pershing unit. The transaction calls for Pershing to pay TheStreet.com for every customer who contacts the site. United Airlines, a unit of UAL (UAL Quote) said it will launch a travel portal with Delta Air Lines (DAL Quote) and Continental (CAL Quote). UAL dropped 3 1/4 to 64 9/16, Delta fell 1 11/16 and Continental lost 1 1/4 to 40 1/8. Warner-Lambert (WLA Quote) rose 2 3/16 to 90 1/16 after it reportedly sent a letter to Pfizer(PFE Quote) expressing its disappointment regarding legal proceedings brought on by Pfizer over Warner-Lambert's plans to link up with American Home Products (AHP Quote). Shares of Pfizer rose 7/16 to 35 1/16 while American Home Products fell 1 1/8 to 52 7/8. Warner-Lambert said that protracted litigation was not in stockholders' best interests and that it is causing "considerable uncertainty" in the markets. Earnings/revenue reports and previews
Ackerly Group (AK Quote) gained 1 1/16, or 6.2%, to 18 3/16 after it posted a third-quarter loss of 11 cents a share, narrower than the single-analyst estimate of a 15-cent loss and down from the year-ago 1-cent profit. Allied Waste (AW Quote) fell 1, or 9.8%, to 9 1/4 after it reported third-quarter earnings of 38 cents a share, excluding charges. The seven-analyst estimate called for earnings of 28 cents a share. Year-ago results were not available as the company said the figures aren't comparable because of an acquisition. Goldman Sachs cut its rating on Allied Waste to market performer from the recommended list. Capital Re (KRE Quote) fell 1/4 to 14 13/16 after it posted third-quarter operating earnings of 51 cents a share, in line with the single-analyst estimate, and up from a year-ago 40 cents a share. Dollar General (DG Quote) gained 3/16 to 25 7/16 after it reported third-quarter earnings of 19 cents a share, in line with the 14-analyst estimate and up from a year-ago 15 cents a share. Donna Karan (DK Quote) rose 5/8, or 7.7%, to 8 3/4 after posting third-quarter earnings of 46 cents a share, a penny better than the three-analyst estimate and up from a year-ago 35 cents a share. Equity Residential Properties (EQR Quote) inched up 1/8 to 41 3/4 after it reported third-quarter funds from operations of $1.13 a share, a penny better than the 18-analyst estimate and up from a year-ago $1.02 a share. Modis Professional Services (MPS Quote) fell 1 15/16, or 14.4%, to 11 9/16 after it reported third-quarter earnings of 30 cents a share, missing the 12-analyst estimate of 32 cents but up from the year-ago 19 cents. Modis said it sees disappointing fourth-quarter earnings of 15 cents to 18 cents a share, citing a slowdown of information technology projects ahead of the millennium. The 10-analyst estimate currently calls for earnings of 33 cents a share. Modis also said it was exploring strategic alternatives, including a spinoff or IPO of its information technology unit. Modis also said its board approved the repurchase of up to $65 million of common stock. Merrill Lynch cut its rating on Modis to neutral from accumulate. OfficeMax (OMX Quote) was unchanged at 6 3/8 after it reported third-quarter earnings of 14 cents a share, in line with the 14-analyst estimate but down from 27 cents a year ago. Olsten (OLS Quote) climbed 1/16 to 10 3/8 after reporting third-quarter earnings of 17 cents a share, a penny shy of the three-analyst estimate. Year-ago restated earnings were 14 cents a share. Overseas Shipping Group (OSG Quote) lost 1/16 to 13 11/16 after it posted third-quarter earnings of 9 cents a share, beating the single-analyst estimate of 7 cents, but down from a year-ago 14 cents. Polo Ralph Lauren (RL Quote) slipped 1/16 to 17 3/16 after it posted second-quarter earnings of 56 cents a share, in line with the 13-analyst estimate and up from a year-ago 48 cents a share. TheStreet.com/nytimes.com joint newsroom wrote about Ralph Lauren's and Donna Karan's earnings reports in a story today. Sunbeam (SOC Quote) climbed 1 5/16, or 29.2%, to 5 13/16 after it posted a third-quarter loss of 47 cents a share, wider than the two-analyst estimate of a loss of 30 cents a share, but down from a year-ago loss of $1.88 a share. Sunbeam said it would sell backpack division Eastpak and other nonessential assets, and expects to receive about $200 million in net proceeds, which will be used primarily to pay down debt. Trammel Crow (TCC Quote) rose 1/8 to 13 15/16 after it posted third-quarter earnings of 46 cents a share, beating the six-analyst estimate of 41 cents a share and up from the year-ago 39 cents a share. Wal-Mart (WMT Quote) fell 7/8 to 57 5/8 despite reporting third-quarter earnings of 29 cents a share, a penny better than the 17-analyst estimate and up from a year-ago 23 cents. The company said same-store sales for the period rose 7%, representing a 7.4% comparable increase at Wal-Mart stores and a 5.8% comparable increase at Sam's Club stores. Merrill Lynch added Wal-Mart to its Focus One list. TheStreet.com/nytimes.com joint newsroom covered Wal-Mart's earnings in a story today. Offerings and stock actions
Alpharma (ALO Quote) fell 2, or 6%, to 31 1/8 after it said it entered into an agreement with Bear Stearns to sell 2 million shares of its Class-A common stock. Celestica (CLS Quote) climbed 2 1/16 to 62 11/16 after it said it priced its public offering of 7 million subordinate voting shares at $60.625 per share for a total of $424.4 million. Lead managers are Morgan Stanley Dean Witter and RBC Dominion Securities. JDN Realty (JDN Quote) mounted 1/8 to 17 15/16 after it said it set a stock buyback for up to 3 million shares. | Company | Offering Price | Current Price | % Change |
| Charter Communications (CHTR Quote) | $19 | 22 3/4 | +19.4% |
| Data Critical (DCCA Quote) | $10 | 10 5/8 | +6.2% |
| KPNQwest (KQIP Quote) | $20.81 | 29 13/16 | +42.9% |
| Netzee (NETZ Quote) | $14 | 14 13/16 | +5.3% |
 |
Analysts actions
Banc of America Securities started coverage of Alberto-Culver (ACV Quote) with a market performer rating. Alberto Culver slid 9/16 to 23. Salomon Smith Barney sliced its rating on AmerUs Life Holdings (AMH Quote) to neutral from outperform. AmerUs Life Holdings lost 9/16 to 23 3/4. Salomon Smith Barney cut its rating on Apple (AAPL Quote) to outperform from buy based on valuation. Apple shares plummeted 6 3/4, or 7%, to 89 5/8. Morgan Stanley Dean Witter raised its rating on Clorox (CLX Quote) to a strong buy from outperform. Clorox shares hopped 2 13/16, or 6.9%, to 43 1/8. Morgan Stanley raised its price target for Cymer (CYMI Quote) to 55 from 45. Morgan Stanley also upped its price target on Applied Materials (AMAT Quote) to 125 from 86 a share. Shares of Cymer slipped 1 1/8 to 44 5/8, while Applied Materials jumped 2 1/4 to 99 7/16. Banc of America upgraded Columbia/HCA (COL Quote) and Tenet Healthcare (THC Quote) to buy from market performer. Columbia/HCA climbed 5/8 to 25 3/4, while Tenet Healthcare added 1/2 to 21 1/8. Credit Suisse First Boston raised its rating on DuPont (DD Quote) and PPG Industries (PPG Quote) to buy from hold. DuPont shares popped 13/16 to 61 3/8, while PPG Industries was unchanged at 58 11/16. Lehman Brothers started coverage of Franklin Resources (BEN Quote) at outperform and set a price target of 39. Franklin Resources gained 3/8 to 32. SG Cowen started coverage of Jacada (JCDA Quote) with a buy rating. Jacada retreated 2 1/16, or 6.5%, to 29 7/8. Prudential Securities upped its rating on Kulicke & Soffa Industries(KLIC Quote) to a strong buy from accumulate. Kulicke & Soffa climbed 3 1/4, or 9.3%, to 38 1/4. Bear Stearns initiated coverage of Network Solutions (NSOL Quote) with a buy rating and set a price target of 182. Network Solutions fell 1 to 148 1/8. Lehman Brothers upped its price target for Razorfish (RAZF Quote) to 85 from 75. Razorfish stumbled 1 3/4 to 70 1/8. Goldman Sachs raised its price target on Sandisk (SNDK Quote) to 80 from 60. Sandisk jumped 6 13/16, or 9.8%, to 76. SG Cowen initiated coverage of VerticalNet (VERT Quote) with buy rating and a price target of 150. VerticalNet soared 11 5/8, or 13.4%, to 98 3/4. Salomon Smith Barney started coverage of Women.com Networks (WOMN Quote) with a buy rating and a price target of 35. Women.com shares skidded 5/16 to 20. Miscellany
Amazon.com sank 7 3/16, or 9.2%, to 70 13/16 after it said it would launch four new stores on Nov. 10, including home improvement, software, video games and gift ideas. The company also said it acquired Tool Crib of the North, a tools and equipment catalog company. Banc of America Securities downgraded Amazon.com to market perform from buy, saying it believed the company's foray into additional categories could exacerbate certain issues it already faces. TheStreet.com/nytimes.com joint newsroom covered the Amazon news in a story today. Bradlees (BRAD Quote) popped 1/8 to 11 1/8 after its CEO said the company set a goal of opening four to six stores next year. A judge in Delaware ordered Computer Associates (CA Quote) to return about $550 million in stock to the company. The shares were improperly awarded as part of a controversial executive compensation package, according to plaintiffs' attorneys. Shares of Computer Associates climbed 1/16 to 58 11/16. Microsoft, whose stock is proving to be quite resilient amid a less-than-favorable legal opinion, said it is set to begin offering office software over the Internet. Microsoft stumbled 1 1/8 to 88 7/8. Newell Rubbermaid (NWL Quote) lost 3, or 8.6%, to 32 after TheStreet.com's Herb Greenberg raised questions about its accounting practices in a column this morning. Raytheon (RTN.B Quote) hopped 1/8 to 28 7/16 unveiled a new corporate structure that breaks up its defense electronics unit into four separate divisions that report directly to Chairman and CEO Daniel Burnham. Sigma-Aldrich (SIAL Quote) slid 1/8 to 28 11/16 after it named David Harvey as president and CEO, replacing Thomas Cori, who remains as chairman. The company said the changes are part of a planned succession. Sabre (TSG Quote) was unchanged at 43 after it said it would invest over $500 million in an expansion over the next several years. The company said it will expand its global data facilities and add up to 1,000 jobs over the next 10 years. Saks (SKS Quote) skidded 11/16 to 16 7/16 after it named Christina Johnson president and CEO of Saks Fifth Avenue. Standard & Poor's said Teradyne (TER Quote) will replace Case (CSE Quote) in the S&P 500 index after the close of trading Nov. 12. Case is being acquired by New Holland (NH Quote) for about $4.6 billion. CheckFree Holdings (CKFR Quote) will replace Teradyne in the S&P MidCap 400 index. Waste Management (WMI Quote) is expected to name A. Maurice Myers as its new CEO, the Journal reported. Myers, currently CEO of Yellow (YELL Quote), would be the sixth man to serve as CEO at Waste Management since May 1996, according to the Journal. Shares of Waste Management retreated 7/16 to 17 15/16. TheStreet.com/nytimes.com joint newsroom covered the news in a story today. The Heard on the Street column in the Journal said the Securities and Exchange Commission is examining why Chase Manhattan (CMB Quote) accumulated a discrepancy, which started at $40 billion, in an internal tracking system. However, the irregularity is not expected to affect Chase's reported financial results and no restatement of earnings is foreseen, the story said. Shares of Chase lost 1 5/16 to 83 1/16.
