Publish date:

daily03-14-00's DAILY BULLETIN

March 15, 2000

Market Data as of Close, 3/14/00:

o Dow Jones Industrial Average: 9,811.24 down 135.89, -1.37%

o Nasdaq Composite Index: 4,706.63 down 200.61, -4.09%

o S&P 500: 1,359.15 down 24.47, -1.77%

o TSC Internet: 1,273.43 down 19.54, -1.51%

o Russell 2000: 572.99 down 17.15, -2.91%

o 30-Year Treasury: 102 05/32 up 1 02/32, yield 6.106%

Companies in Today's Bulletin:

Yahoo! (YHOO:Nasdaq)

eBay (EBAY:Nasdaq)

Oracle (ORCL:Nasdaq)

Protein Design Labs (PDLI:Nasdaq)

Nortel Networks (NT:NYSE)

In Today's Bulletin:

o The Night Watch: The Night Watch: Yahoo! and eBay Talk and Oracle Flying After Earnings
o Wrong! Tactics and Strategies: Gazing Into the Crystal Ball
o Evening Update: Internet Biggies Chat and SOX Recap in Evening Action
o Bond Focus: Buyback Announcement Gives Treasuries a Lift Community

You know's the place for great market commentary, but did youknow it's also the place for intelligent investing discussion?

Check out Cramer's Latest board for insightful stock plays. Also, join theconversation in Jim Seymour's Tech Savvy, Gary B. Smith, Ben Holmes' IPOsand other commentary boards and share your thoughts about various aspectsof the market. As TSC's Investment Challenge began another round thisweek, share trading strategies with other competitors on the InvestmentChallenge message board.

TSC Message Boards:


"" on the Fox News Channel

Don't miss "" as guest Anthony Dwyer, chief market strategistat Kirlin Holdings, joins our panel of writers for this week's show.

"" is on Fox News Channel at 10 a.m. and 6 p.m. EST Saturdayand at 10 a.m. EST Sunday.

Also on

Online Brokers: NASD Panel Hits Datek With $100,000 Award in Investor Suit


attorney, an individual investor wins year-long execution case against online brokerage.

Networking: Nortel to Purchase Xros in $3.25 Billion Stock Deal

The move brings Nortel closer to throwing the switch on an all-optical network.

Market Roundup: Biotechs Blindside the Market; Dow and Nasdaq Flagged on the Play

The Comp posted its second-worst single-day performance.

Tech Savvy: Yahoo!'s Finance Play; Wireless Deals Abound

The week is hoppin' already. Seymour weighs in on the new developments.

The Night Watch: The Night Watch: Yahoo! and eBay Talk and Oracle Flying After Earnings


David A. Gaffen

Staff Reporter

3/14/00 8:06 PM ET

In after-hours action, the usual spate of small- and micro-caps were dominating the first few hours of trading. But tonight,


reported that conversations between two of the dominant names on the Internet could lead to a partnership, a joint venture or even an out-and-out merger.


reported that





(EBAY) - Get Report

were in discussions that could have far-flung implications on "Net World." On the news, eBay was soaring in after-hours trading by 24 to 235.

After the

Nasdaq Composite Index

's second-worst one-day selloff, the dedicated traders are out there in full force using their skills -- because, hey, they still gotta pay the bills.

The most active stock on Island trading is


(ORCL) - Get Report

. The software company beat the Street's estimates, earning 17 cents a share for its fiscal third quarter, compared with the First Call 30-broker consensus of 13 cents a share.

The stock, which, like nearly everything else today, closed down, was bursting in after-hours action, up 6 3/8 to 83 3/8 on 1.08 million Island shares.

Another stock doing well on earnings news was



, which was Verity, Verity, Verity Fine.

The vendor of information management software (as opposed to the hot dog vendor, or three-card-monte guy who takes all your money) completely obliterated analyst estimates for the third quarter. The company reported fiscal third-quarter earnings of 34 cents a share, compared with the five-analyst First Call consensus of 12 cents per share.

The stock, which was not among Instinet's top 10, was up 9 to 67 on 54,700 Instinet shares.

The second-most active stock on Island was

Century Casinos

(CNTY) - Get Report

, which is oddly rising on little news at all. Sure, the company said it was holding its quarterly conference call Thursday, but released an earnings report last week, making the activity a bit strange.

The company owns Womacks Casino in Cripple Creek, Colo., as well as the Millennium Casino in Prague, which probably needs a new theme right about now.

The stock is up 5/16 to 2 3/16 on 873,000 Island shares. Company officials didn't return a call.

To talk about a company named



, we could use the assistance of the late, great, wrestler-announcer Gorilla Monsoon.


McKessonHBOC Medical Group

(a division of McKesson HBOC

(MCK) - Get Report

), from Richmond, Va., weight unknown, will tag-team with Bio-Plexus of Vernon, Conn., weight unknown, in a tag-team match to distribute products and hit their opponents in the solar plexus and the lower lumbar region."

The stock was up 3/32 to 4 11/32 on 479,000 Island shares.



, meanwhile, did make an announcement, one of those that's generally a guarantee to get somebody cheering.

The company, a reseller of

Sun Microsystems


products, said it's forming

Merisel Open Computing Alliance

, which is going to operate as a separate entity.

The stock rose 5/32 to 2 11/16 on 446,000 Island shares.

This information is provided by Instinet, a wholly owned subsidiary of Reuters (RTRSY) . For further information, please contact Instinet at

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EST.


MarketXT, formerly Eclipse Trading, offers after-hours trading to retail clients of Morgan Stanley Dean Witter's (MWD) Morgan Stanley Dean Witter Online, Mellon Bank's (MEL) Dreyfus Brokerage Services and clients of Salomon Smith Barney. It is also available to clients of, CyBerCorp and Interactive Brokers. Clients can trade 200 of the most actively traded New York Stock Exchange and Nasdaq Stock Market issues, 4:30 p.m. to 8 p.m. EST Monday through Thursday.


explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.

Wrong! Tactics and Strategies: Gazing Into the Crystal Ball


James J. Cramer

3/14/00 6:04 PM ET

Looks like I picked the wrong day to chaperone the

Liberty Science Center

kindergarten field trip.

Today's session was plum ugly and had all of the appearances of forced selling at the end of the day.

I came in near the low -- which means I came in at the end of the day -- and felt the call was to buy them, betting that


(ORCL) - Get Report

could turn things around tomorrow.

Right now, Oracle is doing its part. It is trading up nicely -- but I don't know if the sell program/margin-selling finished. We don't know if we were finished with the selling we did, only measured buying. That means 5,000 shares of

Texas Instruments

(TXN) - Get Report

every 5 points for us.

And we trimmed some of our recent buys that we had less conviction over and booted some stock that we had from recent secondaries. We used that capital to put to work in our favorite names, many of which were part of the carnage.

Now it is on to the Oracle conference call.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long Oracle and Texas Instruments. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

Evening Update: Internet Biggies Chat and SOX Recap in Evening Action


Tara Murphy

Staff Reporter

3/14/00 7:47 PM ET


(ORCL) - Get Report

posted third-quarter earnings of 17 cents a share, beating the 31-analyst estimate of 13 cents and up from the year-ago 9 cent-profit. The software maker said that sales increased 18% to $2.45 billion from $2.08 billion. Oracle said it was able to slash costs by $1 billion through the efficient use of its own database software.

"The numbers were incredible," said Brian Gilmartin, portfolio manager at

Trinity Asset Management

. "They have a niche that is going to be bullet proof, capturing the middle-market of thee-commerce one-stop shopping product by wrapping everything around the Internet. This has made it easier for companies to adopt the Internet as a business tool."





(EBAY) - Get Report

are negotiating a possible pact or merger, reported on


, citing people familiar with the matter.

According to CNBC, there is a 50-50 chance for a pact between the two Internet giants, with a "significantly" smaller chance that Yahoo would wholly acquire eBay. CNBC reported that sources said negotiations heated after

TheStreet Recommends

America Online


said it would buy

Time Warner


but that no definitive agreement has been set.

"It makes a lot of sense," said a research assistant at a major brokerage house. "When you get to Yahoo! you see their shopping service, but the shopping experience is just a transfer of what you do at the mall. Yahoo! has been a web-oriented service and eBay fits exactly into that philosophy. It just flows."

Yahoo! would not comment for this story.

Ryan Alexander, vice president of equity research with

Wit SoundView

also saw some merit to an alliance between the two Internet superpowers.

"Given that they are two dominant brands in the Internet landscape, having the ability to leverage each other's user base could make a tremendous amount of sense," Alexander said.

Another Sign of Excess?
The Federal Reserve, which looks at rising margin debt as a sign of markets getting out of hand, won't be pleased to see the latest figures from the New York Stock Exchange, released on Tuesday. They show total margin debt at the end of February stood at $265 billion. What is doubly troubling -- for those who worry about such things--is that the rate of margin growth is outstripping the rise in the markets.

Source: New York Stock Exchange, Baseline.

SOX Suffers

Among the stocks most hammered by Tuesday's technology stock sell-off were semiconductors. The usually unstoppable

Philadelphia Semiconductor Index

, known as the SOX, dropped 86.26 points to close at 1229.84, a 6.6% drop for the day.

The biggest drops came with the stocks that have been the chip stars over the past year: Networking and cable modem chipmaker


fell 29 1/16, or 13%, to 200 15/16; computer interface chipmaker



fell 21 5/8, or 13%, to 148; optical chipmaker

Applied Micro Circuits


fell 28 1/16, or 10%, to 253 and

Analog Devices

(ADI) - Get Report

fell 19 3/4, or 12%, to 145 1/4.

About the only company to gain Tuesday was flash memory maker



. Its shares rose 14 1/2, or 12%, to close at 139 1/2 on an upgrade from

Merrill Lynch

from accumulate to buy based on a shortage of flash memory chips for cell phones.

Credit Suisse First Boston

analyst Charlie Glavin says he's not worried by the selloff in the sector, and said the stocks should bounce back. "The fundamentals are still strong," he says. Even with the drop, the SOX is still up about 75% for the year.


Marcy Burstiner

In other postclose news (earnings estimates from

First Call/Thomson Financial

; earnings reported on a diluted basis unless otherwise specified):

Mergers, acquisitions and joint ventures

HNC Software


said it has agreed to purchase closely held

Onyx Technologies

for roughly 383,000 shares and $1.5 million in cash.

Brooks Automation

(BRKS) - Get Report

said that it has entered a multi-million dollar deal with

Silterra Malaysia

to gain access to the Malaysian semiconductor market.

Earnings/revenue reports



, the food and drug retailing giant, posted earnings of 73 cents a share, excluding merger-related costs, 3 cents ahead of the 16-analyst estimate.

Looking ahead, however, the retailer warned it expects earnings before merger-related costs will be 53 cents a share in the first quarter -- below the current seven-analyst estimate of 57 cents. The company said it expects earnings of 62 cents in the second quarter, which is in line with the seven-analyst estimate.

Hot Topic


reported fourth-quarter earnings of 72 cents a share, beating the four-analyst estimate of 66 cents and up from the year-ago 39 cent-profit.


(KEM) - Get Report

said it would post fourth-quarter earnings 40% to 45% higher than the eight-analyst estimate of 52 cents a share. The company attributed the solid results to strong demand and lower costs.

Premier Parks


reported a fourth-quarter loss of $1.22 a share, wider than the seven-analyst estimate of a loss of $1.15 and the year-ago $1 loss.

Ravisent Technologies


said it has revised its second and third quarter results after accounting regulations associated with revenue recognition for future contract delivery were misinterpreted. Two transactions will second-quarter revenues by $3.3 million. The revision widened the second-quarter loss to 43 cents from 16 cents and cut its third-quarter profit to 3 cents from 6 cents.

For the fourth quarter, the company posted a loss of 12 cents a share, missing the two-analyst estimate of a 7-cent profit but narrower than the year-ago 36 cent-loss.



reported fourth-quarter earnings of 98 cents a share, in line with the 18-analyst estimate and up from the year-ago 97 cent-profit.

Tyson Foods

(TSN) - Get Report

warned investors that it would report second-quarter earnings between 14 cents to 16 cents a share, greatly below the 12-analyst estimate of 27 cents a share. The company blamed the shortfall on slow domestic market conditions and weather-related losses.

AmeriServe Food Distribution's

bankruptcy also hurt Tyson, which is a supplier to several of AmeriServe's customers.



reported third-quarter earnings of 34 cents a share, which reflects November's 2-for-1 stock split. The five-analyst estimate expected the company to post a 12-cent profit, in line with year-ago report.

Offerings and stock actions

Robertson Stephens

priced a 4.5 million-share IPO for



above its expected ranged of $13 to $15 at $16 a share.

For a look into this evening's after-hours trading action, please check out's

The Night Watch.

Staff Reporter Brian Louis contributed to this story.

Bond Focus: Buyback Announcement Gives Treasuries a Lift


Elizabeth Roy

Senior Writer

3/14/00 4:48 PM ET

Thanks mainly to an announcement by the Treasury Department that it wants to buy $1 billion worth of its securities from investors on Thursday, the Treasury market rallied strongly today, dropping the benchmark 10-year note's yield to its lowest level in nearly three months.

Falling oil and stock prices helped the rally along, as did short-covering, market analysts said. But the market's strong performance so far this week makes it vulnerable in the event that inflation data due out Thursday and Friday are stronger than expected, one said.

The 10-year Treasury note, which traded down as much as 9/32 at 8:30 a.m. EST, ended up 18/32 at 101 16/32, trimming its yield 7.6 basis points to 6.294%, its best closing yield since Dec. 18. The 30-year Treasury bond rose 31/32 to 102 2/32, trimming its yield 7 basis points to 6.099%, its best close since Feb. 22.

At the

Chicago Board of Trade

, the June

Treasury futures contract gained 22/32 to 95 1/32.

Early in the session, Treasury prices reacted well to the February

retail sales

report, which was strong, but in some respects not as strong as people feared it might be.

Overall retail sales, which had been forecast to rise 1.0% by economists polled by


, rose 1.1%, the largest increase since December. The biggest boost came from gasoline sales, which rose 4.3% as prices went up. The year-on-year pace of retail sales growth hit 13.9%, the fastest pace in at least 10 years.

Excluding autos, which sold at a record high pace for the current expansion in February, retail sales rose 1.0%, compared with an average forecast of 0.6%.

But the bond market was comforted by the fact that the results for January weren't revised up by large amounts, as many economists predicted would happen. The January gain was revised from 0.3% to 0.4%. Excluding autos, a 0.3% drop was revised to a 0.5% decline.

Then came the buyback announcement, which had been expected by the end of the month, but not necessarily today.

Last Thursday, the department bought $1 billion of securities from investors in its first such operation in 70 years. This Thursday, the department announced, it will target 30-year bonds issued between 1988 and 1991.

The buyback program, which the Treasury has said will take up to $30 billion of long-maturity issues out of circulation this year, is one of the ways it is dealing with the federal budget surplus, which reduces its need to borrow. By buying back old issues while continuing to issue new ones, the department helps maintain the liquidity of its securities.

The market rallied as much as it did today in part because the buyback announcement had an element of surprise,

Morgan Stanley Dean Witter

money-market economist Kevin Flanagan said. Also, short-covering by people who expected Treasuries to give up some ground in response to either a more stable stock market or the inflation data due out Thursday and Friday, accounted for part of the move, market analysts said.

As a result, Treasury prices could fall harder now if the inflation data -- the



Consumer Price Indices

are very strong, said Josh Stiles, senior bond strategist at

. "We cannot presume we're immune to strong inflation numbers," he said. If Treasury investors "see the data and don't like it, a billion of buybacks could be dwarfed by their selling."

Economic Indicators

Also today, the

BTM/Schroder Weekly Chain Store Sales Index

rose 0.4%, its largest gain in four weeks. But the year-on-year pace fell from 2.5% to 2.4%, the lowest since December 1997.


Redbook Retail Average

showed that sales during the first two weeks of March were even with the full month of February, relative to expectations for a 0.2% decline.

Currency and Commodities

The dollar weakened against the yen and the euro. It lately was worth 105.01 yen, down from 105.64 yesterday. The euro was worth $0.9674, up from $0.9645. For more on currencies, please take a look at



Currency Watch column.

Crude oil for April delivery at the

New York Mercantile Exchange

fell to $31.60 a barrel from $32.02.


Bridge Commodity Research Bureau Index

rose to 216.25 from 215.93.

Gold for April delivery at the


fell to $289.70 an ounce from $291.50.

To view TSC's economic databank, see:

James J. Cramer will be chatting on Yahoo! at 5 p.m. ET. Register for Yahoo!Chat at: It's free!

Copyright 2000,