daily04-03-00

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TheStreet.com's DAILY BULLETIN

April 4, 2000

http://www.thestreet.com

Market Data as of Close, 4/3/00:

o Dow Jones Industrial Average: 11,221.93 up 300.01, 2.75%

o Nasdaq Composite Index: 4,223.68 down 349.15, -7.64%

o S&P 500: 1,505.97 up 7.39, 0.49%

o TSC Internet: 998.41 down 108.66, -9.82%

o Russell 2000: 516.04 down 23.05, -4.28%

o 30-Year Treasury: 105 25/32 unchanged , yield 5.825%

Companies in Today's Bulletin:

Microsoft (MSFT:Nasdaq)

Red Hat (RHAT:Nasdaq)

American National Can (CAN:NYSE)

Skechers U.S.A.(SKS:NYSE)

Legato Systems (LGTO:Nasdaq)

In Today's Bulletin:

o Briefing Room: Microsoft Edges Higher After Hours Despite Ruling
o Smarter Money: Shirts Were Lost Today, but Tomorrow It'll Be Pants
o Evening Update: Evening Update: Microsoft and More
o Bond Focus: Rally Takes 10-Year Yield Under 6%
o Nothing but Net: Net Sector Slumps as Microsoft Gets Hammered

Also on TheStreet.com:

Consumer Products: Nabisco Rejects Carl Icahn's Bid as 'Inadequate'

Icahn has said that if he gained control of Nabisco, he would consider a sale of the company.

http://www.thestreet.com/brknews/consumer/912268.html

Nothing but Net: DOT Closes Below 1000 for First Time Since December

While most eyes are on Microsoft, a continuation of last week's selling sees traders continuing to bail from positions.

http://www.thestreet.com/markets/techupdate/912288.html

Brokerages/Wall Street: Charles Schwab Expects Higher First-Quarter Earnings

Schwab reported earnings of $143 million, or 17 cents per share, in the same period a year ago.

http://www.thestreet.com/brknews/brokerages/911904.html

Mutual Funds: Flood of Assets Pushes Fidelity Biotech Fund Into Uncharted Territory

Can the fund absorb billions in new cash and continue to perform?

http://www.thestreet.com/funds/funds/910774.html

Wrong! Tactics and Strategies: We Are Not Out of the Woods Yet

The problem for Nasdaq stocks is not weak earnings -- rather, it is too much supply.

http://www.thestreet.com/comment/wrongtactics/912256.html

Options Buzz: Heading Margins Off at the Pass

Will attempts to tighten margin requirements prevent a correction from turning into a nightmare?

http://www.thestreet.com/stocks/optionsbuzz/912421.html

Software: Reactions on Microsoft Decision Vary Greatly

"I think they should impeach Judge Jackson," said John Puricelli, an analyst at A.G. Edwards & Sons.

http://www.thestreet.com/brknews/software/912286.html

Briefing Room: Microsoft Edges Higher After Hours Despite Ruling

By

TSC Staff

4/3/00 4:40 PM ET By Eileen Kinsella
Staff Reporter

A federal judge ruled that

Microsoft

(MSFT) - Get Report

broke federal antitrust law by abusing its monopoly in PC operating systems. Judge Thomas Penfield Jackson said the software maker violated key parts of the

Sherman Antitrust Act. The finding will lead to consideration of penalties, including a possible breakup of the company.

Microsoft said it would eventually appeal the judge's ruling and expressed confidence that it would prevail in the case. Earlier today, the stock fell sharply on news that settlement talks in the antitrust case had

ended this past weekend. After the close, the stock ticked higher on

Instinet

, up 2 3/64 to 92 59/64.

For more details on the decision, see separate

coverage from the

TheStreet.com/NYTimes.com

joint newsroom.

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified

.)

Amcol International

(ACO)

warned it sees first-quarter earnings below expectations, citing higher acrylic costs and a drop in absorbent polymer sales. The company said it expected earnings to be flat with the year-ago results, or 34% below the single-analyst estimate of 32 cents a share.

BindView

(BVEW)

said it sees a first-quarter loss of 2 cents to 4 cents a share, excluding charges. The eight-analyst expectation was for the company to break even. BindView attributed the shortfall to general softness in the company's international performance.

Metron Technology

(MTCH) - Get Report

reported third-quarter earnings of 18 cents a share, beating the three-analyst estimate of 16 cents. The year-ago loss of 18 cents a share included items.

Remedy

(RMDY)

said it sees first-quarter earnings above 18 cents a share, excluding goodwill costs. The five-analyst estimate currently calls for 16 cents a share. Remedy said it will merge its global sales and service management groups.

--

Eileen Kinsella

WestPoint Stevens

(WXS)

said it postponed its May 10 annual shareholder meeting to prepare for a special meeting at which shareholders will vote on the company's recapitalization plan.

--

Eileen Kinsella

A federal judge ruled that

Microsoft

(MSFT) - Get Report

broke federal antitrust law by abusing its monopoly in PC operating systems. Judge Thomas Penfield Jackson said the software maker violated key parts of the

Sherman Antitrust Act. The finding will lead to consideration of penalties, including a possible breakup of the company.

Microsoft said it would eventually appeal the judge's ruling and expressed confidence that it would prevail in the case. Earlier today, the stock fell sharply on news that settlement talks in the antitrust case had

ended this past weekend. After the close, the stock ticked higher on

Instinet

, up 2 3/64 to 92 59/64.

For more details on the decision, see separate

coverage from the

TheStreet.com/NYTimes.com

joint newsroom.

--

Eileen Kinsella

Smarter Money: Shirts Were Lost Today, but Tomorrow It'll Be Pants

By

James J. Cramer

4/3/00 5:25 PM ET

Study your funds tomorrow. Hit up the symbols and take a hard look. If you are an optimist, you probably want to cut that 401k check a little early this year. Because today was the day when fund managers lost their shirts and tomorrow, if this

Microsoft

(MSFT) - Get Report

thing is as bad as everybody thinks, tomorrow is the day they will lose their pants.

If you took something off the table when I

wrote endlessly about it, it probably makes sense to put some money back to work tomorrow.

I don't know if the

NDX

is going to bottom tomorrow, the next day or the next month, but today was one of those days where you got a massive shakeout, a mini-crash, where a lot of good stuff got shot with the bad.

Nobody ever knows what the right time to commit money is, but this is surely a better time than any other this year.

I am a professional money manager trying hard to keep losses to a minimum and make maximum gains. I don't think that today was that important; some of the real fluff names have more to fall. But if I didn't have anything in, or if I took a lot off the table, tomorrow may be the best day to put some long-term money to work.

What makes me more confident than usual is that Microsoft represents the largest holding for many funds, and tomorrow should be about as bad as it gets for Mister Softee -- as it will now appeal the ruling forever and the stock should stabilize somewhere in the 80s, where it bottomed when the judge indicated he would do exactly what he did just now.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Microsoft. 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

jjcletters@thestreet.com.

Evening Update: Evening Update: Microsoft and More

By

Eileen Kinsella

Staff Reporter

4/3/00 7:33 PM ET

A federal judge ruled that

Microsoft

(MSFT) - Get Report

broke federal antitrust law by abusing its monopoly in PC operating systems. Judge Thomas Penfield Jackson said the software maker violated key parts of the

Sherman Antitrust Act. The finding will lead to consideration of penalties, including a possible breakup of the company.

Microsoft said it would eventually appeal the judge's ruling and expressed confidence that it would prevail in the case. Earlier today, the stock fell sharply on news that settlement talks in the antitrust case had

ended this past weekend. After the close, the stock ticked higher on

Instinet

, up 2 3/64 to 92 59/64.

For more details on the decision, see separate

coverage from the

TheStreet.com/NYTimes.com

joint newsroom.

In other postclose news (

earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified

):

Earnings/revenue reports and previews

Amcol International

(ACO)

warned it sees first-quarter earnings below expectations, citing higher acrylic costs and a drop in absorbent polymer sales. The company said it expected earnings to be flat with the year-ago results, or 34% below the single-analyst estimate of 32 cents a share.

BindView

(BVEW)

said it sees a first-quarter loss of 2 cents to 4 cents a share, excluding charges. The eight-analyst expectation was for the company to break even. BindView attributed the shortfall to general softness in the company's international performance.

Metron Technology

(MTCH) - Get Report

reported third-quarter earnings of 18 cents a share, beating the three-analyst estimate of 16 cents. The year-ago loss of 18 cents a share included items.

Remedy

(RMDY)

said it sees first-quarter earnings above 18 cents a share, excluding goodwill costs. The five-analyst estimate currently calls for 16 cents a share. Remedy said it will merge its global sales and service management groups.

Offerings and stock actions

WestPoint Stevens

(WXS)

said it postponed its May 10 annual shareholder meeting to prepare for a special meeting at which shareholders will vote on the company's recapitalization plan.

Bond Focus: Rally Takes 10-Year Yield Under 6%

By

Elizabeth Roy

Senior Writer

4/3/00 5:56 PM ET

Two strong economic reports got the Treasury market down early in the session, but prices ultimately ended higher thanks to the plunging

Nasdaq

.

The move sent the longest-term yields lower for the sixth session in a row, to new lows for the year. The five-year note yield also made a new low for the year. Even the two-year note, which refuses to come down very much as long as the

Fed

is in rate-hiking mode, rallied to its lowest yield in over a month.

Plummeting tech-stock prices lifted Treasury prices by sending money their way, and also by holding out hope that the long-awaited economic slowdown is finally on its way.

This rally came in spite of the fact that the

Dow Jones Industrial Average

rallied hugely,

Stone & McCarthy Research Associates

Treasury market analyst John Canavan said, because the Nasdaq is putting on the more interesting show. Today's move by the Nasdaq took the high-tech index even further in the direction it has taken since mid-March, and to the lowest level since Feb. 3. Meanwhile, the Dow is still below its Jan. 14 high for the year.

Rather than consistently taking cues from one stock index in particular, the Treasury market "is most concerned with any particular index that's doing anything unusual," Canavan said. The Nasdaq Comp's 800-point drop since March 10 is what stands out, "so for now, that's what's getting the attention."

The benchmark 10-year Treasury note finished 7/32 higher at 103 28/32, dropping its yield 2.9 basis points to 5.973%, the lowest since Nov. 16. The 30-year Treasury bond gained 10/32 to 106 7/32, trimming its yield 2.1 basis points to 5.810%, the lowest since May 26. And the two-year note gained 3/32 to 100 4/32, lowering its yield 5.2 basis points to 6.431%, the lowest since Feb. 26.

At the

Chicago Board of Trade

, the June

Treasury futures contract finished up 4/32 at 97 26/32.

But early in the session, the 10-year note traded down as much as 8/32 after the 10 a.m. EDT release of the

Purchasing Managers' Index

for March and the

construction spending

report for February.

The Purchasing Managers' Index fell to 55.8, its lowest level since August, from 56.9 in February. An unchanged reading had been forecast by economists polled by

Reuters

. But a subindex measuring prices paid by manufacturers rose from 74.1 to 79.8, the highest since February 1995.

Reaction to that news might have been even sharper had oil prices not come way down over the last month, said Martin Mauro, senior economist at

Merrill Lynch

. Oil breached the $30-a-barrel mark in early March, a nine-year high, but closed today near a three-month low. That should ease pricing pressures on manufacturers in subsequent months, the reasoning goes.

Meanwhile, construction spending rose 1.5% in February vs. an average forecast that they would fall 0.3%. The year-on-year pace of construction spending rose from 7.2% in January to 7.9%, the fastest since March 1999. Although construction spending is difficult to forecast and subject to large revisions (not to mention contingent upon the weather), the rising rate "is little comfort to the Fed, which had hoped that higher interest rates would curb construction spending and help usher in a period of more moderate growth,"

First Union

economist Mark Vitner wrote in a comment on the report.

Currency and Commodities

The dollar gained against the yen and the euro. It lately was worth 104.78 yen, up from 102.80. The euro was worth $0.9550, down from $0.9650. For more on currencies, please take a look at

TSC's

new

Currency Watch column.

Crude oil for May delivery at the

New York Mercantile Exchange

fell to $26.43 a barrel from $26.90.

The

Bridge Commodity Research Bureau Index

fell to 212.48 from 213.43.

Gold for April delivery at the

Comex

fell to $280.40 an ounce from $281.40. To view TSC's Economic Databank, see: http://www.thestreet.com/markets/databank/908883.html

Nothing but Net: Net Sector Slumps as Microsoft Gets Hammered

By

David Shabelman

Staff Reporter

4/3/00 3:03 PM ET What appeared to be the end of the tech-sector slaughter on Friday now appears to be nothing more than a tease.

Led by a sharp loss in

Microsoft

(MSFT) - Get Report

, the

Nasdaq

was headed for one of its worst point losses, and selling had shown few signs of slowing. In recent trading, the Nasdaq was down 244.50, or 5.4%, at 4328.33. Internet stocks were also being caught in the downdraft.

TheStreet.com Internet Sector

index was down 64.87, or 5.7%, at 1042.20.

TheStreet.com New Tech 30 was down 65.72, or 8.9%, at 674.67. Microsoft was off 14 3/8, or 13%, at 91 7/8 after settlement talks with the government in its antitrust case fell apart.

Sam Tobias, trader with

Circle T

hedge fund, said he did not think that Microsoft was responsible for the tech sector collapse. He said even though tech had a nice relief rally late Friday, it was more window dressing than anything else ahead of the quarter end. He added when most overseas markets were lower and there was no indication of follow-through traders bailed from long positions.

According to Tobias, the sector was in a no-mans land this week, beyond pre-earnings announcements, but ahead of earnings reports, which don't begin until next week. He said the tech sector would need to see some positive earnings before it can put in a bottom. Until then, he said he was buying some of his favorites on the way down, to reduce the average cost on some of the stocks that have gone along for the ride, though he would not divulge what they were.

We focused on technical factors last

week, and they were coming in to play again today. The Nasdaq has fallen below its low of 4355.69 from March 30, trading today as low as 4296.06. A close below 4296.06 would suggest further technical losses. The Comp found support just ahead of the 4291 low from Feb. 22 and Feb. 15.

Losses were widespread and included virtually all subsectors of the Net. Among traditional Net names,

Yahoo!

(YHOO)

was down 9, or 5.3%, to 162 3/8;

Amazon.com

(AMZN) - Get Report

was off 4 1/2, or 6.7%, to 62 1/2;

eBay

(EBAY) - Get Report

was down 17 3/4, or 10%, to 158 1/4; and

priceline.com

(PCLN)

was down 7 9/16, or 9.5%, to 72 7/16.

Business-to-business plays also were getting hammered.

Ariba

(ARBA)

was down 8 1/4, or 8%, to 96 9/16;

VerticalNet

(VERT)

was down 7, or 10%, to 61;

724 Solutions

(SVNX)

was down 27 1/2, or 22%, to 97;

FreeMarkets

(FMKT)

was off 14 3/4, or 12%, to 106 1/4 and

i2 Technologies

(ITWO)

had tumbled 16 13/16, or 14%, to 105 5/16.

Join TSC tax columnist Tracy Byrnes and Martin Nissenbaum, national director of personal income-tax planning at Ernst & Young, for an hour-long discussion on tax planning and e-filing on Yahoo! at 5 p.m. EDT, Tuesday, April 4. Register for Yahoo! Chat at: chat.yahoo.com. It's free!

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