After a Bumpy Day, Stocks End Higher

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Recovering smartly from early weakness, equity indices bounded into positive territory at midafternoon and finished the day on the upside.

At 2 p.m. EST, the

Dow Jones Industrial Average

was down 30 to 7984 and the tech-flushed

Nasdaq Composite Index

was down 12 to 1594, both measures getting trampled by a herd of high-tech companies that warned of disappointing earnings. But stocks already were off their session lows, and a combination of factors united to send them even higher.

"A couple of stocks were upgraded at midday,

Sun Micro

and

AOL

," said Warren Epstein, head trader at

Richard A. Rosenblatt

.

Prudential Securities

upgraded Sun Microsystems

(SUNW) - Get Report

to buy from hold and earlier did the same to America Online

(AOL)

. (Today's

Options Buzz highlighted activity in Sun Micro.)

"The Nasdaq started to turn," Epstein went on. "

Dell Computer

turned flat,

Microsoft

turned flat, and they just started to run. Also, the

Federal Reserve's

Beige Book was received well, the bond is right around 6%."

The Dow jumped as much as 57.19 to 8076.02 before weakening near the close, still finishing up 13.18 to 8032.01. The Nasdaq fared better, finishing on its highs of the day with a gain of 8.76 to 1615.13. Dell

(DELL) - Get Report

, down 1 to 87 1/4 earlier, rose 3 3/8 to 91 11/16. Microsoft

(MSFT) - Get Report

, off 1 3/16 to 141 earlier, rose 2 1/2 to 144 11/16. The broad

S&P 500

gained 5.09 to 976.77 and the small-cap

Russell 2000

advanced 1.33 to 433.81.

The Fed's Beige Book, an anecdotal economic review issued eight times a year by the 12 district banks, contained its usual soothing porridge of unsurprising observations: a "continued moderate pace of economic growth," good inventories, tight labor markets, optimistic retailers. That thrilled a certainty-starved marketplace, although bonds responded little as traders squared off against the stubborn 6% long-bond yield level. The bellwether 30-year Treasury bond gained 5/32 to 101 14/32 in price, the yield easing to 6.02% -- up from a nearly two-year low of 6.007%, reached earlier.

Peter Green, director of technical research at

Gruntal

, said the fixed-income mattress should offer firm support for stocks as they bounce toward the new year. "The yield is very oversold, meaning bonds are overbought, but there's no negative divergence to take them lower," Green said. "The only caveat is, I'd like to see the small stocks kick in." From Oct. 27 through yesterday, according to the

Baseline

data tracker, the Dow is up 12%, the S&P 500 is up 11% and the Russell 2000 is up just 3%.

As for the battered technology sector, said Green, "my bellwethers are

Applied Materials

(AMAT) - Get Report

AMAT,

Texas Instruments

(TXN) - Get Report

TXN and

Intel

(INTC) - Get Report

INTC. I'm watching those stocks. Those stocks are at support. If they break support, then all bets will be off." Today, AMAT slipped 1/8 to 33 1/16, TXN moved up 1/4 to 46 3/4 and INTC added 3/8 to 78 3/8.

Market internals reflected the continuing weakness of the high-tech side. Nasdaq decliners outnumbered advancers by 2,401 to 2,071 on a healthy 729.8 million shares. New Nasdaq lows continued to top new highs, leading by 197 to 158. On the

New York Stock Exchange

, 1,642 advancers beat 1,251 decliners on 634.5 million shares. New Big Board highs kept up their wide lead over new lows, leading by 205 to 47.

Wednesday's market action

(earnings estimates from

First Call

; new highs and lows on a closing basis unless otherwise specified):

Anchor Gaming

(SLOT)

was the subject of a negative

Wall Street Journal

article -- but despite wire reports to the contrary, the story wasn't solely responsible for the stock's plunge of 11 3/4, or 15.5%, to 64 1/4 before its 2:55 p.m. halt for news pending. The

Journal

rehashed months-old news of large insider stock sales (reported

Sept. 2 and

Sept. 30 in

TheStreet.com

), but the real story was the chatter late yesterday and today that Anchor might miss second-quarter earnings estimates. Anchor stock never reopened, and the company said it would issue a release this afternoon.

TheStreet.com

reported the

story earlier this afternoon.

Able Telcom Holding

(ABTE)

jumped 1 7/16, or 17.4%, to 9 11/16 after it received an unsolicited, $12-per-share offer from

Applied Cellular

(ACTC)

. Applied rose 3/32 to 6.

Zeigler Coal Holding

(ZEI)

leapt 2 3/8, or 15.5%, to 17 3/4 after saying it will retain an investment bank to explore alternatives including the sale of the company.

E*Trade Group

(EGRP)

slid 2 5/16, or 9.8%, to 21 1/4 after saying its new-customer growth rate slowed in November and its average trades per customer dipped. Rival online brokerage

AmeriTrade Holding

(AMTD) - Get Report

fell 4 1/4, or 12%, to 31 1/4.

3Com

(COMS)

recovered from a deep midday deficit for a loss of just 7/16 to 34 15/16. The company said late yesterday that it expects to report only a "slight" second-quarter profit, missing the 33-analyst consensus estimate of 43 cents per share, versus the year-earlier 50 cents. Other networkers enjoying a similar reversal of stock-market fortunes today included

Ascend

(ASND) - Get Report

, down just 1/8 to 23 5/8,

Cisco

(CSCO) - Get Report

, up 3/8 to 86 29/32, and especially

Bay Networks

(BAY)

, up 1 3/16 to 28 15/16. Not getting a midday boost were

Newbridge Networks

(NN)

, down 1 15/16 to 43 1/8, and

Cabletron Systems

(CS) - Get Report

, down 3/4 to a five-year low of 14 15/16.

Circuit board and connector companies were sharply lower on concerns about the health of networkers, some of their biggest clients.

Solectron

(SLR)

lost 4 7/16, or 11.8%, to 33 5/16,

Micrel

(MCRL)

lost 3 3/4, or 10.3%, to 33,

Jabil Circuit

(JBIL)

lost 4, or 8.6%, to 42 9/16,

Anadigics

(ANAD)

lost 2 5/8, or 8.5%, to 28 3/8 and the comparatively unscathed

Hadco

(HDCO)

lost 1 5/8, or 2.8%, to 56 11/16.

AT&T

(T) - Get Report

ascended 13/16 to an all-time high of 57 1/8 on a

Wall Street Journal

report that new Chairman and CEO C. Michael Armstrong is planning an aggressive program of cost-cutting and targeted investments. Other telecom-services standouts headed higher as well, with

MCI

(MCIC)

up 5/16 to an all-time high of 44 5/8,

Sprint

(FON)

up 1 1/8 to 59 and

Ameritech

(AIT) - Get Report

up 3 to an all-time high of 80 1/16.

Nokia

(NOKA)

declined 2 1/16 to 75 3/8 after

BancAmerica Robertson Stephens

lowered its 1998 earnings estimates on the Finnish wireless-telecom giant. The loss came despite

Bear Stearns'

reiteration of buy ratings on Nokia and

Qualcomm

(QCOM) - Get Report

, which skidded 2 1/2 to 65 9/16. Swedish rival

Ericsson

(ERIC) - Get Report

soared 8 15/16, or 15.9%, to an all-time high of 65 on its addition to the S&P 500, occasioned by the spinoff of

Beverly Enterprises'

(BEV)

institutional pharmacy business.

H.J. Heinz

(HNZ)

gained 2 5/8 to an all-time high of 55 1/4 after President William Johnson was named CEO, replacing Anthony O'Reilly. O'Reilly will remain nonexecutive chairman through September 2000. Bear Stearns upgraded Heinz to buy from neutral and

Merrill Lynch

upped it to near-term buy from accumulate.

Newly rechristened

CBS

(CBS) - Get Report

, formerly

Westinghouse

, fizzled 1 3/4 to 30 1/8 after

Morgan Stanley Dean Witter

downgraded it to neutral from outperform. The firm did the same to Spanish-language broadcaster

Univision Communications

(UVN)

, sending it down 9/16 to 67 3/8.

Agouron Pharmaceuticals

(AGPH)

traded at a 52-week intraday low of 26 3/4 but rebounded for a loss of 1 7/16 to 29 1/2 as investors continued to punish the company for yesterday terminating a cancer-research pact with

Hoffmann-La Roche

and ending development of an anticancer drug. Agouron issued a strongly worded press release late in the session declaring that it was "shocked" by the stock's decline from its Monday close of 39 1/2 and reminding Wall Street that the suspended drug was expected to add just 15 cents per share to earnings in fiscal 2000.

Elsewhere in biotech,

Centocor

(CNTO)

advanced 1 11/16 to 43 7/16 on the news late yesterday that it still expects to seek

Food and Drug Administration

approval for its Crohn's disease drug, Avakine.

Emisphere Technologies

(EMIS)

rose 3/4 to 21 1/2 after entering into a collaborative agreement with

Novartis

to explore oral delivery systems for two Novartis compounds.

Hvide Marine

(HMAR)

splashed up 2 5/16, or 8.3%, to 30 3/8 after it agreed to buy the 36-vessel offshore energy-support fleet of

Care Group

for $284 million.

IMC Global

(IGL)

lost 1 1/2 to 31 7/16 and

Freeport-McMoRan

(FTX)

gave up 9/16 to 31 11/16 after

IMC-Agrico

, a joint venture of IMC Global and

Freeport-McMoRan Resources Partners LP

, adjusted production at two phosphate-crop-nutrient plants.

Vitalink Pharmacy

(VTK)

surged 1 15/16, or 8.3%, to an all-time high of 25 3/16 on takeover scuttlebutt.

3M

(MMM) - Get Report

fell 2 to 96 5/16 and

Imation

(IMN)

sloughed off 3/16 to an all-time low of 16 1/2 on a

Wall Street Journal

report that

Eastman Kodak

(EK)

sued the companies for theft of trade secrets on the manufacture of advanced photographic film. Kodak gave up 3/4 to 60 1/8.

Kerr-McGee

(KMG)

picked up 2 3/4 to 67 on news late yesterday that its CFD 2-1-4 appraisal well in China's Gulf of Bohai flowed light sweet crude oil and associated natural gas in an initial test.