It's supposed to be back-to-school week on Wall Street. Investors back in the market, all the kids back at their trading desks.
But instead the week has begun in a tepid fashion. Volume has been light, and major indices -- despite a number of attempts to get them into the black -- have been chopping to the downside. "Every time this market tries to get into positive territory, it gets beaten down," said Sam Ginzburg, managing director of equity trading at
. "I still don't like the action here. The mood is not good."
More dollar weakness against the yen -- the greenback is at a three-year low -- and some resulting weakness in bonds is giving investors a pretty good reason to stay out of the market. Moreover, people are keeping their eye out for a some key economic reports:
Consumer Price Index
on Wednesday. Investors' apparent need for constant affirmation that the economy isn't getting too hot bothers Ginzburg a little, because even in the best of times some numbers are going to come in strong. "Everybody is micromanaging every specific number," he said. "My experience is whenever you get a market where every single number is important, we're going down short-term."
Dow Jones Industrial Average
was lately down 1.59 to 11,026.84, while the broader
was down 6.06 to 1345.60. Four-letter issues were giving back a good portion of Friday's gains: The tech-steeped
was down 15.62 to 2871.44.
TheStreet.com Internet Sector
index was off 4.25 to 622.53.
was taking the brunt of the Internet selling after
permabear Alan Abelson penned some disparaging things about the stock over the weekend. AOL was down 4.4%. The small-cap
was down 0.33 to 440.86.
Banks continued to trade badly, dashing hopes that the sector would get a boost from the
Merrill Lynch Banking & Financial Services Conference
that kicked off today in New York. The
Philadelphia Stock Exchange KBW Bank Index
was down 5.73 to 772.12.
The 30-year Treasury was off 11/32 to 100 28/32, lifting the yield to 6.06%.
Volume was low and breadth was to the downside. On the
New York Stock Exchange
, decliners were leading advancers 1,577 to 1,150 on 325 million shares. There were 53 new highs and 115 new lows. On the
Nasdaq Stock Market
, decliners were ahead of advancers 1,898 to 1,518 on 509 million shares. There were 96 new highs and 34 new lows.
In all, the trading through midday Monday was emblematic of a market that has been mired in a range since the spring. And that will likely be the way things go for a while longer, according to
technical analyst Steve Shobin.
"There are compelling bullish and bearish cases -- enough to say we're locked in a range that will continue for some time," said Shobin. The bullish case is simple: Stocks have held in well despite higher interest rates and a bit of trouble with the dollar. "On the other hand, the bearish observer could point to the fact that the S&P 500 and the
New York Stock Exchange Composite
have been virtually unchanged for the past six months despite low inflation and torrid earnings."
In the end, it will come down to interest rates, thinks Shobin. If the yield on the 30-year can get down below 5.82%, that would be a significant breakout in bonds, sending out an all clear for stocks. The opposite case would be if the yield got up above 6.28%.
Shobin thinks eventually all this will get resolved on the upside -- though he worries that stocks and bonds have not moved up off some pretty good news on the data front. "We really have been able to make no significant progress," he said. "For now I think we're locked in a range. You buy oversold. You sell overbought."
Monday's Midday Watchlist
Earnings estimates from First Call; earnings reported on a diluted basis unless otherwise specified
Mergers, acquisitions and joint ventures
was up 15/16 to 63 7/16 after it confirmed that it was in talks with
to consolidate the companies' U.S. cellular phone operations,
The New York Times
reported Sunday. An agreement would create a U.S. network capable of rivaling
. Shares of Vodafone were soaring up 6 15/16 to 201 3/4.
are in aggressive, last-minute negotiations to set terms for Mobil to leave a European downstream joint venture with the company before it merges with
reported. Shares of Mobil were off 5/8 to 104 1/2, while Exxon was down 1/2 to 79 15/16.
was sinking 4 13/16 to 93 13/16 after it said it was in talks to acquire
in an all-stock deal worth about $10 billion,
The Wall Street Journal
reported. Under the deal, each General Instrument common share would be exchanged for little more than half of a Motorola share. The proposed merger is aimed at giving the companies a presence in the broadband market, which provides high-speed access for interactive voice, data and video service over cable TV lines. Shares of General Instrument were off 7/16 to 52.
Mark IV Industries
was up 1/16 to 20 15/16 after it said it sold its
Percolator Industrial Filters
in a deal valued at $144.8 million. Shares of Clarcor were down 1/16 to 18 3/8.
, publisher of this Web site, was up 6, or 30%, at 25 3/4. The company said it would launch a sister financial news site in the U.K. in early 2000, and
cited an unconfirmed rumor that the company was a possible takeover target.
agreed to acquire
for $54.24 billion in stock, a move that puts an end to the noisy French fracas and will create the world's fourth-largest oil company. Elf agreed to the offer after Total Fina sweetened a $45 billion hostile bid it made in early July.
was up 1, or 6.7%, to 15 3/4 after it said it was not discussing a possible sale of the company to Rupert Murdoch's
Earnings/revenue reports and previews
was off 1 1/4, or 7.4%, to 15 9/16 after it warned investors that it expects to miss analysts' earnings estimates for the remainder of the year. The company said it would post 1999 earnings between $1.13 and $1.17 per share, missing both the consensus estimate of $1.50 and last year's earnings of $1.42.
was up 1 3/8 to 53 5/16 after it said it would miss third-quarter and 1999 earnings estimates by 8% to 10%, citing start-up costs for new business systems in July.
Offerings and stock actions
was leaping 7 7/8, or 5.9%, to 143 1/8 after it set a 2-for-1 stock split.
was sliding 3 13/16, or 8.3%, to 41 3/4 after it announced plans for a secondary 5.5 million-share secondary offering.
was off 3/8 to 15 1/4 after
Morgan Stanley Dean Witter
rolled out coverage of the stock with an outperform rating and set a price target of 19.
was up 11/16 to 140 11/16 after
analyst Michael Hughes rolled out coverage of the stock with near-term accumulate and long term-buy ratings and set a price target of 160.
BancBoston Robertson Stephens
started coverage of hotel properties REITs
, with a buy rating, and
Felcor Lodging Trust
Innkeepers USA Trust
, with long-term attractive ratings. Shares of MeriStar were up 3/8 to 16 7/8, while Felcor was up 1/16 to 18 5/16. Innkeepers USA shares were advancing 3/8 to 9 3/8.
was up 1 3/8 to 71 7/8 after Merrill Lynch analyst Mike Ching upped his rating to near-term buy from accumulate.
was down 1 1/16 to 42 5/8 after
Salomon Smith Barney
raised its fiscal 1999 and 2000 earnings estimates to $2.35 from $2.30 and $2.70 from $2.55 respectively.
was off 1/4 to 24 1/16 after Merrill Lynch sliced its rating to near-term neutral from accumulate.
was jumping 9, or 8%, to 114 after Merrill Lynch biotech analyst Eric Hecht upped his rating on the stock to a near-term buy from accumulate.
was falling 13 1/4, or 32%, to 28 1/4 after
sliced its rating to sell from hold.
was up 3/16 to 15 1/8 after ING Barings boosted its rating to a buy from a hold.
was off 7/8 to 40 7/8 after
Banc of America Securities
downgraded its shares to market perform from buy. Salomon Smith Barney also cut its rating to outperform from buy.
was down 2 5/8, or 6.2%, to 39 5/8 after Merrill Lynch started coverage of the shares with near-term accumulate and long-term buy ratings.
was slipping 3/8 to 14 3/4 after
Donaldson Lufkin & Jenrette
initiated coverage with a buy rating.
was up 1/2 to 48 after Lehman Brothers analyst Blake Bath sliced pro forma 2000 earnings estimates to $2.36 from $2.46, maintaining his buy rating.
was decling 3 1/4, or 6%, to 50 7/8 after Donaldson Lufkin & Jenrette analyst Kim Zia began coverage of the shares with a buy rating.
Deutsche Banc Alex. Brown
also initiated coverage with a market perform rating.
could experience rough seas ahead, including a drop as sharp as 50% in its share price, Doug Kass of hedge fund
. Kass said AOL could be forced to lower its subscription fees if competitors such as Microsoft and AT&T offer cheaper service. Shares of AOL were sliding 4 5/8, or 4.4%, to 92.
was off 1 9/16 to 33 1/8 after it said that it anticipates launching clinical trials for a proprietary prostate drug to remedy symptoms related to prostate cancer.
was soaring 8, or 11/9%, to 74 3/4 after
Credit Suisse First Boston
eliminated its price target for the company.
was off 3/8 to 24 7/8 after it said it would slash computer prices by up to 17%. Compaq's price cut is only days behind rival
announcement it would slice its business line PC prices by up to 18%. In August, the company trimmed prices on most of its
computer line by up to 11%. Dell shares were off 3/4 to 48 13/16.
said as of Oct. 11 it would raise rates by 5.3%. FDX was down 1 1/8 to 45 1/8.
unveiled a new line of powerful Unix servers to run Web sites. The company said the RS/6000 S80 servers are more powerful than those of
, but cost as little as one-third as much. Shares of IBM were off 1 1/8 to 133 7/8, while Sun Micro was up 1 1/16 to 86 3/4.
School bus operator
was up 7/8 to 7 7/16 said it plans to sell off its U.S. health care operations and seek a buyer for its 44% stake in
. The company said it expects to realize proceeds of about $2 billion from the divestitures. Safety-Kleen was up 1 5/16, or 9.5%, to 13 5/8
was up 4 1/2 to 136 13/16 after it unveiled plans to launch its next generation
Sony Playstation 2
in Japan on March 4, 2000. The company expects unit distribution to hit 1 million.
plans to announce a new strategy acknowledging the company will increase its focus on the Web, as compared with stand-alone computers, the
reported in its online edition. Shares of Microsoft were off 1 1/8 to 93.
was up 1 7/16 to 28 after it announced plans to sell shares in its
subsidiary to stockholders in early 2000, in an effort to bolster its strength and allow it to create more Internet products and services.
As originally published, this story contained errors. Please see
Corrections and Clarifications.