Stocks were following their own destinies at midday, guided by momentum, analyst actions, and perhaps even strict fundamentals in certain rare cases. But few observers on Wall Street were betraying much apprehension over the
Federal Open Market Committee
meeting that was entering its final leg in Washington.
Someday -- perhaps someday soon, for all we know -- investors will start to care about interest rates.
Today' Market: Join the discussion on our
"People have been saying that for months, and it hasn't happened," said Peter Boockvar, equity strategist at
. "I'm done thinking about when the market's going to react to bad news."
Then he's probably making money. As has been the case for some time now, the market's strength was concentrated in a sector that used to be considered pretty interest-rate sensitive -- technology. The
Nasdaq Composite Index
was lately up 44, or 1.2%, to 3828, extending its push into record territory.
Other major proxies were mixed.
The Dow Jones Industrial Average
was up 4 to 11,149, while the
was 7 higher to 1425.
TheStreet.com Internet Sector
index was surging 32, or 2.9%, to 1130, and the small-cap
was up 4 to 471.
"No one's paying attention to the FOMC meeting," said Boockvar. "The bond market is pricing in a hike by February, but stocks are in their own world, and not paying attention to interest rates."
The market's lack of concern is understandable. Virtually no one expects Y2K liquidity concerns to keep the Fed from raising rates.
But next year is another thing. It's fast becoming conventional wisdom that rates are going up in 2000. About two-thirds of the primary dealers polled by
expect interest rates to go up when the FOMC meets in February. The question, then, is whether the Fed will adopt a tightening bias today to signal such a move is coming, and, if so, whether stocks will react.
"I don't see that as a tightening bias as negative for the market," said Barry Hyman, chief market strategist at
Ehrenkrantz King Nussbaum
. "The market has basically priced that in."
That depends on what you mean by "the market." The February fed funds futures contract was lately fully pricing in a 25-basis-point hike at the Fed's next meeting, Feb. 2, and was putting 58% odds on a 50-basis-point hike.
, up a further 3.5% today?
, up 3.5%?
, 9.9% higher? Money continues to flow into the winner stocks of a market following very different rules than those governing the bonds.
"It flies in the face of traditional theories," said Hyman. "Internet companies use equity for debt -- that's the key here. As long as Wall Street is willing to get behind this sector and finance new IPOs and secondaries, and companies can use that equity as capital, interest rates are not that important a factor."
"It's almost a religious, enlightening experience to see what's going on here," he continued." It's taken value players and turned them into growth player, and it's taken growth players and turned them into momentum players."
The Fed will announce any changes it makes to monetary policy at about 2:15 p.m. In the meantime, the bond market was rebounding from yesterday's declines. The 30-year Treasury was up 12 ticks to 96 7/32, putting its yield at 6.41%. (For more on the fixed-income market, see today's early
Financial stocks were drifting higher, with the
Philadelphia Stock Exchange/KBW Bank Index
up 1.6%. The
American Stock Exchange Broker/Dealer Index
was up 0.4% despite some selling in component
Morgan Stanley Dean Witter
, which was off 0.5%.
Paper stocks were rebounding from yesterday's declines, the
Philadelphia Stock Exchange Forest & Paper Product Index
Technology indices were showing strength. The
Morgan Stanley High Tech 35
was up 1.3%, while the
Philadelphia Stock Exchange Semiconductor Index
was 2.6% higher.
Breadth was negative on strong volume, though trading was a bit lighter than it has been in recent sessions.
New York Stock Exchange:
1,394 advancers, 1,515 decliners, 527 million shares. 52 new 52-week highs, 212 new lows.
Nasdaq Stock Market:
1,801 advancers, 2,111 decliners, 817 million shares. 166 new highs, 109 new lows.
Tuesday's Midday Watchlist
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
Mergers, acquisitions and joint ventures
said it entered a strategic alliance with
, which provides high-speed Internet access over cable lines, to speed up their network. Road Runner is a joint venture between
Media One Group
and closely held publisher
. Road Runner will use Akamai servers in its network to improve the speed of its Web sites.
Shares of Akamai Technologies were popping 13 to 300, while Time Warner was losing 13/32 to 65 13/16. MediaOne shares were gaining 7/32 to 78 3/16 and Microsoft was slipping 1 3/16 to 111 5/8, while Compaq was adding 1 1/4 to 26 1/4..
was mounting 9/16, or 5%, to 11 7/8 after it said its board withdrew approval of a proposed merger with
saying the proposed deal was not in the best interests of shareholders. Cell Genesys also said the value of its equity ownership of
had increased by about $230 million since its merger agreement with Genzyme was announced in October. Shares of Genzyme were tacking on 2 5/16, or 6%, to 40 7/16 and Abgenix was jumping 5 11/16, or 5.3%, to 112 7/16.
Columbia Energy Group
, which has been pegged by
as an acquisition prospect, said other companies are showing interest in it and are willing to make higher bids. According to a
Securities and Exchange Commission
filing, both companies said that interested firms have been invited to participate in a second round of bidding. Two months ago, Columbia rejected an $74-a-share offer from NiSource, which made way for rival bids. Shares of Columbia Energy Group were mounting 4 1/16, or 7%, to 62 1/16, NiSource was adding 3/4 to 17 3/8.
and venture capital firm
have teamed up with a cluster of sports stars including
to form an online sporting goods store.
, as the venture will be known, expects to start selling sporting goods on the Internet next month, and has plans to go public next year. MVP.com will receive $85 million in advertising from CBS over four years.
Additionally, MVP.com said it will acquire the online retailing business of
, an Internet sports media company and publisher of CBS SportsLine. The companies signed an agreement for a 10-year relationship where SportsLine will receive $120 million in guaranteed cash payments over 10 years and receive an equity interest in MVP.com. Despite the announcement, shares of CBS were down 23/32 to 59. For additional coverage of the MVP.com acquisition, check out a separate
story from the
Delta & Pine Land
was lifting 5/16 to 16 1/2 after it said it was disappointed
had withdrawn its merger approval filing with the
and said the life sciences group owes Delta & Pine $81 million in termination fees. Shares of Monsanto were sliding 1 7/8, or 5%, to 35 3/8. For additional coverage of Delta's
demands, check out a separate story from the
was sliding 1 3/8 to 97 5/8 after it agreed to acquire
for $192 million in a cash tender offer. Shares of Softworks were hopping 7/32 to 9.
network said it completed a series of new long-term affiliation deals for
that it expects could bring in more than $1.5 billion in subscriber fees over the next 10 years,
The Wall Street Journal
reported. Shares of General Electric were bouncing 1 9/16 to 154 13/16.
said it formed a cooperative agreement with
including supplying engines and transmissions to GM and joint cooperation in technology. Honda said the agreement would not involve the automakers taking any equity stake in each other. Shares of General Motors was losing 1 to 71 1/16, while Honda was edging up 5/8 to 75 13/16.
was shedding 3/16 to 18 1/8 after it said it agreed to buy privately held meat and poultry processor
Corporate Brand Foods America
for $261 million. IBP said it expects the acquisition to be dilutive to 2000 earnings by 7% to 10% a diluted share. The current seven-analyst estimate calls for earnings of $2.71 a share.
was mounting 2 7/8, or 18.8%, to 18 1/8 after it said it will be acquired by an investor group for $19 a share, or $725 million. Former
CFO Jerome York will be the new Micro Warehouse chairman and CEO. Shares of IBM were climbing 9/16 to 109 3/4. For additional coverage of
Micro Warehouse buy, check out a separate story from the
said it will sell its Austrian-based plastics extrusion systems unit to
for $47 million in cash. Milacron said the deal will result in a gain of 30 cents a share. Milacron was skidding 1/16 to 13 15/16.
was gaining 3 9/16 to 130 after it said it will buy
for $285 million.
Rohm & Haas
added 5/16 to 37 1/2 after it said it plans to sell its Industrial Coatings business to German chemical group
for $175 million.
Earnings/revenue reports and previews
was bouncing 7/8 to 36 5/8 after it reported second-quarter earnings of 68 cents a share, beating the 10-analyst estimate of 66 cents and the year-ago 58 cents.
was leaping 6 1/4, or 6.4%, to 103 3/4 after it reported third-quarter earnings of 9 cents a share, which include $799,000 in preferred dividends. The four-analyst estimate was for 13 cents a share, while the year-ago earnings were 19 cents a share. Emmis also declared a 2-for-1 stock split.
Great Atlantic & Pacific
was climbing 5/16 to 26 after it reported third-quarter earnings of 47 cents a share, beating the six-analyst estimate of 40 cents. The year-ago result was a loss of 23 cents a share, which included a charge.
National Discount Brokers
reported second-quarter earnings of 25 cents a share, crushing the two-analyst estimate of 4 cents but down from the year-ago 32 cents. Shares of National Discount Brokers were falling 1 3/8 to 33 1/2.
was declining 1 1/16, or 10.4%, to 9 1/16 after it warned it sees lower-than-expected fourth-quarter revenue and earnings-per-share, but said it is looking for increased momentum in the second quarter and second half of next year. The company said it expects fourth-quarter earnings to be in the range of 20 cents to 25 cents a share, excluding charges, below the current 11-analyst estimate of 40 cents a share. For additional coverage of Navigant's earnings warning, check out a separate
story from the
Offerings and stock actions
was advancing 13, or 6.4%, to 213 7/8 after it announced last night it has set a 2-for-1 stock split.
was lifting 4 7/8, or 13.2%, to 41 5/8 after it said it will spin off its e-commerce unit to create an e-health company.
upped its price targets on four telecom equipment stocks. Its target on
climbed to 360 from 225, while
target rose to 570 from 460.
price target climbed to 125 from 85, while Motorola's rose to 165 from 120.
Lately, Foundry Networks shares were soaring 15 1/2, or 5.2%, to 310 1/4, while Qualcomm was leaping 16 7/8 to 483 1/4. Shares of Nortel Networks edged up 2 9/16 to 95 3/8 and Motorola shares were bouncing 2 5/8 to 141 5/8.
resumed coverage of
as a near-term and long-term accumulate. Shares of Apple were popping up 2 to 100.
Deutsche Banc Alex. Brown
upped its rating on
to buy from market perform. Shares of Burlington Northern were losing 1, or 6.3%, to 24 9/16.
Credit Suisse First Boston
raised its 2000 earnings-per-share estimate on
to 40 cents a share from 35 cents.
raised its price target to 40 from 36, and upped its 2000 earnings estimates to 37 cents from 35 cents. Shares of Cabletron Systems were adding 1/4 to 28.
PaineWebber raised its rating on
to buy from attractive. Shares of Conoco were edging up 1/2 to 22 3/16.
upped its rating on
to buy from neutral. Shares of Go.com were lifting 4 5/16, or 19.7%, to 26 3/16.
was started at a strong buy by Deutsche Banc Alex. Brown. Shares of NBC Internet were climbing 9 7/16, or 11.9%, to 89.
Morgan Stanley Dean Witter rolled out coverage of
with an outperform rating. Shares of Portal Software were moving up 4 3/8 to 114 1/16.
was mounting 1/16 to 11 11/16 after it said co-founder Joel Elftmann is retiring as president and CEO but will continue as chairman. Donald Mitchell, a former president of
Air Products Electronic Chemicals
, was named to succeed Elftmann as president and CEO.
will move Jan. 3 to the New York Stock Exchange from the Nasdaq. Qwest will trade under the stock symbol Q. Shares of Qwest Communications were gaining 1 7/8 to 42 9/16.
The Heard on the Street column in
The Wall Street Journal
takes a look at a two-sided investment strategy, known as a "paired trade," aimed at profiting from valuation gaps between two related securities. The latest such pairing to pop up is that of
. In this case, investors are buying shares of Williams, while shorting, or selling, its telecommunications offshoot. The hope is that Williams' management will unlock the hidden value in its energy assets by potentially spinning off its Williams Communications shares. Shares of Williams Communications were losing 1/16 to 26 3/8, while Williams was falling 3/32 to 28 13/16.