Bewildering Endgame Leaves Traders Bothered

Some Wall Streeters speculated about pre-expiration bewitching, but most see a simple trend toward locking in profits.
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Be careful what you wish for; you might just get it.

At midafternoon, with stocks slogging through another session of soporific action, one market participant cried out for action: "This is boring," he said. "It's slow. What's to do? Let's get something going. Let's make something happen. Either way."

Well,

something

did happen, and it wasn't pleasant for those long, especially in tech stocks. The 3 o'clock hour, once the bull market's secret weapon, proved the enemy today as a cautiously positive bias completely evaporated.

Throughout the session, major averages were hampered by weakness in select tech stocks, and the trend intensified as the day waned.

"Did somebody make a negative call on technology?" asked one market player, noting others were just as perplexed by the downturn. "I think it's just the reverse of yesterday."

The

Nasdaq Composite Index

slid 35.17, or 1.4%, to 2542.23 after heading into the final hour just below its morning high of 2587.33.

TheStreet.com Internet Sector

index shed 22.71, or 3.5%, to 624.79.

"I didn't see and specific news or event to change psychology," said Jim Volk, co-head of institutional trading at

D.A. Davidson

in Portland, Ore. "Some people are saying

the selling could be getting ready for options expiration tomorrow, but that's a small one."

In addition to the swooning techs, Volk noted the

Morgan Stanley Cyclical Index

ended down 0.2% at 589.76 after rising as high as 596.54. "They had 'em up, but you had some profit-taking in stocks that have had major moves. I think it's more that than any event."

IBM

(IBM) - Get Report

was the biggest laggard among

Dow Jones Industrial Average

components, falling 1.2%. In over-the-counter trading,

Dell

(DELL) - Get Report

and

Sun Microsystems

(SUNW) - Get Report

tumbled more than 3.5% apiece, propelling the

Nasdaq 100

down 2.1%.

Meanwhile,

Micron

(MU) - Get Report

lost 2.9% following negative comments from

Merrill Lynch

(the ghost of

Tom Kurlak

?) and

Intel

(INTC) - Get Report

dipped 3.4%. The

Philadelphia Stock Exchange Semiconductor Index

lost 3.2% as several chip equipment makers surrendered recent gains.

Amazon.com

(AMZN) - Get Report

was not the biggest drag on the DOT but was the most visible. The online retailer fell 6.2% after announcing plans to take on up to $2 billion in debt to pay for its still profitless expansion.

There was joy elsewhere in Netland, however,

eToys

(ETYS:Nasdaq) rose 285% from its IPO price of $20 while

CNet

(CNET) - Get Report

climbed 5.2% on word it will be added into the Nasdaq 100. Also,

Healtheon

(HLTH)

rose 26.6% on word it will merge with fellow medical information provider

WebMD

.

Among blue-chip gauges, the Dow industrials fell 20.65, or 0.2%, to 10,866.74, the nadir of a tight range which took the index as high as 10,946.08. Similarly, the

S&P 500

fell 5.40, or 0.4%, to 1338.83, its intraday low vs. a high of 1350.49.

In addition to IBM, the Dow was retrained by weakness in cyclicals

Alcoa

(AA) - Get Report

and

United Technologies

(UTX) - Get Report

.

Both averages were supported by modest strength in drug makers such as

Johnson & Johnson

(JNJ) - Get Report

,

Merck

(MRK) - Get Report

and

Warner-Lambert

(WLA)

; the

American Stock Exchange Pharmaceutical Index

rose 1.1%.

Energy stocks were also strong while airlines recovered some of

yesterday's debasing. Meanwhile, paper makers were enlivened by positive comments from

Morgan Stanley Dean Witter

; the

Philadelphia Stock Exchange Forest & Paper Products Index

added 1.1%.

Meanwhile, the slow and steady

Russell 2000

continued to outpace its big-cap counterparts, rising 1.88, or 0.4%, to 448.02, although well off its high of 450.97.

In

New York Stock Exchange

trading, 752.3 million shares were traded while advancers led declining stocks 1,729 to 1,208. In

Nasdaq Stock Market

activity, just over 1 billion shares were exchanged while gainers led 2,268 to 1,743. Notably, new 52-week highs led new lows 53 to 27 in Big Board activity and by 118 to 35 in over-the-counter trading.

Lease, Don't Buy

The final-hour turnaround -- particularly in tech stocks -- worried some, but the accompanying lackluster volume on the NYSE had other market watchers speculating this is just another pause (or "basing," for technicians in the house) before stocks march higher. Sam Ginzburg, managing director of equity trading at

Gruntal

, takes the opposite tack.

"The market as a whole is waiting for something to happen," Ginzburg said. "One of the biggest portfolio managers I talk with said, 'This is not an investor's market.' I agree: This is a renter's market, not a buyer's market. Portfolio managers aren't building positions.

"Even the best trading firms are saying they're taking money off the table quicker with profits. It's not worth it," he continued. "There's not much to do here unless you have some sort of ax to grind in some stock. It's not like you see a stock go up and another go up in sympathy. It's hard to make a penny in this market."

Ginzburg noted the performance of

Providian

(PVN)

, which fell 13.9% yesterday after the

San Francisco Chronicle

said the city's D.A. is investigating the company for possible fraud. Providian rose as high as 111 1/4 today after the company reiterated a bullish profit outlook but closed off 2.8% at 104.

"The couldn't hold it because people had

previously made so much money in the stock, so why stay in?" he said. "This market is punishing. If we get another bad piece of info, I think you've got potential for a decent down-sweep."

Among other indices, the

Dow Jones Transportation Average

rose 29.32, or 0.8%, to 3608.52; the

Dow Jones Utility Average

gained 0.36, or 0.1%, to another record 324.61; and the

American Stock Exchange Composite Index

added 3.67, or 0.5%, to 792.03.

The price of the 30-year Treasury bond slid 4/32 to 91 27/32, its yield rising to 5.83%.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

fell 39.51, or 0.6%, to 6974.86 and the

Mexican Stock Exchange IPC Index

rose 68.29, or 1.2%, to 5799.49.

Thursday's Company Report

By Heather Moore
Staff Reporter

(

Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.

)

Healtheon grew 21 3/16, or 26.6%, to an all-time high of 100 5/8 after confirming yesterday's reports that it will merge with privately held WebMD. The stock swap is valued at about $5.5 billion and calls for Healtheon to issue 1.82 shares for each WebMD share. Each company will own half of the merged company.

A slew of health care names rallied on the deal, some with a greater connection to the actual announcement than others.

ADAM Software

(ADAM)

, which offers services similar to WebMD's, rose 3 1/4, or 13.8%, to an all-time high of 26 3/4.

Superior Consultant

(SUPC)

, which has made an investment in WebMD and has entered a preferred services relationship with the company, rose 8 1/8, or 25.9%, to 39.

Meanwhile,

Health Management Systems

(HMSY) - Get Report

surged 1 1/2, or 32.9%, to 6 1/16;

Sabratek

(SBTK)

surged 4, or 23.7%, to 20 7/8;

Advanced Health

(AHTC)

surged 1 3/16, or 27.9%, to 5 1/2;

HCIA

(HCIA)

surged 1 11/16, or 26.5%, to 8 3/16;

Premiere Technologies

(PTEK)

surged 1 5/8, or 10%, to 17 15/16;

Infocure

(INCX)

surged 1/2 to 38 13/16; and

IDX Systems

(IDXC)

surged 1 7/16, or 6%, to 25 5/8.

eToys rocketed 57, or 285%, to 76 9/16 after its 8.3 million-share IPO was priced at the top of the range last evening by

Goldman Sachs

.

CAIS Internet

(CAIS:Nasdaq) climbed 3, or 15.8%, to 22 1/8 after

Bear Stearns

priced the company's 6 million-share IPO at 19, above the expected range of $14 to $16. The company is an Internet service provider based in Washington.

Mergers, acquisitions and joint ventures

Danka Business Systems

(DANKY)

added 3/32 to 5 19/32 after selling a 90% stake in its outsourcing business,

Danka Services International

, to a company controlled by

Schroder Ventures

for $300 million.

Devon Energy

(DVN) - Get Report

picked up 2 1/4, or 7.1%, to 33 3/4 after buying

PennzEnergy

(PZE)

. PennzEnergy shareholders will own about 31% of the combined company, which will have a market cap of about $2.6 billion. Devon shareholders will own about 69%. PennzEnergy lost 1/8 to 14 1/2.

Investment Technology

(ITG)

jumped 6 9/16, or 20.2%, to 39 1/8 after forming a partnership with

Bloomberg

to offer customers access to their respective trading systems.

NewsEdge

(NEWZ)

expanded 23/32, or 8.3%, to 9 1/2 on word it's working with

Microsoft

(MSFT) - Get Report

on a project to provide news content to Microsoft Exchange Server.

Tech Data

(TECD) - Get Report

flew 5, or 14.6%, to 39 3/8 after agreeing to become the IT procurement, configuration and assembly, and logistics services provider for the

GE Capital IT Solutions

unit of

General Electric

(GE) - Get Report

. The three-year deal is expected to generate about $2 billion in annual incremental revenue for Tech Data, whose sales for the latest year were $11.5 billion. GE fell 1 9/16 to 106 7/16.

Viacom

(VIA) - Get Report

tacked on 5/8 to 41 3/4 after its

MTV Networks

unit and

TCI Music

(TUNE)

entered an Internet music alliance. TCI Music, which gave up 1 1/4 to 46 15/16, is controlled by

Liberty Media

(LMGA:NYSE).

Earnings/revenue reports and previews

Adac Laboratories

(ADAC)

skidded 1 5/16, or 13.8%, to 8 3/16 after late yesterday delaying its second-quarter earnings release because it's considering taking additional charges and establishing more reserves.

American Eagle Outfitters

(AEOS)

excelled 1 to 38 15/16 following an earlier high of 41 1/4 after last night reporting first-quarter earnings of 25 cents a share, 4 cents above estimates.

Delco Remy

(RMY)

advanced 1, or 10.4%, to 10 5/8 after posting third-quarter earnings of 32 cents a share, 1 cent above the four-analyst view and above the year-ago 23 cents.

Dole Food

(DOL) - Get Report

rose 5/8 to 31 3/4 after saying it sees second-quarter earnings falling "materially" lower than previous estimates due to weak banana prices in Europe. The company expects to post earnings of 55 cents to 75 cents a share, which would be below the four-analyst prediction for 99 cents.

Etec Systems

(ETEC)

plunged 5 11/16, or 15.9%, to 30 3/8 after late yesterday reporting third-quarter earnings of 9 cents a share, 1 cent below the 12-analyst prediction and far off the year-ago 47 cents. The company also warned of losses in the fourth and first quarters. Today,

Credit Suisse First Boston

cut the stock to hold from buy.

Photronics

(PLAB) - Get Report

sank 1 1/4 to 24 1/8 after last night posting second-quarter earnings of 9 cents a share, 2 cents below estimates.

Lawnmower juggernaut

Toro

(TTC) - Get Report

grew 1 5/8, or 5%, to 34 3/8 after saying it expects to report second-quarter earnings of $1.81 to $1.83 a share. The three-analyst consensus is calling for $1.73.

Wet Seal

(WTSLA)

collapsed 5 15/16, or 14.4%, to 35 3/8 even after last night beating by 3 cents first-quarter forecasts calling for earnings of 31 cents a share.

Offerings and stock actions

Covad Communications

(COVD)

tanked 6, or 9.6%, to 56 1/2 after last night filing with regulators to sell 7.5 million shares in a secondary offering.

Gap

(GPS) - Get Report

sailed up 1 3/8 to 62 1/16 after its board approved a 3-for-2 stock split.

Vodafone

(VOD) - Get Report

gained 6 13/32 to an all-time high of 205 after saying it will consider a stock split once it completes its merger with

AirTouch Communications

(ATI) - Get Report

this summer. Airtouch added 2 5/8 to an all-time high of 104 3/4.

Analyst actions

Morgan Stanley Dean Witter

raised second-quarter and full-year 1999 earnings estimates for a host of paper and forest names. Among the beneficiaries,

Georgia-Pacific

(GP)

picked up 1 9/16 to 91 7/16.

Weyerhaeuser

(WY) - Get Report

picked up 1 11/16 to 68 3/4;

Boise-Cascade

(BCC) - Get Report

picked up 11/16 to 40 5/8;

Willamette Industries

(WLL) - Get Report

picked up 5/16 to 47 15/16; and

Louisiana-Pacific

(LPX) - Get Report

picked up 1/2 to 21 1/16.

Cadbury Schweppes

(CSG)

vaulted 2 1/16 to 57 5/16 after Credit Suisse First Boston raised it to buy from hold, saying the stock was oversold.

Deutsche Bank

lifted the stock to neutral from underperform.

Jabil Circuit

(JBL) - Get Report

soured 3 1/8, or 5.9%, to 49 7/8 after

BancBoston Robertson Stephens

lowered it to long-term attractive from buy.

Project Software

(PSDI)

popped up 3, or 12.7%, to 26 7/8 after BancBoston Robertson Stephens upped it to buy from long-term attractive.

Raychem

(RYC)

lost 1 1/4 to 35 after

Salomon Smith Barney

cut it to neutral from buy, lowering its price target for the stock to 37 from 40 a share. Credit Suisse First Boston dropped Raychem to hold from buy.

Miscellany

CNet jumped 6 1/4, or 5.2%, to 125 3/4 on news it will join the Nasdaq 100 Index after Monday's close. It will replace

McCormick

(MCCRK)

, which is moving to the NYSE. McCormick gave up 7/8 to 30 9/16.

Emulex

(EMLX)

shot up 12 3/4, or 20.3%, to an all-time high of 75 1/2 and

QLogic

(QLGC)

shot up 13 5/8, or 13.2%, to an all-time high of 116 7/8 on investor enthusiasm for companies that offer network storage devices.

Ford

(F) - Get Report

rose 1/4 to 57 15/16 even after its chief financial officer, John M. Devine, announced plans to retire at the end of September. Effective July 1, Vice Chairman W. Wayne Booker will take the additional post of CFO.

Medtronic

(MDT) - Get Report

climbed 1 9/16 to 69 1/16 after filing a patent infringement suit against

Boston Scientific

(BSX) - Get Report

. Medtronic claims Boston Scientific's Nir stent infringes Medtronic's Wiktor patent. Boston Scientific hopped up 2 5/16, or 5.7%, to 43 1/4.