Big-Cap Tech Remains a Magnet for Money as Nasdaq Scores Again

The Nasdaq Comp makes it nine records in the last 10 sessions, with market players afraid to miss out on a continued rally.
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As it did

yesterday, the

Nasdaq Composite Index

mocked that puny downside dip it took on

Tuesday and jumped again to close at another all-time high.

Carrying most of the load today were the Nasdaq Comp's big-cap tech horses, which with their advance masked the narrow margin by which advancers beat decliners on the

Nasdaq Stock Market

.

The Nasdaq Comp rallied 41.33, or 1.3%, to 3197.29. It was the index's ninth record closing high in the last 10 sessions. The Comp hit an intraday all-time high today also, peaking at 3201.38.

Volume was heavy again on the Nasdaq, with 1.37 billion shares changing hands. On Tuesday the Nasdaq set a volume record with about 1.46 billion shares exchanged.

Helping the Comp gain were index giants

Microsoft

(MSFT) - Get Report

,

Cisco

(CSCO) - Get Report

,

Intel

(INTC) - Get Report

and

Qualcomm

(QCOM) - Get Report

, which all posted solid advances. Qualcomm soared 25 15/16, or 8.1%, to 345 7/16.

PC giant

Dell

(DELL) - Get Report

, which accounts for a respectable amount of the market-cap-weighted Comp, advanced ahead of its earnings report which was released after the close. Dell posted third-quarter earnings of 18 cents a share, matching the 27-analyst

First Call/Thomson Financial

estimate.

TheStreet.com/nytimes.com

joint newsroom covered the results in a

story this evening.

The Comp was by far the star of the day as the rest of the major market averages lagged. Badly. In fact, the

Dow Jones Industrial Average

and the

Russell 2000

couldn't manage to close in the green.

"No one wants to miss the party," said Jay Suskind, head of institutional equity trading at

Ryan Beck

, of the momentum behind the Nasdaq. He pointed out that the money seems to be going toward the mainstream big-cap tech companies.

Semiconductor stocks also helped the Comp's cause. Chip stocks posted gains after

Merrill Lynch

came out with a positive report on the sector, in which it raised its price targets on the stocks of nine U.S. chipmakers and two from Europe. Merrill raised its 2000 revenue growth assumption for the semiconductor industry to 21.5% from 18.6%. The

Philadelphia Stock Exchange Semiconductor Index

closed at an all-time high, soaring 3% to 660.28.

Meanwhile, the Dow slipped 2.44 to 10,595.30.

DuPont

(DD) - Get Report

was a notable drag on the Dow. Microsoft was the biggest positive influence on the average.

The

S&P 500

added 8.00, or 0.6%, to 1381.46. The Russell 2000 had its recent winning streak halted, falling 1.23, or 0.3%, to 447.49.

TheStreet.com Internet Sector

index tumbled 13.69, or 1.6%, to 820.91, dragged down the most by

RealNetworks

(RNWK) - Get Report

.

TheStreet.com

Red Hots index rose 6.28, or 2.2%, to 298.14. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.

Stocks received no direction from the bond market, which was closed in observance of Veterans Day.

Tomorrow bond and stock traders will get a look at two key economic reports: October

retail sales

and preliminary third-quarter

productivity

and

unit labor costs

. Economists are predicting on average that productivity will rise 3% while unit labor costs are projected to rise 1.4%, according to a

Reuters

poll. Economists are expecting overall retail sales to be unchanged; excluding autos, core sales are expected to be up 0.3%.

Fed

chief

Alan Greenspan

eyes the productivity data closely. Accelerated productivity and slower unit labor costs aid in keeping inflation in check.

As for tomorrow's economic data, Suskind said there's not much concern about the numbers overall. He said the market's kind of content to wait with the expectation being that any numbers ahead of the

Federal Open Market Committee

meeting Tuesday will be benign for the most part. Reaction could be notable, however, if there's something totally unexpected in the data, he said.

As for the upcoming FOMC meeting, Wall Street is divided on what the panel will or will not do regarding interest rates.

James Paulsen, chief investment officer at

Wells Capital Management

, said as far as the FOMC meeting goes next week, considering that sentiment is 50-50, whatever the Fed does probably won't have a big impact on either stocks or bonds.

Oil service stocks slumped after their recent upside tear. The

Philadelphia Stock Exchange Oil Service Index

fell 3%.

Other losing sectors included gold mining stocks and e-commerce issues. The

Philadelphia Stock Exchange Gold and Silver Index

gave up 3.9%, while

TheStreet.com E-Commerce Index

shed 1.5%.

Looking for a Slowdown

Looking ahead, Paulsen thinks both the stock and bond markets will go higher next year, particularly bonds, based on his outlook that economic growth will slow. Stocks, however, he thinks will run into some trouble because of deteriorating earnings momentum, but lower yields will help out equities.

Paulsen thinks the economy is about to journey into a "deceleration phase," which would mark the third phase for the economy since the post-Asian crisis, with the first two phases being an "accelerating" and then a "peaking" stage, one he thinks the economy is in now. He said real GDP could slow to closer to 2% next year rather than the 4% of the last year.

For next year, he's tilted toward bonds at the margin and that the intense inflation fears that have beset the markets for months now creates a huge opportunity for bond investors who don't think inflation's going to be an issue going forward.

In his monthly report for November, Paulsen wrote: "Our best guess is that the character of the stock market may be like 1995, where the economy entered a 'decelerating phase' after an intense inflation scare during 1994. In 1995, even though economic growth ground almost to a halt, because it avoided recession and because long-term yields collapsed, stock prices posted a healthy advance in line with soaring bond prices. As economic deceleration becomes more obvious, leadership within the stock market should become increasingly dominated by larger-cap, stable-earnings, blue-chip companies."

TheStreet.com

took a look at the signs that the economy is slowing in a

story this afternoon.

In

New York Stock Exchange

trading, 889.9 million shares were exchanged while declining stocks beat advancers 1,714 to 1,260. On the Nasdaq, winners beat losers 2,015 to 1,983. New 52-week lows beat new highs 138 to 81 on the Big Board, while new highs beat new lows 242 to 88 in over-the-counter trading.

Among other indices, the

Dow Jones Transportation Average

rose 5.75, or 0.2%, to 3011.99; the

Dow Jones Utility Average

added 2.02, or 0.7%, to 299.35; while the

American Stock Exchange Composite Index

gained 3.42, or 0.4%, to 819.23.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

rose 122.01, or 1.7%, to 7488.46 and the

Mexican Stock Exchange IPC Index

gained 122.46, or 2.1%, to 6086.30.

Thursday's Company Report

By Tara Murphy
Staff Reporter

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.

)

Mergers, acquisitions and joint ventures

Grupo Mexico

said it was extending the expiration of its offer for

Asarco

(AR) - Get Report

through Friday, saying it now has an 89.5% stake in the company. Shares of Asarco fell 3/16 to 29 9/16.

CIT Group

(CIT) - Get Report

fell 5/16 to 22 11/16 after it said it received regulatory approval for its $560 million acquisition of the commercial services unit of

Heller Financial

(HF) - Get Report

. Shares of Heller climbed 9/16 to 24 7/8.

CNN News Group

, a unit of

Time Warner

(TWX)

, said it plans to buy a $20 million minority equity stake in

InterVu

(ITVU)

, a provider of software and services to broadcast over the Internet. Shares of Time Warner inched up 7/8 to 68 9/16, while InterVu hopped 12 5/8, or 19.9%, to 76 1/8.

Healtheon

(HLTH)

rose 3 7/8, or 10.1%, to 42 7/16 after saying its shareholders gave their stamp of approval to a merger with

WebMD

,

Mede America

and

Greenberg News Network

.

Kaufmann & Broad

(KBH) - Get Report

gained 1/8 to 23 7/16 after saying it hired an advisor to explore the sale of its affordable housing unit.

Lucent

(LU)

slipped 5/16 to 75 1/16 after announcing it will build a high-speed optical communications network in the U.K. for

British Telecom

(BTY)

. Shares of British Telecom flew 14 1/4, or 7.6%, to 202 5/16.

Solutia

(SOI) - Get Report

fell 1/2 to 16 1/2 after it said it would buy

Morgan Grenfell Private Equity's

stake in

Vianova Resins

for $640 million.

Tandy

(TAN) - Get Report

tacked on 6 1/4, or 9.6%, to 71 7/16 after it said its

RadioShack

unit has a strategic pact with Microsoft. Microsoft will make a $100 million investment in the new RadioShack.com. Tandy COO Dave Edmondson announced the company's plans to spin off its

RadioShack.com

division in an IPO. Shares of Microsoft gained 2 1/2 to 89 5/8.

Earnings/revenue reports and previews

Bank One

(ONE) - Get Report

slipped 1/8 to 34 1/2 after yesterday announcing it is slicing its fiscal 1999 earnings outlook to $3.45 to $3.55 a share from $3.60 to $3.65 as a result of slowness at its

First USA

credit-card division. The company also announced the postponement of its Nov. 15 analyst meeting. Today,

Merrill Lynch

cut shares of Bank One to long-term accumulate from buy, while

Advest

maintained its rating of market perform.

Banc of America Securities

cut Bank One's earnings-per-share estimates and price target, while

PaineWebber

also cut its EPS estimates and said it continues to be cautious.

TheStreet.com/nytimes.com

joint newsroom covered the Bank One news in a

story last night, and

TSC

also analyzed the

postclose news.

Advanced Micro Devices

(AMD) - Get Report

jumped 5, or 21.7%, to 28 after Chairman and CEO W.J. Sanders said business looks terrific and the company should break even in the fourth quarter. AMD said it expects to ship 1 million Athlon processors in the fourth quarter.

Brady

(BRC) - Get Report

climbed 11/16 to 31 9/16 after it posted first-quarter earnings of 54 cents a share, well above the two-analyst estimate of 44 cents and the year-ago 38 cents a share.

Claire's Stores

(CLE)

fell 1 5/16, or 6.3%, to 19 11/16 after it posted third-quarter earnings of 25 cents a share, in line with the eight-analyst estimate and the year-ago 25 cents a share.

Gap

(GPS) - Get Report

inched up 1/16 to 34 1/4 after it reported third-quarter earnings of 35 cents a share, a penny better than the 22-analyst estimate and up from a year-ago 27 cents a share. Gap's CFO said the company was on track for a strong fourth quarter and is well positioned for a record year next year.

TheStreet.com/nytimes.com

joint newsroom wrote about it in a separate

story.

Griffon

(GFF) - Get Report

rose 3/16 to 7 1/2 after it posted fourth-quarter earnings of 32 cents a share, a penny shy of the single-analyst estimate and down from a year-ago 35 cents a share.

Lands' End

(LE) - Get Report

plummeted 27 5/16, or 32.8%, to 56 after it posted third-quarter earnings of 28 cents a share, beating the eight-analyst estimate of 25 cents a share and the year-ago 1 cent a share.

TheStreet.com/nytimes.com

joint newsroom covered Lands' End's

earnings in a separate story.

U.S. Industries

(USI) - Get Report

gained 9/16 to 13 15/16 after it reported fourth-quarter earnings of 55 cents a share, beating the five-analyst estimate of 49 cents and the year-ago 46 cents a share.

U.S. Industries

(USI) - Get Report

gained 9/16 to 13 15/16 after it reported fourth-quarter earnings of 55 cents a share, beating the five-analyst estimate of 49 cents and the year-ago 46 cents a share.

Xoma

(XOMA) - Get Report

inched up 7/32 to 2 31/32 after it reported a third-quarter loss of 21 cents a share, narrower than the single-analyst estimate of 24 cents and the year-ago loss of 33 cents.

Offerings and stock actions

Allegheny Teledyne

(ALT) - Get Report

slipped 3/8 to 14 1/2 after it said its shareholders approved a 1-for-2 reverse stock split, immediately following the company's spinoffs of the aerospace and electronic consumer segments.

Maytag

(MYG)

gained 7/8 to 45 5/8 after it said it added 10 million shares to its repurchase authorization.

SCPIE Holdings

(SKP)

fell 1 5/16 to 34 3/4 after it said it expects to repurchase up to 2 million of its own shares at $35 each under a Dutch auction completed at midnight on Wednesday.

UnitedGlobalCom

(UCOMA)

hopped 3 13/16 to 105 7/8 after it set a 2-for-1 stock split.

Analyst actions

Merrill Lynch said a three- to five-year upturn in the semiconductor market is beginning now and upped the industry's 2000 estimated revenue growth to 21.5%, from 18.6%. Twelve-month price targets were increased for these companies:

  • Analog Devices (ADI) - Get Report was upped to 71 from 53. Shares of Analog Devices popped 5 1/2, or 9.3%, to 64 1/2.
  • Applied Micro Circuits (AMCC) was upped to 102 from 83. Shares of Applied Micro added 1 1/2 to 86 5/8.
  • Broadcom (BRCM) was increased to 205 from 180. Broadcom soared 11 7/16, or 6.7%, to 180.
  • Conexant (CNXT) - Get Report was lifted to 70 from 44. Conexant jumped 5 3/8, or 9.1%, to 63 13/16.
  • Linear Technology (LLTC) was bumped up to 90 from 70. Linear mounted 5/8 to 75 9/16.
  • LSI Logic (LSI) - Get Report was upped to 73 from 62. LSI leaped 4 5/16, or 7.1%, to 65 1/16.
  • PMC-Sierra (PMCS) rose to 130 from 120. PMC-Sierra retreated 2 5/16 to 104 1/8.
  • Texas Instruments (TXN) - Get Report rose to 125 from 110. Texas Instruments bounced 4 1/16 to 101 7/16.
  • Vitesse Semiconductor (VTSS) climbed to 58 from 45. Vitesse shares hopped 5 7/16, or 11.1%, to 53 1/2.

Credit Suisse First Boston

raised its price target on

BEA Systems

(BEAS)

to 107. Shares of BEA gained 3 7/8, or 5.8%, to 70.

Credit Suisse downgraded

Beyond.com

(BYND) - Get Report

to hold from buy, citing recent management turnover as well as

Amazon.com's

(AMZN) - Get Report

announcement it will enter the software market. Meanwhile,

Goldman Sachs

started shares of Amazon.com at market outperform. Shares of Beyond.com slid 1 1/16, or 10.3%, to 9 3/16.

Salomon Smith Barney

reiterated a buy rating and a price target of 60 on Dell, whose shares mounted 2 1/16 to 43 7/16.

Salomon Smith Barney started coverage of

General Motors

(GM) - Get Report

with a neutral rating. General Motors slipped 1 1/8 to 69 13/16.

Warburg Dillon Read

started

Kroger

(KR) - Get Report

at buy and set a price target of 27. Kroger added 7/16 to 22 15/16.

Schroder

upped its price target on

Liberty Media

(LMG.A)

to 50 from 45. Liberty shares climbed 1 to 39 1/2.

ABN Amro

cut its rating on shares of

Micron Technology

(MU) - Get Report

to outperform from buy, saying the chipmaker was nearing a seasonal slowdown. Micron fell 2 1/8 to 75 11/16.

Bear Stearns

cut its rating on

Mirage Resorts

(MIR)

to neutral from attractive. Mirage Resorts lost 5/16 to 12 3/16.

Banc of America Securities

cut its rating

Novell

(NOVL)

to buy from market performer. Novell shares skidded 2 1/8, or 10.3%, to 18 7/16.

Bear Stearns upped its rating on

Robert Half

(RHI) - Get Report

to buy from attractive. Robert Half added 1/8 to 29 3/16.

Warburg Dillon Read started

Safeway

(SWY)

at strong buy and set a price target of 51. Shares of Safeway slipped 1/4 to 37.

Merrill Lynch slashed it long-term opinion on

Thermo Electron

(TMO) - Get Report

to a neutral from a buy. Shares of Thermo Electron lost 3/16 to 13 3/4.

Morgan Stanley Dean Witter

started coverage of

United Illuminating

(UIL)

at neutral. United Illuminating hopped 3/16 to 52 3/16.

Morgan Stanley Dean Witter started coverage of

Women.com Networks

(WOMN) - Get Report

at outperform. Shares of Women.com gained 3/4 to 19 3/8.

Miscellany

Rising costs for asbestos litigation and concerns over

McDermott International's

(MDR) - Get Report

the marine construction industry conspired to whack shares of the huge construction and energy services concern.

Shares plunged 4 15/16, or 26.7%, to 13 9/16, after McDermott reported second-quarter earnings of 6 cents a share. That figure was well below the First Call/Thomson Financial consensus estimate of 19 cents share, and down dramatically from the 85 cents reported in the year-ago quarter. McDermott reported net income for the quarter of $3.6 million on revenues of $596 million, down from net income of $51.6 million on revenues of $780 million a year ago.

Net cash and investments dropped to $55.2 million at the end of September, compared with $733.5 million in January. During the quarter McDermott

purchased the outstanding shares of its marine construction subsidiary

J. Ray McDermott

, eating up $526.6 million. In addition, in its earnings press release, the company disclosed it spent $69.7 million in the quarter "related to the settlement of non-employee products liability asbestos claims."

Recently McDermott's

Babcock & Wilcox

has seen demands to settle certain asbestos claims rising. If the firm is forced to continue settling these claims at higher amounts, that may have an adverse impact on the subsidiary's and McDermott's financial position and results, the company said.

Roger Tetrault, McDermott's chairman and chief operating officer, also noted that the marine construction market remains weak and is unlikely to recover before the first quarter of 2000.

--

Mavis Scanlon

Temple-Inland

(TIN)

inched up 1/8 to 60 3/8 after it it named Kenneth Jastrow as chairman and CEO, to succeed Clifford Grum when he retires Jan. 1.

The Heard on the Street column in

The Wall Street Journal

took a look at Internet companies' fondness for press releases and the often-volatile effect it can have on a company's stock. For instance, the story points out, Amazon.com shares jumped 20%, when the company

announced Monday it would make an announcement Tuesday. Shares then slid 9.2% on Tuesday when the less-than-stunning

news turned out to be its acquisition of a tool catalog company and entry into new markets.