Wall Streeters went shopping in the large-cap market after
yesterday's fire sale, generating the highest
New York Stock Exchange
volume in nearly three weeks and sending beaten-down tech stocks thundering higher.
Nasdaq Composite Index
more than retraced yesterday's 29.30-point decline, bouncing 37.37, or 2.2%, to 1753.12. The large-cap
did better still, rising 37.33, or 3.2%, to 1210.90 after yesterday shedding 13.42. Influential and mercurial
"Look on my works, ye mighty, and despair!"
sparked the rally's big finish with positive comments on the chip sector, helping
jump 2 13/16 to 69 13/16. The
Philadelphia Stock Exchange Semiconductor Index
(SOX) rose 11.04, or 4.8%, to 243.66.
In a research note, Kurlak wrote that December could be a pivotal month in reversing the current downtrend in semis. He advised intermediate-term investors to stay out of the group and re-enter in the fall or winter, but he said longer-term investors should start establishing positions now. "It just sounds like he's warming up to the stocks," one Nasdaq trader said. "He's giving the body language that if you don't mind being early, it's a good investment. The SOX has exceeded his downside target."
Dow Jones Industrial Average
swerved all over the screen but finished with a gain of 37.36, or 0.4%, to 8665.29. Investors sought the safety of consumer nondurable and pharmaceutical stocks, among others. Leading the Dow were
, up 2 5/8 to 126 5/8, and
Procter & Gamble
, up 2 9/16 to 87 3/8. The downside leaders were
. The broader
advanced 10.57, or 1%, to 1087.58, and the small-cap
improved 4.51, or 1%, to 438.37.
Among other indices, the
Dow Jones Transportation Average
rose 23.55, or 0.7%, to 3360.17; the
Dow Jones Utility Average
lost 1.02, or 0.4%, to 290.99; and the
American Stock Exchange Composite Index
gained 4.78, or 0.7%, 688.66.
NYSE advancers overmatched decliners by 1,840 to 1,149 on 669 million shares, the highest volume since investors bought another dip
May 27. New Big Board lows continued to wash over new highs, by 174 to 35. On the
Nasdaq Stock Market
, 2,538 advancers topped 1,757 decliners on 686.2 million shares. New Nasdaq lows swamped new highs by 213 to 34.
"It's a welcome correction," said Larry Rice, chief investment strategist at
, reflecting on yesterday's activity and today's modest snapback. "More damage than I would have liked to have seen in the breadth, but less damage than I would have liked to have seen in the big-caps. Ideally, one would have hoped for a deeper correction in the blue-chips. That's where your real overvaluation has been."
Rice said the fundamental underpinnings of the recent decline, focused on the Japan-led woes in Asia, aren't going away anytime soon. "They're going to try to salvage the Japanese situation, but intervention, as we know, never works," he said. "They may try to talk the dollar down, talk the yen up, but that's only on a near-term basis."
With the Dow and the S&P 500 still trading at what Rice considers bloated multiples of expected 1998 earnings, the strategist said he won't think much of any upward move unless it broadens out to include smaller stocks. "If it's going to be
DELL and Intel and
DIS and so on, those same 20 names, then I'm going to be back here saying the same thing two or three weeks from now," he said. "I'm going to want to lighten up."
Market players lightened up on bonds with a vengeance, as the dollar finally encountered some strength in the free-falling yen. The benchmark 30-year Treasury tumbled 1 3/32 to 106 24/32, its yield rising to 5.65%.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
gained 39.18, or 0.6%, to 7143.71 and the Mexican
bounded 76.98, or 1.9%, to 4125.97.
Tuesday's Company Report
Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified
IBM lapsed 2 1/4 to 110 after Merrill Lynch cut its second-quarter earnings estimate to $1.45 from $1.52 per share and its 1998 forecast to $6.35 from $6.45 per share. The firm cited a strong dollar for the cuts. Separately,
announced a marketing agreement in which an IBM unit will pre-install AOL software on two lines of its computers. AOL jumped 3 7/8 to 89.
Merrill also slashed its 1998 earnings estimate on
to $1.60 per share from $1.65 and its 1999 forecast to a range of $1.80 to $1.85 per share from a range of $1.90 to $1.95 per share. Coke lowered 5/16 to 79.
Earnings reports and previews
plummeted 10 1/2, or 27.5%, to an annual low of 27 11/16 after saying it sees second-quarter earnings of 30 cents to 32 cents per share. The 11-analyst estimate called for earnings of 47 cents versus the year-earlier 49 cents. The company's CEO said rising costs and slower-than-expected recovery in its gross margin in France were to blame.
Coast Dental Services
gave up 3 1/4, or 18.3%, to 14 3/4 after warning that because of expansion costs it expects to report second-quarter earnings of 16 cents or 17 cents per share. The nine-analyst prediction called for earnings of 19 cents compared with the year-ago 12 cents.
sank 7/8, or 14.9%, to an annual low of 5 after warning
last night it expects to report second- and third-quarter earnings below previously anticipated figures.
lowered it to hold from buy.
tumbled 3/4, or 14.3%, to an annual low of 4 1/2 after late warning late
yesterday that it sees second-quarter earnings 50% to 60% below last quarter's 12 cents per share.
plunged 7 1/2, or 13.3%, to 48 3/4 after saying that disappointing results in its bed division and larger than expected provisions for bad debts will result in lower-than-anticipated second-quarter earnings. The seven-analyst forecast called for 88 cents compared to the year-ago 80 cents.
Credit Suisse First Boston
cut it to hold from buy.
rose 3 5/8, or 9.8%, to 40 5/8 after late
yesterday announcing third-quarter earnings in line with estimates and an alliance with
. Ingram Micro advanced 2 1/4, or 6%, to 40.
skidded 1 9/16, or 8.6%, to an annual low of 16 3/4 after announcing that it expects second-quarter earnings of 24 cents to 26 cents per share because of weak market conditions in its industrial-products unit. The two-analyst forecast called for a repeat of last year's 35 cents.
descended 2 15/16, or 7.5%, to 36 1/8 after reporting first-quarter earnings of 16 cents per share, beating the 14-analyst estimate by 2 cents and the year-ago loss by 19 cents.
climbed 13/16, or 6.6%, to 13 1/8 after late yesterday reporting third-quarter earnings of 10 cents per share, beating the two-analyst prediction of 6 cents and the year-ago loss of 22 cents.
slumped 1 11/16, or 6.5%, to 24 4/16 after saying
last night it expects to report second-quarter earnings 10 cents per share below expectations.
H. J. Heinz
added 7/8 to 54 1/8 after posting fourth-quarter operating earnings of 53 cents per share -- missing the 17-analyst estimate by a penny but beating the year-ago 50 cents. The company said it's targeting 10% to 12% earnings growth for 1999. Separately, Heinz agreed to buy
line of canned broth. Terms of the deal weren't disclosed.
shed 15/16 to 20 after late
yesterday warning of disappointing second-quarter earnings.
Mergers, acquisitions and joint ventures
tacked on 1 3/4, or 12.1%, to 16 9/16 after announcing it will participate in
upcoming Internet fashion project, which is being co-developed with Intel and is designed to personalize online interactive experiences for young women. Yesterday, ModaCad reported a first-quarter loss of 32 cents per share, below the single-analyst estimate of a 5-cent loss and the year-ago loss of 4 cents.
vaulted 3 5/16, or 11%, to 33 1/2 after
said it will acquire the company in stock deal valued at $1 billion. United Rentals climbed 2 3/8, or 7.1%, to 35 3/4.
sailed 1 3/4 to 62 3/4 after agreeing to buy
division for $2.1 billion. Pfizer rose 1 3/4 to 109 3/4.
sprung 1 11/16 to 47 1/16 after the
$3.8 billion acquisition of the company. Alcoa, which had to agree to sell its cast plate operations to clear the deal, slipped 5/8 to 63 1/8.
Offerings and stock actions
Old Kent Financial
advanced 1 1/16 to 38 1/2 after the company said late yesterday that it plans to buy back 6 million shares of stock.
rose 3 5/8, or 11.1%, to 36 3/8 after Credit Suisse First Boston started coverage at buy.
ascended 1 1/16, or 10.2%, to 11 7/16 after the firm began coverage at buy, and
jumped 7/8 to 22 7/8 after the firm started coverage at hold.
Union Pacific Resources
increased 3/4 to 17 3/8 after
Salomon Smith Barney
upgraded it to buy from neutral.
Young & Rubicam
jumped 1 3/16 to 29 1/8 after Salomon Smith Barney initiated coverage at buy with a price target of 37.
hangover lasted all day, as the company prepared for a fight with its ousted CEO,
"Chainsaw Al" Dunlap
, over what kind of severance package he will get. The stock plunged 1 7/8, or 11.9%, to 13 7/8.
flew 1, or 8.1%, to 13 1/2 after saying trials of its drug
caused regression of tamoxifen-resistant breast cancer tumors in rats.
shot up 4 5/8, or 6.3%, to 77 13/16 after
each invested $212.5 million for a 10% stake in
, the high-speed cable-modem joint venture of Time Warner and
. MediaOne tacked on 13/16 to 36 3/4, Microsoft hopped 3 15/16 to 89 7/8 and Compaq took in 1 3/16 to 28 5/16.
Dell expanded 4 3/4, or 5.9%, to 84 31/32 after saying it's talking to Microsoft about custom-designing PCs.
gained 1 1/8 to 43 3/16 after announcing that its
Brown & Root Energy Services
unit won a 10-year contract to provide
with drilling products and services in the Gulf of Mexico. Terms weren't disclosed. Chevron rose 1 13/16 to 81 1/4.
Senior Markets Writer Justin Lahart contributed to this story