Blue-Chips, Tech and Health Care Lead the Way Down

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The market this midday is ugly and uglier.

Instead of

Jim Carrey

and

Jeff Daniels

, the stars of the current calamity are international near-panic and deepening tech-stock nervousness. In the supporting cast, the U.K. announced it definitely won't join the European monetary union in the 1999 first round,

Morgan Stanley Dean Witter's

Barton Biggs

made a sharply negative squawk-box call on Asia -- and if those weren't bad enough, it's the 10th anniversary of Black Monday on the lunar calendar.

The

Dow Jones Industrial Average

around 11 a.m. EST made a feeble stab at returning to the crucial 7600 support level but failed, plunging 185.66, or 2.4%, to 7529.75 by 11:30. The blue-chip index then recovered considerable ground, but even at the noon price of 7600 the Dow was 8% short of its Aug. 6 high of 8259.31 and closing in fast on the widely accepted 10% "correction" level.

Merck

(MRK) - Get Report

,

Alcoa

(AA) - Get Report

,

Procter & Gamble

(PG) - Get Report

and

IBM

(IBM) - Get Report

were among the downside leaders, while

3M

(MMM) - Get Report

,

Exxon

(XON) - Get Report

,

Wal-Mart

(WMT) - Get Report

,

Coca-Cola

(KO) - Get Report

and

Philip Morris

(MO) - Get Report

clung to narrow gains.

The news was still worse on the tech-albatrossed

Nasdaq Composite Index

, which had collapsed 54, or 3.3%, to 1596 as investors fled tech stocks of all types. The Comp, on pace to post its worst point loss ever if it doesn't turn around, was off 8.6% from its Oct. 9 high of 1745.85.

Intel

(INTC) - Get Report

,

Microsoft

(MSFT) - Get Report

,

Cisco

(CSCO) - Get Report

and

Dell

(DELL) - Get Report

were among the many, many Nasdaq stocks posting losses of more than 2 points.

Elsewhere around noon, the broad

S&P 500

was down 17, or 1.8%, to 925 and the small-cap

Russell 2000

was off 13, or 2.8%, to 434. Decliners were crushing advancers by a 25-to-3 margin on the

New York Stock Exchange

and a 37-to-6 gap on the Nasdaq. The morning flight to the quality of the bond market evaporated, with the 30-year Treasury's price steady at 101 3/8 and the yield at 6.27%.

Mike Driscoll, a block trader at

Hambrecht & Quist

, said the hair-trigger selloff in the tech sector is no surprise. "A lot of technology names are trading at really high multiples, leaving very little room for disappointments," he said.

But Driscoll said the domestic reaction to the continuing Hong Kong debacle and its international spillover is overdone. "When the U.S. catches a cold, the overseas markets get pneumonia," he said. "What do you do, pile your money into Argentina because it looks like its gonna outperform Brazil? It may be ugly, it may be sloppy for a few days, but when the smoke clears, who are you gonna want to own,

McDonald's

or

Coke Femsa

?"

Not much of a question today. McDonald's

(MCD) - Get Report

was down 1/2 to 46 5/8 and Coca-Cola Femsa

(KOF) - Get Report

. Around noon the stock had been hit with the old forced stock split, slashed 38 13/165, or 56.5%, to 29 15/16. Oxford brought on the long knives with its announcement this morning that it expects a third-quarter loss of 83 cents to 88 cents per share, not the 47-cent profit forecast in the

First Call

analyst survey.

"It's not a complete shock," said Joel Ray, an analyst at

Wheat First Butcher Singer

in Richmond, Va. "Oxford was just growing at a horrific pace, and it just outpaced their computer systems."

Ray had not yet joined the large flock of analysts downgrading Oxford, continuing for the moment to rate it neutral. "I have no doubt that eventually they'll have a shot at cleaning this up," he said, projecting it will take a year or two. In the meantime, "We're trying to figure out the takeout value on this thing," he said. Ray said Oxford could fetch a takeover price in the "low to mid-30s, possibly upper 30s. That's going to help put a floor under the stock."

Other health-care stocks were taking a harsh drubbing off the Oxford news, but Ray said that's likely to create buying opportunities in companies that don't face Oxford's systems woes or are farther along in addressing them. He declined to offer any specific candidates until he's completed reviewing the situation.

Among Oxford's peers,

WellPoint Health Networks

(WLP)

was down 7 7/16 to 48 7/16,

United HealthCare

(UNH) - Get Report

was down 4 13/16 to 46 13/16,

Aetna

(AET)

was down 2 1/4 to 73 1/8 and

Columbia/HCA Healthcare

(COL)

was down 15/16 to 28.