Brokerages, Net Stocks Tick Higher in Pre-Holiday Action

A muted session sends traders off to await Santa's arrival.
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After a surprisingly hectic week, Wall Street finally acted like it's supposed to in pre-holiday trading. Major proxies ended mixed as stocks sauntered quietly through a shortened session.

Blue-chip technology stocks faltered but select Internet names (naturally) remained alluring to investors. In the material world, financial and consumer-focused leaders were strong (but not Herculean), while drug makers, transports and energy concerns exhibited modest weakness.

The

Dow Jones Industrial Average

was the best performer of major gauges, closing up 15.96, or 0.2%, to 9217.99. The blue-chip proxy overcame an early decline to as low as 9178.60 but closed off its intraday high of 9245.54.

IBM

(IBM) - Get Report

and

J.P. Morgan

(JPM) - Get Report

were the strongest Dow components, the latter evincing the strong overall session for financial stocks. The

Philadelphia Stock Exchange/KBW Bank Index

slid 0.2% but the

American Stock Exchange Broker/Dealer Index

gained 2.5%.

The

S&P 500

rose as high as 1229.72 but saw its string of record-setting closes ended at three, falling 2.27, or 0.2%, to 1226.27.

Hamstrung by weakness in big tech names such as

Cisco

(CSCO) - Get Report

and

Microsoft

(MSFT) - Get Report

, the

Nasdaq Composite Index

also fell from historic heights, shedding 9.50, or 0.4%, to 2163.04.

The

Russell 2000

managed to rise 0.78, or 0.2%, to 405.57.

"There's not a helluva lot going on," said Jim Volk, co-head of institutional trading at

D.A. Davidson

in Portland, Ore. "The

Dow is up but quietly rallying before Christmas. The market is seasonally strong except for the little down drift a few days ago."

Volk said he expects more quietude in the coming week but with the positive drift continuing. "It looks like people want to the market to continue to rally into the end of the year," he said. "But my sense is most major accounts are done for the year, especially the big hedge funds."

In

New York Stock Exchange

trading, 249.6 million shares were traded while advancers bested declining stocks 1,471 to 1,298. In

Nasdaq Stock Market

activity, 447 million shares were exchanged while gainers led 1,983 to 1,738. New 52-week highs bested new lows 95 to 28 on the Big Board and by 75 to 45 in over-the-counter trading.

Internet Madness Takes No Holiday

Micron Technology

(MU) - Get Report

was a highlight among traditional tech names, falling 3.2% despite late yesterday posting a narrower-than-expected first-quarter loss. But Micron was up 22% since Dec.1 heading into today, double the gain of the

Philadelphia Stock Exchange Semiconductor Index

, so some retrenchment was due.

While the

Nasdaq 100

slid 0.7%,

TheStreet.com Internet Sector

index rose 0.4%. Gains by

Infoseek

(SEEK)

and

@Home

(ATHM) - Get Report

led the index but much of the excitement today in secondary and tertiary names.

Delia's

(DLIA)

climbed 67% after announcing it will expand its online offerings to include a store at

Yahoo!'s

(YHOO)

shopping site.

Meanwhile,

CVF Technologies

(CNV)

rose 43% after announcing it will begin selling its herbal and nutritional products online. Also notably higher on even the hint of online developments were

PC Connection

(PCCC)

, higher by 65%;

SkyMall

(SKYM)

, which gained 110%; and

Internet America

(GEEK)

, up a further 42%.

On the flip side,

Multiple Zones

(MZON)

slid 47% and

uBid

(UBID)

shed 35%; both enjoyed big gains

yesterday.

"Anybody who would argue the Internet stocks are not in the midst of a speculative bubble is blind," Richard Bernstein, chief quantitative analyst at

Merrill Lynch

, said in an interview earlier this week. "It's the biggest speculative bubble of our lifetime. A moose bubble."

Bernstein is not convinced (as are others) the action in Net stocks portends a disaster for the market as a whole. "You can make a doomsday scenario out of anything, but there have been speculative bubbles of smaller proportions that have not affected the broader market," he said.

Nonetheless, the quant maven said what is going on in Netland is "mind-boggling" and believes (as do most) that it will end badly. "All that has to happen is

Wal-Mart

(WMT) - Get Report

decides to open a Web site and it's all over for most retailers on the Web," he said. "Yes, there is the psyche of the Net community but ultimately is comes down to who has the best price. When it comes to commodity distribution, nobody does it better than Wal-Mart and they can undercut everybody because of existing agreements. With that lurking out there, it amazes me what's going on."

At least we're not alone.

Among other indices, the

Dow Jones Transportation Average

fell 10.15, or 0.3%, to 3044.08; the

Dow Jones Utility Average

lost 0.51, or 0.2%, to 314.54; and the

American Stock Exchange Composite Index

gained 1.71, or 0.3%, to 666.49.

For the week, the Dow industrials rose 314.36, or 3.5%; the S&P 500 gained 40.24, or 3.4%; the Nasdaq Comp rose 78.90, or 3.8%; the Russell 2000 added 8.15, or 2.1%; TheStreet.com Internet Index gained 52.06, or 13.8%; the Dow transports rose 35.04, or 1.2%; the Dow utilities added 1.25, or 0.4%; and the Amex Composite climbed 15.24, or 2.3%.

The 30-year Treasury bond, in which trading closed at 2 p.m. EST, was down 19/32 to 100 15/32, its yield rising to 5.22%.

Elsewhere in North American equities today, the

Toronto Stock Exchange 300

advanced 18.41 to 6465.40 and the

Mexican Stock Exchange IPC Index

leapt 71.06, or 1.8%, to 4001.35. For the week, the TSE 300 rose 112.08, or 1.8%, and the IPC gained 160.11, or 4.2%.

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.

)

On the day before Christmas, as noted earlier, those young, enthused Internet stocks continued to outlast just about everyone else, ready for a big meal, a few gifts and some major z's.

  • CVF Technologies shot up 1 13/16, or 43.3%, to 6 on news of its Web site for the sale of nutritional and herbal supplements.
  • Delia's, a clothing retailer for teens and young adults, soared 7 1/4, or 66.7%, to 18 1/8 on word of its new store on Yahoo!, which slipped 2 9/16 to 247 1/8.
  • Multiple Zones gave back 26 1/4, or 46.8%, to 29 1/2 after yesterday's 396% rise on news the direct marketer of computer products will launch an online auction site.
  • To be a Net play nowadays, you don't even have to say you're thinking of opening a business on the Web; you can actually say you're not thinking of opening a business on the Web. Just say something Weblike and you're good to go. Playboy (PLA) took in 2, or 10.2%, to an all-time high of 21 5/8 on market chatter about a possible offering of the company's Internet unit even after Playboy executives said the company has no current plans for such a move.
  • SkyMall vaulted 6 5/8, or 110%, to an all-time high of 12 9/16 after the company's Web potential was discussed on the Internet.
  • Zapata (ZAP) lost 1 7/8, or 13.2%, to 12 3/8 after yesterday's spike upward on news of the company's revived plans to open an Internet business.
  • Ziff-Davis (ZD) jumped 4 7/8, or 30.7%, to an all-time high of 20 3/4 after Tuesday saying it filed with regulators for an IPO for its ZDNet Internet business.
  • Among those soaring for no reason other than being privileged enough to somehow be connected to the Internet were: PC Connection, an online software and computer products retailer, which hopped 8 3/4, or 64.8%, to 22 1/4; Internet America, an Internet service provider, which hopped 12 15/16, or 41.6%, to an all-time high of 44; Egghead.com (EGGS) , which hopped 1 1/16 to 23 3/4; and @Home, which hopped 9 1/16, or 12.6%, to an all-time high of 80 7/8.

Mergers, acquisitions and joint ventures

Aames Financial

(AAM)

added 1/16 to 2 9/16 after last night saying

Capital Z Financial Services Fund

agreed to make an equity investment of up to $100 million in the company.

Adelphia Communications

(ADLAC)

lifted 2 1/8, or 5%, to an all-time high of 44 1/2 after yesterday agreeing to buy

Verto Communications

and merge the company into a subsidiary.

Borders

(BGP)

scored 2 3/16, or 10.4%, to 23 3/16 after the

Federal Trade Commission

announced yesterday it's seeking more information on Borders competitor

Barnes & Noble's

(BKS) - Get Report

$600 million proposed acquisition of book distributor

Ingram Book Group

. Barnes & Noble rose 1 1/16 to 35 1/2.

Ford

(F) - Get Report

took in 1/2 to 58 7/8 on word from

ING Baring Securities

the automaker sold its 9% stake in South Korea's

Kia Motors

to J.P. Morgan for $11.3 million. ING Baring handled the transaction.

Kevco

(KVCO)

advanced 1 5/16, or 19.6%, to 8 3/8 on news privately held

Wingate Partners II

will acquire the company for $40 million in stock and warrants. Kevco also said it sees a fourth-quarter loss. The two-analyst forecast called for a breakeven quarter compared to the year-ago profit of 3 cents.

Rutherford-Moran Oil

(RMOC)

shot up 1 3/16, or 61.3%, to 3 1/8 after late yesterday

Chevron

(CHV)

agreed to acquire the company for $91 million in stock and the assumption of $302 million in debt. Chevron shed 5/16 to 84 11/16.

Earnings/revenue reports and previews

Community First Bankshares

(CFBX)

lowered 13/16 to 20 1/8 after saying late yesterday it will take a fourth-quarter charge of $10 million, or 14 cents a share, on the liquidation of its subprime lending units.

Micron Technology fell 1 3/4 to 52 1/4 after the chip maker

late yesterday announced a first-quarter loss of 19 cents a share vs. the year-ago profit of 3 cents. The loss did beat estimates for a loss of 28 cents. Today,

Credit Suisse First Boston

upped its 1999 estimates on Micron and raised the stock's price target to 70 from 65 a share.

Northwest Natural Gas

(NWNG)

, a Portland, Ore.-based utility, tumbled 1 3/16 to 26 5/8 after warning its fourth-quarter profit will be 2 cents below the four-analyst view of 79 cents. In the year-ago period, the company made 78 cents.

Analyst actions

Americal Online

(AOL)

, to be added to the S&P 500 on the last day of 1998, declined 1 3/8 to 136 5/8 after Credit Suisse First Boston cut it to buy from strong buy based on stock appreciation.

Bindley Western Industries

(BDY)

added 9/16 to 46 1/4 after

Goldman Sachs

started coverage with a market outperform.

Dawson Geophysical

(DWSN) - Get Report

slid 3/16 to 7 7/16 after

Raymond James

dropped it to neutral from buy.

Sotheby's

(BID) - Get Report

brought in 4 1/2, or 13.4%, to an all-time high of 38 after

Merrill Lynch

raised it to near-term accumulate from neutral, while maintaining its long-term buy, earlier this week. The auction house refused comment on its stock movement.

Total Renal Care Holdings

(TRL)

expanded 1 5/16, or 5.3%, to 26 1/8 after

Hambrecht & Quist

upgraded it to strong buy from buy.

Miscellany

ValueVision

(VVTV)

climbed 1/2, or 9.1%, to 6 after late yesterday settling a lawsuit filed by

Time Warner

(TWX)

and saying it will record a fourth-quarter charge of $4.3 million to cover the settlement. Time Warner rose 1 to an all-time high of 62 3/8.