SAN FRANCISCO -- You can't stop rock 'n' roll, but apparently you can stop the stock market (or, at least, slow it down). With the bond market again looking like
, a robust rally melted in the (reportedly) stifling heat on Wall Street.
Weak throughout the session, as fixed-income traders focused on an expected heavy supply of corporate issuance, the price of the 30-year Treasury bond fell 19/32 to 89 5/32, its yield rising to 6.04%. Equities ignored the bond market's ugliness for most of the session, suggesting the late-day downturn in equities was more a function of profit-taking after last week's record-setting gains.
Dow Jones Industrial Average
rose as high as 11,236.76 before closing off 4.12, or 0.04%, to 11,135.12. Similarly, the
slid 3.10, or 0.2%, to 1388.12 after trading as high as 1405.32 while the
Nasdaq Composite Index
, once as high as 2787.17, closed down 4.24, or 0.2%, to 2736.78.
While the aforementioned each failed to extend the recent string of records, the less-than-major
American Stock Exchange Composite Index
rose 2.47, or 0.3%, to an all-time best of 804.89.
But the better-known averages closed way off session highs owing to a late-day reversal in techs as well as daylong weakness in transports, drug makers and select cyclicals and a rout in precious-metals stocks.
The Dow got a big lift from
, which rose 4.5% after a favorable article in
and subsequent upgrade by
Warburg Dillon Read
also aided the average as energy and financial stocks were among the best-performing sectors. The
American Stock Exchange Oil & Gas Index
rose 2.1% while the
Philadelphia Stock Exchange/KBW Bank Index
gained 0.2% while the
American Stock Exchange Broker/Dealer Index
was the biggest drag on the blue-chip index as cyclical stocks in general (save energy) stumbled; the
Morgan Stanley Cyclical Index
Among tech bellwethers, weakness in
most heavily restrained the Comp. The
rose as high as 65 3/4 before closing up 0.6% to 63 7/8 as upgrades from
overshadowed negative comments from
BancBoston Robertson Stephens
Philadelphia Stock Exchange Semiconductor Index
, which also got a big lift from
, rose 0.6%.
TheStreet.com Internet Sector
index gained 0.96, or 0.1%, to 665.28 after trading as high as 689.16.
was the standout among Net bellwethers, resisting the late-session downturn. AOL gained 4.9% after
The New York Times
waxed effusive about the company in an article on Sunday.
soared 56.1% after announcing a four-year distribution deal with AOL.
Despite the DOT's struggles, market participants sought select Net names as they resumed the hunt for growth, or prospects thereof (be it real or imagined).
rose 18.7% on rumors of a buyout by
gained 13.8% after a 3-for-1 stock split took effect.
Among other online notables,
rose 19% and newly public Internet access provider
High Speed Access
jumped 11.3%; each enjoyed higher-than-expected volume.
In New York Stock Exchange trading, 723 million shares traded while declining stocks led advancers 1,588 to 1,439. In Nasdaq Stock Market activity, 1.14 billion shares were exchanged while gainers led 2,082 to 1,952. Net 52-week highs led news lows 152 to 36 in NYSE trading and by 244 to 24 in over-the-counter action.
Remain Calm, All Is Well
After the market's recent gains, today's action left market players a bit wary, but generally nonplussed.
"I hope today was not what we call a sucker's rally -- where you're up all day and the smart guys are selling into it," said Doug Myers, vice president of equity trading at
in Atlanta. "Toward the end of the day everyone was pinching themselves, wondering if it would hold. Then we saw bids slip a little -- someone was yelling 'Fire!' in a crowded theater, I don't know who, and everyone pushed for the exits."
Myers said there was "nothing specific" he could identify to cause the reversal, noting institutional investors "didn't feel any sense of urgency to be fully invested. They're not necessarily chasing things." That stood in stark contrast to last week, when "guys had to be invested. They couldn't miss this last run," the trader said.
But Myers isn't overly concerned, noting commodities and gold stocks remain weak, suggesting inflation is not resurfacing. Gold stocks got shellacked today as the
Bank of England
began the first of a series of auctions of its gold reserves; the
Philadelphia Gold & Silver Index
tumbled 6.1% as BOE sold 25 tonnes of the metal at $261.20 the ounce, a discount to spot market levels. In New York, gold futures fell 2.6% to $257.80, the lowest level since May 1979.
For other reasons, Gary Kaltbaum, chief technical analyst at
J.W. Genesis Securities
in Boca Raton, Fla., was equally sanguine.
the market is overbought, but it's going higher," Kaltbaum said. "Too many stocks are acting well and doing it in the face of higher rates. One day higher rates will hurt, but it hasn't happened yet. New highs have expanded, new lows contracted. I don't think much damage can happen unless the bond market crashes."
The technician noted volume last Wednesday was "extremely heavy" after the
meeting adjourned. Such a session "usually sets the stage for a move higher," he said. "We're on another leg higher."
Among other U.S. indices, the
added 0.04 to 456.55; the
Dow Jones Transportation Average
shed 38.04, or 1.1%, to 3477.95; and the
Dow Jones Utility Average
rose 1.05, or 0.3%, to 321.33.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
slipped 19.41 to 7235.04 and the
Mexican Stock Exchange IPC Index
fell 36.81, or 0.6%, to 5918.72.
Tuesday's Company Report
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.
stormed up 15 11/16, or 21.1%, to an all-time high of 90 following
yesterday's news that Franco-Belgian oil giant
made a $43 billion unsolicited bid for its smaller rival. TotalFina picked up 1 3/4 to 67 1/2.
Mergers, acquisitions and joint ventures
America Online grew 5 11/16 to 120 15/16 after agreeing to a four-year, $89 million alliance with drkoop.com, the Internet health-care network led by the former surgeon general. drkoop.com rocketed 13 1/4, or 56.1%, to an all-time high of 36 7/8 after
started coverage with buys. Also, as mentioned above,
The New York Times'
Sunday Money & Business section reported AOL is aiming to double its current subscriber base of 17 million over the next five years or so, and to more than triple average daily usage to three hours a day.
Books-A-Million surged 2 3/16, or 18.7%, to 14 on market chatter Borders might make a $21-a-share offer for the company. Last week, Books-A-Million formed a strategic alliance with
Cable & Wireless
flourished 2 15/16, or 7.8%, to 40 11/16 following a
of London story saying that
"are all believed to have made informal approaches in recent months to sound out C&W about a deal."
tacked on 1/16 to 32 9/16 after saying it's selling its 50% interest in
, a U.K. utility, to
for $700 million in cash. GPU added 1/4 to 42 1/4.
lowered 5/16 to 63 7/8 after rejecting
$68-a-share takeover offer. NiSource slipped 5/16 to 26 1/4.
dropped 1 1/16, or 23.6%, to 3 15/32 after
agreed to buy the company's service and repair unit for $30 million. Separately, EFTC said it expects to lose 15 cents to 20 cents a share in its second quarter, primarily due to softness in its services business and revenue shortfalls in its manufacturing business. Jabil tacked on 15/16 to 47.
expanded 1 11/16, or 7.4%, to 24 9/16 after receiving a $1.8 billion cash bid from Dutch foods group
Earnings/revenue reports and previews
rose 1 to 63 3/4, following an earlier high of 65 15/16, ahead of its scheduled second-quarter earnings report tomorrow. The 16-analyst forecast calls for earnings of 63 cents a share vs. the year-ago 62 cents.
, expected by 21 analysts to post second-quarter earnings of 8 cents a share after tomorrow's closing bell, lowered 3 to 175 1/8 after an earlier high of 189 1/4. The company earned a penny in the year-ago quarter.
sliced off 1 13/16 to 39 5/8 even after posting fourth-quarter earnings of 37 cents a share, beating the 22-analyst estimate by 2 cents and moving up from the year-ago 30 cents.
tumbled 3 3/16, or 23.3%, to 10 1/2 after saying it sees second-quarter earnings of 4 cents to 6 cents a share, which would fall below the four-analyst forecast for 11 cents and the year-ago 9 cents. The company cited its failure to close key orders for electronic-bonding gateways with potential competitive local exchange carriers.
gave up 5/16 to 42 1/2 after recording second-quarter earnings of 61 cents a share, beating the five-analyst view by 2 cents but falling below the year-ago 66 cents.
picked up 3/8 to 49 1/8 after reporting second-quarter earnings of 16 cents a share, 2 cents higher than the nine-analyst view and a repeat of the year-earlier figure.
swelled 3 11/16, or 15%, to 28 3/8 after saying it expects second-quarter earnings to come in above the four-analyst prediction of 25 cents a share thanks to strong sales. The company made 23 cents in the year-ago quarter.
advanced 3/4 to an all-time high of 21 1/4 after
Donaldson Lufkin & Jenrette
started coverage with a buy. Merrill Lynch and
Deutsche Banc Alex. Brown
also started coverage with buys.
, which owns 35% of Azurix, surged 2 5/8 to an all-time high of 83 7/8.
sloughed off 1 7/8, or 13.5%, to 12 after
downgraded it to neutral from buy.
flew 2 11/16, or 17.6%, to 18 1/16 after BancBoston Robertson Stephens initiated coverage with a buy.
General Motors revved up 3 1/16 to 71 11/16 after Warburg Dillon Read raised the stock to strong buy with a price target of 91. The firm, saying it expects U.S. auto sales to remain strong in the coming months, also lifted its 2000 earnings estimate to $8.76 from $8.67 a share. Separately,
lowered 1/16 to 37 15/16 after receiving three contracts from GM to provide management information services.
Intel gained 3/8 to 63 7/8, following an earlier high of 65 3/4, after Merrill Lynch upgraded the stock to near-term buy from accumulate and Prudential Securities upped it to strong buy from accumulate. BancBoston Robertson Stephens, meanwhile, lowered its second-quarter, 1999 and 2000 earnings estimates for the chipmaker, citing less-than-expected unit volume.
James J. Cramer
explored the implications of the moves.
tanked 1 3/4, or 20.6%, to 6 3/4 after
slashed the stock to market perform from outperform.
hopped up 1 1/4 to 28 11/16 after
Credit Suisse First Boston
lifted it to strong buy from buy.
climbed 4 3/4, or 7%, to an all-time high of 72 1/2 after Credit Suisse First Boston initiated coverage with a strong buy.
swelled 2 3/8, or 9.5%, to 27 3/8 after Donaldson Lufkin & Jenrette raised the stock to top pick from buy.
excelled 4 1/4 to an all-time high of 103 1/4 following last week's announcement that it will give customers $400 rebates on new PCs if they sign up for three years of
Internet service. Within the sector,
popped 4 1/4, or 5.8%, to an all-time high of 77 1/4 and
popped 2 3/16, or 9%, to 26 5/8 on excitement over similar rebate programs.