Dow 10,000 Elusive Today
Now what, indeed.
When the
Dow Jones Industrial Average
secured its first-ever close above 10,000
yesterday , many market players questioned if the five-figure level could be sustained. So far this morning, the answer is a resounding "no."
A warning about lower-than-expected sales shortly
after the close yesterday by Dow member
Coca-Cola
(KO) - Get Report
pretty much assured a weak opening this morning. Throw in the
Federal Open Market Committee's
meeting today, the warfare in Kosovo, and the fact 10,000 is a darned lofty level, and it's not so surprising stocks are in retreat.
The Dow was lately down 86 to 9920, having traded as low as 9874.41 in the early going. Coca-Cola was by far the biggest drag on the index, lately down 3%.
Goldman Sachs
removed the beverage giant from its recommended list and
Morgan Stanley Dean Witter
cut its earning estimates.
"Look at when Coca-Cola came out, a few minutes after the close" said one trader. "If it had been before, there's no way we would have closed over 10,000
yesterday. I find that curious."
The trader, who is short
S&P 500
futures, conceded Coca-Cola may have waited until after the bell in the hope the announcement would get lost in the Dow 10,000 shuffle. If so, there was no such luck.
Elsewhere, the S&P 500 was off 7 to 1303, while the
Russell 2000
was down fractionally at 400.
However, technology bellwethers and Internet stalwarts were able to overcome the early misgivings. The
Nasdaq Composite Index
was recently up 10 to 2503 after trading as low as 2477.62 in the opening moments of the session.
Sun Microsystems
(SUNW) - Get Report
and
Cisco
(CSCO) - Get Report
were leading the Nasdaq higher.
TheStreet.com Internet Sector
index was up 10 to 664, led by
America Online
(AOL)
, up 10% after
PaineWebber
reiterated its buy rating and upped its price target to $215. Other Net leaders such as
Amazon.com
(AMZN) - Get Report
and
Yahoo!
(YHOO)
were also on the rise. However,
TheStreet.com E-Commerce Index
was down 1 to 112.
The continued strength of high-profile tech names as well as a solid performance this morning by the transports -- the
Dow Jones Transportation Average
was lately up 46 to 3340 -- has some players confident any slide from yesterday's gains will be modest, at worst. Others, however, are less constructive.
"We need to nominally pull back to 9500 or we're on borrowed time," Ronny Kraft, CEO of
Gotham Capital Management
, said late yesterday in the wake of the Dow's historic close. "The earnings needed to support these levels are not going to be there."
As the FOMC meeting proceeds, the price of the 30-year Treasury bond was lately up 7/32 to 94 18/32, its yield dipping to 5.63%.
9:59 a.m.: Stocks Drop After Monday's Historic Close
The
Dow Jones Industrial Average
tumbled early on after
yesterday's historic close above 10,000, while the rest of the market's major averages also opened on the downside.
The Dow was down 132 to 9875. Dow component
Coca-Cola
(KO) - Get Report
, which yesterday said it expects worldwide sales to drop up to 2% in the first quarter, was down 3, or 5%, to 61 13/16. The beverage titan also said it doesn't expect to meet its 7% to 8% annual volume growth target in 1999.
Meanwhile in Washington, the
Federal Open Market Committee
is meeting. The FOMC is expected to stand pat on short-term interest rates.
The
S&P 500
was down 15 to 1296. The
Nasdaq Composite Index
was down 15 to 2478. The
Russell 2000
was down 2 to 398.
TheStreet.com Internet Sector
index was up 4 to 650.
TheStreet.com E-Commerce Index
was down 2 to 111.
The 30-year Treasury bond was up 13/32 to 94 24/32, yielding 5.62%.
Most Up at Open -- NYSE
Vodafone (VOD) - Get Report, up 2 13/16 to 181 1/4
.
Most Up at Open -- Nasdaq
AboveNet (ABOV) , up 13 1/8 to 94
: The company set a 2-for-1 stock split.
Most Down at Open -- NYSE
EMC (EMC) , down 2 to 127 5/8
.
Most Down at Open -- Nasdaq
Avid Technology (AVID) - Get Report, down 6 5/8 to 17 3/4
: The company restated third-quarter results to a net loss of 89 cents a share from a loss of $5.97 a share.
Prudential Securities
downgraded the stock to hold from accumulate.
