Dow Heading Toward Another Record Close

Meanwhile, the Internet sector is getting hammered.
Author:
Publish date:

The small-cap

Russell 2000

was outperforming the rest of the market's major barometers, while the blue-chip

Dow Jones Industrial Average

was in record territory heading into the final hour of trading.

Meanwhile, selling intensified in the tech arena, sending the

Nasdaq Composite Index

down 33, or 1%, to 2550. Despite the tech selloff, market breadth remained decidedly positive.

The Russell 2000 rose 4, or 1%, to 421.

The Dow was up 94 to 10,489. Powering the Dow was

J.P. Morgan

(JPM) - Get Report

, which has risen 8 3/8 to 137 11/16. The bank posted first-quarter earnings of $3.01 a share, blowing away the

First Call

11-analyst estimate of $1.73.

Cyclical names were big gainers in the Dow.

Big-cap stocks were suffering. The

S&P 500

was down 9 to 1340.

Ricky Harrington, senior vice president and technical analyst at

Interstate/Johnson Lane

, pointed out the shift in leadership away from traditional market leaders and now in part into cyclicals and some financials. The question now is whether that shift will last. Harrington doubts it will.

The shift away from the market's leaders, and the extreme speculation in the market, particularly in Internet stocks, are a couple of signs of the last legs of a bull cycle, Harrington said, and often precedes a downturn in the market.

Harrington also talked about the issue of liquidity, which has been the driving force in the market.

"Still, the big question is how much money is on the sidelines?" asked Harrington. He said the question of how much money is on the sidelines is something that is "difficult to get a handle on."

TheStreet.com Internet Sector

index was down 62 to 714, while the

TheStreet.com E-Commerce Index

was down 6 to 140.

The 30-year Treasury bond was down 6/32 to 96 8/32, yielding 5.51%.

On the

New York Stock Exchange

, advancers were beating decliners 1,913 to 1,094 on 757 million shares. On the

Nasdaq Composite Index

, winners were beating losers 2,249 to 1,793 on 1.162 billion shares.

On the NYSE, 99 issues had set new 52-week highs while 45 had touched new lows. On the Nasdaq, 155 stocks had set new highs while 82 touched new lows.

On the Big Board,

Compaq

(CPQ)

was most active, with 25 million shares changing hands. It was up 3/16 to 24 1/16.

On the Nasdaq,

Intel

(INTC) - Get Report

was most active, with 44 million shares changing hands. It was down 2 7/8 to 57 3/4.

1:54 p.m.: J.P. Morgan Pushes Dow Into Record Territory

Powered by

J.P. Morgan

(JPM) - Get Report

, the

Dow Jones Industrial Average

was soaring this afternoon and in record territory, while market internals were strong.

J.P. Morgan soared 9 3/8 to 138 11/16, accounting for 42 points of the Dow's gain. The investment bank reported first-quarter earnings of $3.01 a share, blowing away the

First Call

11-analyst estimate of $1.73.

The Dow was up 103 to 10,498. The Dow peaked at 10,526.54, before fading off that level.

But of the major market indices, the recently resurgent small-cap

Russell 2000

was outpacing everyone, soaring 7, or 2%, to 424.

The

S&P 500

was down 2 to 1348.

The

Nasdaq Composite Index

was down 10 to 3574.

Internet stocks were down.

TheStreet.com Internet Sector

index was down 32 to 745.

TheStreet.com E-Commerce Index

was down 4 to 142.

The 30-year Treasury bond was down 1/32 to 96 14/32, yielding 5.50%.

On the

New York Stock Exchange

, advancers were beating decliners 1,976 to 991 on 590 million shares. On the

Nasdaq Stock Market

, winners were beating losers 2,269 to 1,668 on 926 million shares.

On the NYSE, 95 issues had set new 52-week highs while 42 had touched new lows. On the Nasdaq, 152 issues had set new highs while new lows totaled 65.

On the Big Board,

Compaq

(CPQ)

was most active, with 21 million shares changing hands. It was up 1/8 to 24.

On the Nasdaq,

Intel

(INTC) - Get Report

was most active, with 38 million shares changing hands. It was down 2 7/16 to 58 1/8.

Company Focus: Rowan

Kicking off the earnings season for the contract drillers,

Rowan

(RDC)

reported a wider-than-expected loss. Rowan incurred a net loss of $10 million, or 12 cents a share, on revenues of $100 million, worse than the 21-analyst First Call outlook of a loss of 6 cents, compared to net income of $42.8 million, or 48 cents, on revenues of $183.9 million in the year-ago period.

While Rowan was able to keep its rig rental rates relatively flat year over year compared to the rest of the industry, the utilization rate for its fleet of 22 offshore rigs suffered. On average, just 49% of its offshore rigs worked during the quarter, compared with 59% in the fourth quarter and 98% a year ago. The average rental, or day, rate was $57,300, down 1% from the fourth quarter and down 8% from first quarter 1998.

C. R. Palmer, Rowan's chairman and chief executive, played down the likelihood of a rebound this year. "Looking forward to the balance of the year, we believe that second-quarter rig utilization will be up, but average day rates will be lower. It is possible, but by no means certain, that there will be increases in both utilization and day rates during the latter part of the quarter."

Investors were not pleased. Shares of Rowan slid 15/16, or 12 1/8%, to 7.2. Meanwhile, the

Philadelphia Stock Exchange Oil Service Index

skidded 3.8%.

--

Mavis Scanlon

1:19 p.m.: Midday Musings: Small-Caps, for Once, Aren't Left Behind as Dow Advances

12:05 p.m.: Stocks Mostly Higher in Choppy Trading

In a choppy session, major market averages were mostly higher around midday, after dipping into the red around midmorning.

The

Dow Jones Industrial Average

was up 43 to 10,438. Powering the Dow was earnings winner

J.P. Morgan

(JPM) - Get Report

, which accounted for 7 points of the venerable blue-chip gauge's gain. J.P. Morgan posted first-quarter earnings of $3.01 a share, vastly outstripping the

First Call

11-analyst estimate of $1.73 and up from the year-ago $1.80, which excludes a charge. J.P. Morgan said return on equity in the first quarter was 22%, compared with 13% a year ago

J.P. Morgan surged 7 to 136 5/16.

The

S&P 500

was down 2 to 1347. The tech-heavy

Nasdaq Composite Index

was up 4 to 2587, but off its best levels of the session.

Small caps continued to perform well. The

Russell 2000

was up 4 to 421.

TheStreet.com Internet Sector

index was down 14 to 762.

TheStreet.com E-Commerce Index

was up 1 to 147.

Stocks opened handsomely higher in part on positive earnings news from J.P. Morgan and

Motorola

(MOT)

. More on Motorola below.

Also buoying the market's early mood was news out of

Lucent

(LU)

, which said yesterday that second-quarter earnings would meet or beat analysts' expectations. It was up 3 1/2 to 60 7/16, and was second most active on the

New York Stock Exchange

, with 12 million shares changing hands.

However, disappointment with news out of

Intel

(INTC) - Get Report

after the close Tuesday overtook the overall glowing corporate news and was blamed at least in part for the midmorning downdraft in the market.

TheStreet.com

wrote about the aftermath of Intel's earnings release in a story

last night.

On the

Nasdaq Stock Market

, Intel was most active, with 32 million shares changing hands. It was last down 2 1/4 to 58 3/8.

The 30-year Treasury bond was up 1/32 to 96 15/32, yielding 5.49%.

Market breadth was positive.

On the NYSE, advancers were beating decliners 1,676 to 1,099 on 374 million shares. On the Nasdaq, winners were beating losers 2,023 to 1,568 on 649 million shares.

On the NYSE, 74 issues had set new 52-week highs while 35 had touched new lows. On the Nasdaq, 129 issues had set new highs while new lows totaled 39.

On the Big Board, most active was

Compaq

(CPQ)

, with 17 million shares changing hands. It was up 3/16 to 24 1/16.

Tech Focus

The

Nasdaq 100

was up fracionally, while the

Morgan Stanley High-Tech 35

was up 2%. The

Philadelphia Stock Exchange Semiconductor Index

was up 3%.

Motorola was up 1 1/2 to 84 7/16. It hit a 52-week intraday high earlier in the day at 86. After the close, the company reported first-quarter earnings of 28 cents a share, topping the First Call 27-analyst outlook by 4 cents and exceeding the year-ago 23 cents.

Alkesh Shah, analyst at

Morgan Stanley Dean Witter

, raised his price target on Motorola to $96 from $82.

On the downgrade front,

Infoseek

(SEEK)

was downgraded today by

BT Alex. Brown

to buy from strong buy. Its stock fell 10 1/8, or 13%, to 70.

BancBoston Robertson Stephens

meanwhile, initiated coverage of

Xoom.com

(XMCM)

with a buy rating. It was down 2 7/8 to 91 9/16.

11:07 a.m.: Major Indices Turn Near Flat as Initial Market Euphoria Dissipates

After opening strongly on the upside, the lingering bad taste of yesterday's postclose

Intel

(INTC) - Get Report

earnings release in part helped extinguish the early euphoria on Wall Street.

The

Dow Jones Industrial Average

was up 5 to 10,400. The

S&P 500

was down 2 to 1347. The

Nasdaq Composite Index

was up fractionally at 2584.

The small-cap

Russell 2000

was up 2 to 419.

TheStreet.com Internet Sector

index was down 14 to 762.

TheStreet.com E-Commerce Index

was up 2 to 148.

The 30-year Treasury bond was up 1/32 to 96 16/32, yielding 5.49%

Intel was down 2 1/2, or 4%, to 58 1/8. The chip giant said second-quarter revenue may be flat to slightly lower than the first quarter's $7.1 billion due to seasonal factors. Intel posted first-quarter earnings after the close yesterday of 57 cents a share, 2 cents above the 33-analyst

First Call

forecast and above the year-ago 36 cents. Sales in the quarter were lower than expected.

Despite good news from

J.P. Morgan

(JPM) - Get Report

,

Lucent

(LU)

and

Motorola

(MOT)

, "Intel overtook everything," said Peter Boockvar, equity strategist at

Miller Tabak Hirsch

.

J.P. Morgan, a Dow component, posted first-quarter earnings of $3.01 a share, blowing away the First Call 11-analyst estimate of $1.73 and up from the year-ago $1.80, which excludes a charge. J.P. Morgan said return on equity in the first quarter was 22%, compared with 13% a year ago. J.P. Morgan was up 5 5/8 to 135 1/16.

Motorola reported first-quarter earnings of 28 cents a share, topping the First Call 27-analyst outlook by 4 cents and exceeding the year-ago 23 cents.

Lucent said yesterday it expects second-quarter earnings to meet or beat analysts' expectations. It was up 3 5/16, or 6%, to 60 1/4.

On the plus side, Boockvar noted that investors have begun buying other areas of the market, pointing out that small-caps lately have begun to perk up.

He said PC-related stocks on a short-term basis have topped out, as have the financials, which he said have been "powerhouses."

Market breadth was strong.

On the

New York Stock Exchange

, advancers were beating decliners 1,480 to 1,096 on 250 million shares. On the

Nasdaq Stock Market

, winners were leading losers 1,829 to 1,397 on 463 million shares.

On the NYSE, 67 issues had set new 52-week highs while 27 had touched new lows. On the Nasdaq, 116 issues had set new highs while new lows totaled 28.

On the Big Board,

Compaq

(CPQ)

was most active, with 11 million shares changing hands. It was up 3/8, or 2%, to 24 1/4.

On the Nasdaq,

Sovereign Bancorp

(SVRN)

was most active, with 26 million shares changing hands. It was up 1 15/16, or 11%, to 19 3/8. Sovereign Bancorp, parent company of

Sovereign Bank

, said yesterday its executive management team met with sell-side analysts in New York and discussed with them Sovereign's technology initiatives, including plans for forming a separate Internet bank.

10:03 a.m.: Nasdaq Leads March Higher

The tech-heavy

Nasdaq Composite Index

was soaring out of the gate as quarterly earnings reports streamed down on Wall Street.

The Nasdaq Comp was up 39 to 2622. The

Dow Jones Industrial Average

was up 24 to 10,419.

Highlighting earnings so far today has been Dow component

J.P. Morgan

(JPM) - Get Report

, which blew away Street earnings estimates. J.P. Morgan reported first-quarter earnings of $3.01 a share, blowing away the

First Call

11-analyst estimate of $1.73 and up from the year-ago $1.80, which excludes a charge. The stock was up 6 11/16 to 135 1/2.

The

S&P 500

was up 3 to 1353. The

Russell 2000

was up 4 to 422.

TheStreet.com Internet Sector

index was up 2 to 778.

TheStreet.com E-Commerce Index

was up 5 to 151.

The 30-year Treasury bond was down 4/32 to 96 11/32, yielding 5.50%.

Most Up at Open -- NYSE

Lucent (LU) , up 5 1/16 to 62 1/8

: The company said yesterday it expects second-quarter earnings to meet or beat analysts' expectations.

Most Up at Open -- Nasdaq

Net.B@nk (NTBK) , up 13 3/32 to 249

.

Most Down at Open -- NYSE

Chevron (CHV) , down 1 3/4 to 92 3/4

.

Most Down at Open -- Nasdaq

Infoseek (SEEK) , down 4 1/2 to 75

:

BT Alex. Brown

downgraded Infoseek to buy from strong buy.