Dow Jones Industrial Average
suddenly has four digits. But unlike Ms. Hunter's Ada, the Dow was not in unfamiliar territory and didn't experience too much pain.
Federal Open Market Committee
left interest rates unchanged, as expected, but did not announce a change in bias toward tightening, as some feared. That helped the bond market but provided no impetus to equities.
The price of the 30-year Treasury bond rose 24/32 to 95 3/32, its yield falling to 5.59%.
Still, the Dow closed down 93.52, or 0.9%, to 9913.26 after trading as low as 9874.41. The index never really threatened a second straight close above
"I think today there's a little profit-taking on some of the moves we've had over last week or so," said Greg Adams, senior portfolio manager at
Chase Asset Management
. "As I look out, I would expect the market to probably move a little higher as we get into fist quarter earnings reports. The assumption being the reports will look pretty good
because we haven't seen a lot of nasty preannouncements."
Adams, who manages about $3.5 billion between the
Chase Vista Large Cap Equity fund and the
Chase Vista Growth & Income fund, foresees only "modest" upside potential for the Dow, perhaps 3% to 4%.
"Looking at the overall valuation of the market and breadth that remains pretty dismal, I think it's hard to get super-encouraged," he said. "People are talking about pushing quickly to 11,000. I don't see that yet."
New York Stock Exchange
trading today, 729 million shares were exchanged while losers led gainers 1,718 to 1,245. In
Nasdaq Stock Market
activity 901.2 million shares were exchanged while declining issues led 2,240 to 1,691. New 52-week lows bested new highs 104 to 37 on the Big Board and by 100 to 77 in over-the-counter trading.
As for whether 10,000 represents a ceiling, the fund manager replied: "To me, it's just another number, but there's no question from a psychological standpoint it does have meaning to people. I wouldn't be surprised to see us bounce around the 10,000 level over the next month or so, then find ourselves back below later in the year. But does that have anything to do with 10,000 itself? Not much."
was the biggest drag on the Dow, falling 2.3% after warning
after the close yesterday about lower-than-expected sales.
fell 8.4% after an Oregon jury awarded over $80 million to the family of a longtime smoker who died (surprise!) of lung cancer.
tracked the Dow for much of the day, closing down 9.42, or 0.7%, to 1300.75. The
climbed as high as 400.55 but closed down 0.98, or 0.3%, to 398.78.
Nasdaq Composite Index
traded as low as 2477.64 early on, then climbed as high as 2506.79 around 2 p.m. EST before reversing again. The tech-lavished index closed down 12.55, or 0.5%, to 2480.29.
was among the Nasdaq's biggest losers while
embodied the hesitancy of many tech bellwethers. Sun rose as high as 127 (which would have been a 52-week high) but fell as low as 122 7/8 before closing up 1.1% at 125 15/16. Similarly, but with a less pleasant ending,
rose as high as 185 7/8 but closed down 2.1% at 172 5/16.
In NYSE trading,
rose to new all-time high territory at 135, then slid as low as 127 before closing up 1/8 at 129 3/4.
AOL Bulls Cry 'Toro! Toro!'
While traditional bellwethers stumbled,
rose 10% after its online auction offering went live.
climbed 9.1% in the Big Board's most active trading after unveiling an alliance with Sun Microsystems to jointly develop electronic commerce products. Additionally,
upped its price target on AOL to 215.
While some market players view AOL's recent movement as an assault on the sensibilities of reasonable market analysis, AOL bulls were equally vocal.
"I've always believed America Online to be the bellwether Internet stock and valued according to its potential," said Steve Harmon, senior investment analyst at
. "It already has the widest footprint on the Internet of anybody and the largest recurring revenue stream. And it's growing. I don't want to say it's the next
because I think in this space there's something better than Microsoft coming."
Ulric Weil, senior technology analyst at
Friedman Billings Ramsey
, also raised the specter of Microsoft when defending AOL's movement today.
"This is fleshing out, putting details on what we knew was behind this whole deal between AOL,
and Sun," Weil said. "On the one hand, you can say, 'Big deal, they're in the implementation phase.' On the other hand, they're going to see to it there's a bunch of information appliances distribution by a 500-man sales force that's being created that thanks to Java and Jini software, they can run off any platform. They're going to be cheap because they're going to be manufactured by the millions, literally, starting in 2000. That will stimulate e-commerce like you wouldn't believe for AOL, because they have the eyeballs. This is why the market is looking at AOL so enthusiastically."
Weil submitted that the "e-commerce side of the equation" -- now just 20% of AOL's revenue -- will "be unleashed by this announcement." AOL's bottom line is "going to increase very sharply," he said. "If AOL can earn $3
a share in 2001, suddenly you have a Microsoft P/E."
Elsewhere in Netland,
jumped 331% from its IPO price of $16.
Despite the fireworks,
TheStreet.com Internet Sector
index slid 10.28, or 1.6%, to 643.88 while
TheStreet.com E-Commerce Index
fell 2.25, or 2%, to 110.45.
Airlines were one of the few groups to demonstrate consistent strength today after
Morgan Stanley Dean Witter
upped its price target on
Delta Air Lines
to 80 from 65. The
American Stock Exchange Airline Index
rose 2.7%, helping lift the
Dow Jones Transportation Average
up 73.43, or 2.2%, to 3367.80.
Among other indices, the
Dow Jones Utility Average
fell 6.38, or 2.1%, to 293.93 and the
American Stock Exchange Composite Index
slid 6.25, or 0.9%, to 711.63.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
tumbled 76.83, or 1.2%, to 6575.94 and the
Mexican Stock Exchange IPC Index
rose 36.57, or 0.8%, to 4882.00.
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.
Coca-Cola shed 1 9/16 to 63 1/4, finishing above its session low of 61 3/8, after last night saying it expects worldwide sales to drop up to 2% in the first quarter and that it doesn't expect to meet its 7% to 8% annual volume growth target in 1999. The company blamed weak customer demand in Latin America and increased volatility in Russia. Today, Morgan Stanley Dean Witter lowered its 1999 earnings estimate for Coke to $1.39 from $1.45 a share and its 2000 view to $1.58 from $1.64 a share.
cut its 1999 estimate to $1.45 from $1.50 and its 2000 figure to $1.65 from $1.75.
dropped the stock from its recommended list, rating it a market performer.
Philip Morris coughed down 3 7/16, or 8.4%, to 37 3/4 after a Portland jury ordered the cigarette maker to pay $81 million to the family of a man who died of lung cancer after smoking Marlboros for four decades. It was the biggest verdict ever won by an individual in a smoking liability case. Last month, a San Francisco jury awarded $51.5 million to a Marlboro smoker who had inoperable lung cancer. This morning,
Credit Suisse First Boston
cut its first-quarter earnings estimate for Big Mo to 79 cents from 82 cents a share.
Tomorrow is the last day of the quarter, so what better for a money manager to do than bulk up on the best buys (and sells) of the last three months? Not surprisingly, Internet stocks were among those most helped by such window dressing. The "safe" Internet stock, AOL, picked up 12 1/8, or 9.2%, to an all-time high of 144 1/2 after PaineWebber reiterated its buy and upped its 12-month price target to 215 from 125 a share. Newly issued
lifted 8 1/8, or 12.8%, to 71 3/4. Amazon.com, which launched its online auction site today, popped up 15, or 10%, to 164 11/16.
Mergers, acquisitions and joint ventures
vaulted 2 5/8, or 16.3%, to 18 3/4 after last night saying it received unsolicited inquiries from parties interested in acquiring part or all of the company.
Central European Media Enterprises
soared 4 1/2, or 52.9%, to 13 after last night
SBS Broadcasting System
agreed to acquire the company in a $615 million deal. SBS Broadcasting rose 1 5/8, or 5.3%, to 32 1/4.
climbed 6, or 9.4%, to 70 after last night announcing it will acquire
, an Internet consulting firm, in a stock transaction valued at $50.6 million.
Earnings/revenue reports and previews
skidded 3 3/8, or 5.3%, to 60 1/4 after
said an analyst at Goldman Sachs reduced estimates for how much the company's sales will grow in the first quarter.
shot up 2 5/8, or 31.6%, to 10 15/16 after recording fourth-quarter earnings of 4 cents a share, 3 cents higher than the four-analyst view and above the year-ago loss of $4.62. The company also expects to top expectations for first-quarter earnings of 4 cents with a profit of at least 25 cents.
lowered 1 7/8 to 50 even after posting fourth-quarter earnings of 52 cents a share, topping the 16-analyst estimate of 50 cents and moving up from the year-ago 32 cents.
tumbled 2 1/8, or 9.8%, to 19 9/16 after last night reporting a fourth-quarter loss of 34 cents a share, a nickel narrower than the three-analyst forecast and narrower than the year-ago loss of 48 cents.
jumped 6, or 22.8%, to an all-time high of 32 1/2 after saying it expects fourth-quarter earnings to meet the seven-analyst forecast for 21 cents a share. The company made 22 cents in the year-ago period.
declined 2 1/8, or 6.7%, to 29 9/16 after last night saying it expects third-quarter earnings of 50 cents to 54 cents a share because of the slowdown in Asia and Latin America. The six-analyst projection called for earnings of 60 cents vs. the year-ago 75 cents.
lifted 3 3/4, or 9%, to 45 5/16 after posting first-quarter earnings of 67 cents a share, beating the four-analyst consensus by 3 cents and moving up from the year-ago 64 cents.
plunged 1 7/8, or 12.2%, to 13 7/16 after saying it sees first-quarter earnings of 4 cents and 8 cents a share because of higher labor costs and a squeeze on its margins. The single-analyst view called for a repeat of the year-ago profit of 30 cents.
halved, falling 13 1/4 to an all-time low of 13 1/8, after warning that for the year ending May 31 its earnings will rise more than 30%, which is short of the 40% growth expected by analysts. The company also reported third-quarter earnings of 19 cents a share, beating the four-analyst estimate by a penny and moving up from the year-ago 13 cents.
dwindled 1 9/16, or 6.9%, to 21 3/16 after saying it's comfortable with estimates for 2000 earnings of $2 a share, below current forecasts for $2.08. The company also posted third-quarter earnings of 41 cents a share, in line with the seven-analyst and a penny ahead of the year-ago figure.
gave up 1 5/8, or 6.5%, to 24 after posting fourth-quarter earnings of 41 cents a share, 3 cents higher than the four-analyst view and above the year-ago 34 cents.
National Discount Brokers
fell 4 1/4, or 12.7%, to 29 1/4 after reporting third-quarter earnings of 58 cents a share, up from the year-ago 14 cents. First Call didn't have estimates for the company. National Discount Brokers also said it intends to divest itself of its stake in
, an NYSE specialist firm.
closed flat at 37 3/4 after recording second-quarter earnings of 1 cent a share, above both the 10-analyst forecast for a break-even quarter and the year-ago loss of a penny. Earlier this month,
agreed to buy the 80% of the company it didn't already own for $7.7 billion.
USA Floral Products
tumbled 4 3/16, or 38.5%, to 6 3/4 after last night saying it sees first-quarter earnings of 21 cents to 24 cents a share due to weak Valentine's Day sales and the euro. The six-analyst forecast called for 47 cents vs. the year-ago 31 cents.
Offerings and stock actions
swelled 25 3/4, or 31.8%, to an all-time high of 106 13/16 after setting a 2-for-1 stock split.
lowered 13/16 to 24 11/16 after setting a $100 million buyback program.
excelled 6 1/8, or 19.1%, to an all-time high of 38 1/2 after saying it began a secondary offering of 4.1 million shares.
rocketed up 53, or 331.2%, to 69 after Morgan Stanley Dean Witter last night priced its IPO above range at $16 a share. Analysts Jonathan Cohen and Ryan Alexander of
-- slated to go public in the coming months -- initiated coverage of Priceline.com with a buy. In
stories last week,
questioned the treatment of the offering on the company's Web site.
Elsewhere in new issues,
added on 1/16 to 14 1/16 after
NationsBanc Montgomery Securities
priced its 6.5 million-share IPO below range at $14 a share. MKS is a semiconductor device maker.
rose 3 5/16, or 7.1%, to 49 13/16 after approving the repurchase of $500 million in stock.
slid 5 15/16, or 25.9%, to 17 1/16 after
downgraded it to hold from accumulate.
Iridium World Communications
stumbled 3 1/4, or 16.4%, to an annual low of 16 3/4 after
dropped the stock to near term neutral from accumulate, while keeping its long-term accumulate. Yesterday, Iridium's CFO resigned and the company received a two-month extension from lenders to prove it can meet certain revenue and subscriber targets.
tacked on 1 13/16 to 38 15/16 after
BancBoston Robertson Stephens
initiated coverage at buy. BancBoston was an underwriter on Prodigy's IPO in February.
plunged 7 1/16, or 45.8%, to 8 7/16 after saying it received a subpoena from the
Department of Health and Human Services
for its records about possible improper Medicare claims.
slid 1 23/32, or 36%, to 3 1/4 after saying it halted clinical trials of its lead therapeutic compound,
, following disappointing Phase II/III results.
surged 17 1/16, or 23.1%, to an all-time high of 91 7/8 after announcing plans to launch two Web sites to tap into its customer base of more than 36.5 million.
lowered 1 7/16 to 56 after saying it's exploring strategic options for its composite products business. The business, which produces and sells industrial-grade particleboard and medium-density fiberboard, employs 550 people and generated about $116 million in sales during 1998.