The standard tale of this earnings season is paradoxical. Strong reports have been breeding selloffs, because investors have already priced in the numbers, bidding stocks up to the point where they have nowhere to go but down.
But despite the general malaise among the market's major proxies, today's standout stocks aren't following that plot. Companies such as
Delta Air Lines
were doing what companies are supposed to do after positive surprises: going up. Along with
-- which is in talks to sell its international container-shipping business, according to
The Wall Street Journal
-- those stocks were helping to send the
Dow Jones Transportation Index
up 36.24, or 1.1%, to 3438.11.
In the banking sector,
were getting respectable pops after putting out some monster numbers this morning, helping to send the
Philadelphia Stock Exchange/KBW Bank Index
was lately up about 1.7%. Only
was sticking to the bizzaro earnings script, lately off 0.7% after posting record profits.
Meanwhile, investors were bidding down earnings machines such as
ahead of their post-market reports.
None of the individual stories can hide the fact that technology was slumping badly at midday. The
Nasdaq Composite Index
was off 25.53, or 0.9%, to 2838.95 on weakness in its big tech names. The Net wasn't mitigating the downward pressure, as
TheStreet.com Internet Sector
index was sloughing off 16.51, or 2.6%, to 622.22.
Dow Jones Industrial Average
was losing 31.97, or 0.3%, to 11,177.87. The broader
was off 10.43, or 0.7%, to 1408.35 while the small-cap
was down 3.85, or 0.8%, to 461.41.
But Louis Todd, head of equities trading at
, wasn't taking the selloff too seriously. He called today "a typical Monday in summertime. The market's going sideways. Volume's subdued." In the short term, Todd foresees today's pullback continuing after Softee and IBM report tonight. "We'll probably see some profit taking on that good news."
Another trader bluntly echoed that sentiment. "The market's doing what it should be doing -- a little profit-taking after a big run-up last week," he said.
As far as the interest-rate outlook, Todd wasn't particularly concerned about the
will give on Thursday. Stocks are responding to earnings news right now, he said.
And, today's broad weakness notwithstanding, earnings have been looking extremely juicy. In a research note Friday,
chief investment strategist
said that this quarter's 8:1 positive-to-negative surprise ratio is making in 1999 the culmination in a decade of increasingly strong earnings.
Applegate raised his per-share S&P 500 earnings forecasts to $50.50 from $49.50 for 1999, and to $55.75 from $54.50 for 2000, based partly on an expectation of recovery in global markets. On that basis, he raised his year-end
price target -- a practice he called "a near ritual" -- to 1500 for this year, and 1650 for next year. Applegate reiterated that his money remains where his mouth is: 80% in stocks and 20% in bonds, with absolutely
The 30-year Treasury was up 2/32 to 91 2/32, yielding 5.90%. (For more on the fixed-income market, see today's early
New York Stock Exchange
trading, 360.8 million shares were exchanged while declining stocks led 1,751 to 1,016. In
Nasdaq Stock Market
activity, 532.4 million shares were exchanged while losers outpaced gainers 2,085 to 1,618.
Monday's Midday Watchlist
As noted above, recently sluggish airline names were flying high at midday, boosted by solid earnings reports.
Alaska Air was up 2 3/4, or 6.6%, to 44 5/8 ahead of a 3-for-2 stock split tonight and after this morning recording second-quarter earnings of $1.59 a share, topping both the 11-analyst
forecast of $1.35 and the year-ago $1.51.
Continental was up 2 5/8, or 6.8%, to 41 3/16 after reporting second-quarter earnings of $1.80 a share, beating the 12-analyst estimate of $1.73 but falling behind the year-earlier $2.11.
Finally, Delta was up 2 1/16 to 61 1/8 after posting fourth-quarter earnings of $2.40 a share, 9 cents ahead of the 11-analyst estimate and above the year-ago $2.26.
Mergers, acquisitions and joint ventures
was down 2 1/4 to 137 9/16 on news it's acquiring privately held
for $280 million in stock.
CSX was up 1 5/8 to 50 9/16 following a report in
The Wall Street Journal
saying the company is in talks to sell its international container-shipping business to Danish
for about $800 million.
was up 1/2 to 30 5/8 after
said it's buying the company via its subsidiary
for $764 million. Vodafone AirTouch was off 2 3/8 to 211 7/8.
was up 1/16 to 69 1/8 on word it's considering exercising an option to complete a takeover of
, the Swedish carmaker, by acquiring a second half of the company from Sweden's
was up 7 1/2, or 18.7%, to 48 after striking a deal to provide computer-generated stamps and postage over
U S West
was down 5/16 to 59 15/16 after accepting
buyout offer. Also,
was up 1 1/16 to 47 3/16 after saying it will proceed with its $12.9 billion purchase of
, which was off 1 13/16 to 57 5/16.
Earnings/revenue reports and previews
was off 5/16 to 44 7/16 after reporting second-quarter earnings of 8 cents a share, better than the 15-analyst estimate of 5 cents and moving up from the year-ago loss of 40 cents. Viacom also amended a previously filed registration statement with the
Securities and Exchange Commission
for a proposed 31 million-share IPO for
, representing approximately 17.7% of its shares. Viacom estimates the IPO price will be $16 to $18 a share.
In other earnings news:
was up 4 5/8, or 15.5%, to 34 3/4 after
started coverage with a buy and a price target of 55.
also started coverage with a buy.
initiated coverage of the stock with a near-term accumulate and a long-term buy.
was flat at 55 1/2 after
reported it will start a new Internet company in partnership with Tim Robertson, the son of evangelist
. The site aims to give parents a way to screen out pornographic material, hate sites and other information unsuitable for children.
was up 3/16 to 54 1/4 after
said the company's assessing several initiatives to boost its stock price, including a possible divestiture of its auto-parts unit,
Visteon Automotive Systems
was up 2 3/16 to 116 3/16 after naming
executive Carly Fiorina its new president and CEO. Lucent was down 2 3/16 to 76 1/4.