Enthusiasm Wanes as Indices Can't Sustain this Morning's Giddiness - TheStreet

Enthusiasm Wanes as Indices Can't Sustain this Morning's Giddiness

By the time things had wrapped up, there wasn't that much good cheer.
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Yippee.

You'll notice there's no exclamation mark after "Yippee" and with good reason. There really wasn't that much to get excited about in today's market action, as major stock proxies closed well off their session highs and the

Nasdaq Composite Index

actually down on the day.

It wasn't always that way. The session started pretty good overall. Stocks shot sharply higher in the wake of the release of the

Consumer Price Index

, which hit an hour before the opening bell on Wall Street. The

Labor Department

reported overall CPI rose 0.4% while the core CPI -- which excludes food and energy prices -- rose 0.3%. Both figures matched the expectations of economists in a

Reuters

poll.

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But major stock proxies couldn't hold on to anywhere near their best levels of the day. The Treasury market's decay helped take some of the luster out of the market's advance as the 30-year Treasury bond gave up its gains and eventually slipped into negative territory. The long bond weakened in part on fears that the

European Central Bank

may raise interest rates.

Underpeforming the most among the major stock proxies was the Nasdaq Comp, which dipped into the red late in the session, weighed down in part by the stocks of computer makers and semiconductor companies. The Comp eventually closed lower.

The Comp slipped 0.97, or 0.04%, to 2688.18 after yesterday's 1.6% decline. It had traded as high as 2729.30 intraday. The Comp is now 7.8% off its all-time high, which it set on Oct. 11.

The wake of

Dell's

(DELL) - Get Report

warning last night that a 25% jump in memory-chip component prices would probably hit its third-quarter profit margins helped sink shares of PC makers. The

Philadelphia Stock Exchange Computer Box Maker Index

slumped 4.4%.

TheStreet.com

first predicted in an Oct. 6

story that a Taiwan supply crunch might hurt Dell's results. Dell was also most active on the

Nasdaq Stock Market

with a whopping 80.8 million shares changing hands.

In addition to Dell, some other Nasdaq tech-stock heavyweights ended lower.

Microsoft

(MSFT) - Get Report

traded down ahead of its earnings report. After the close, Mister Softee posted earnings of 38 cents a share, four cents ahead of the

First Call/Thomson Financial

consensus estimate.

Chip behemoth

Intel

(INTC) - Get Report

slumped 6%.

As for the

Dow Jones Industrial Average

, it rallied 88.65, or 0.9%, to 10,204.93. The Dow traded as high as 10,335.37 during the session.

Johnson & Johnson

(JNJ) - Get Report

was the biggest positive influence on the Dow, while

Hewlett-Packard

(HWP)

was the largest drag on the blue-chip average.

The

S&P 500

gained 7.19, or 0.6%, to 1261.32. The S&P 500 peaked intraday at 1279.30.

The small-cap

Russell 2000

rose 2.03, or 0.5%, to 410.93.

Internet stocks got some wind back in their lungs after the body blows they suffered yesterday.

TheStreet.com Internet Sector

index jumped 9.58, or 1.4%, to 679.44.

TheStreet.com

Red Hots index was basically unchanged on the day, up 0.02, or 0.01%, to 201.55. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.

The 30-year Treasury bond slipped. It was off 11/32 to 97 1/32, yielding 6.35%.

While the CPI numbers were largely greeted with cheer, the numbers don't mean the

Fed's

out of the rate-raising business, according to some.

"The simple fact is, retail inflation is running at a 2.6% pace over the year and has accelerated to a 2.8% rate during the first nine months of the year," wrote Joel Naroff, president of

Naroff Economic Advisors

in a comment. "In 1998, the overall inflation rate was 1.6%, the number that everyone concentrated on. In comparison, the core is up 2% for the year and 1.9% for the first nine months, below the 2.4% posted in 1998."

"Now, everyone is concentrating on the core. The reality is that you cannot have it both ways and with the overall index filled with factors that are not unwinding, it can definitely be stated that inflation is rising. And that is what the Fed will be considering when the FOMC meeting next month."

The bottom line? "It still looks like a move on November 16 is in the offing," the economist wrote.

Meanwhile, Fed Chairman

Alan Greenspan

was in the news today. Greenspan, in a

speech entitled "Do efficient financial markets contribute to financial crises?" didn't spark much market reaction, unlike his comments

Thursday night which helped sideswipe the market the next day.

Bank stocks, which have suffered horribly over the last couple of months, soared for the second straight day after being one of the market's leaders yesterday. The

Philadelphia Stock Exchange/KBW Bank Index

hopped 3.6%.

Elsewhere in financials, brokerage stocks rallied. The

American Stock Exchange Broker/Dealer Index

gained 2.2%.

Two notable new issues enjoyed successful debuts.

Martha Stewart Living Omnimedia

(MSO)

hopped about 98% in its debut.

The other winner came from the world of grappling. The

World Wresting Federation

(WWFE)

surged 48.5%.

And in the maudlin anniversary department, 12 years ago today was Black Monday.

Dave Eberhart analyst at

Optima Investment Research

in Chicago, has a relatively grim view of the market looking ahead. Going forward, Eberhart sees more selling into rallies, something that has been the thing to do in the market lately.

"I think we've got a ways to go on the downside," he said.

On Friday, before staging its rally thanks to the stock market's crumbling action, the yield on the long bond hit 6.365%, a two-year high, said Eberhart.

"The general trend for the bond market is down still," he said.

Overall, while the analyst sees more negatives than positives, he did point to some bright spots in the market today.

On the plus side, drug, health care and financial stocks, along with insurance issues turned in a solid performance. As for the financials, he said there was probably some bargain hunting going on in those stocks.

Eberhart pegged support on the December S&P futures contract in the 1257 to 1253 area. Meanwhile, significant resistance for the contract lies at 1300, he said.

In

New York Stock Exchange

trading, 906 million shares were exchanged while advancing stocks beat decliners 1,610 to 1,400. On the

Nasdaq Stock Market

, 1.10 billion shares traded while winners vanquished losers 2,125 to 1,771. New 52-week lows beat new highs 264 to 18 on the Big Board and by 133 to 44 in over-the-counter trading.

On the Big Board,

Lucent

(LU)

was most active with 20.5 million shares changing hands. It fell 1 56 3/8.

Among other indices, the

Dow Jones Transportation Average

gained 16.14, or 0.6%, to 2860.21; the

Dow Jones Utility Average

fell 3.44, or 1.2%, to 295.08; while the

American Stock Exchange Composite Index

rose 1.43, or 0.2%, to 775.92.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

fell 14.29 to 6853.95 and the

Mexican Stock Exchange IPC Index

jumped 143.01, or 2.9%, to 5050.48.

Tuesday's Company Report

By Eileen Kinsella
Staff Reporter

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.

)

Mergers, acquisitions and joint ventures

Coca-Cola Bottling Consolidated

(COKE) - Get Report

rose 1/2 to 55 11/32 after it said it will assume a 100% stake in certain selling territories in the Carolinas, costing roughly $320 million. Coca-Cola Bottling Consolidated has been a joint business partner with

Coca-Cola

(KO) - Get Report

in

Piedmont Coca-Cola Bottling Partnership

, which has franchise territories in both North and South Carolina. According to chairman and CEO J. Frank Harrison, Coca-Cola Bottling is in talks to buy Coca-Cola's 50% stake in Piedmont. Shares of Coca-Cola rose 1 13/16 to 52 13/16.

Carnival

(CCL) - Get Report

slipped 3/16 to 39 7/8 after it announced plans to take the remaining 32% interest in

Cunard

, in a stock and cash transaction valued at $205 million.

El Paso Energy

(EPG)

lost 1 1/16 to 40 5/16 after saying it has completed its proposed purchase of

Crystal Gas Storage

(COR) - Get Report

, for roughly $224 million in stock, debt and options.

Nortel Networks

(NT)

fell 2 1/8 to 50 1/4 after announcing last night it plans to buy

Clarify

(CLFY)

in a stock transaction valued at $2.1 billion.

Republic New York

(RNB)

fell 1/4 to 61 11/16 after it said its shareholder vote on a $10.3 billion proposed merger with Britain-based

HSBC Holdings

has been postponed for the third time, due to an ongoing investigation of Republic's futures brokerage division. Republic said it would push the meeting back to Nov. 30 from Oct. 29, in order to complete a probe into the bank's relations with New Jersey money manager Martin Armstrong, who is accused of securities fraud.

Earnings/revenue reports and previews

Dell dropped 2 7/8, or 7%, to 38 1/2 after cautioning yesterday that a 25% increase in computer memory-chip component prices used in its PCs would probably dent its third-quarter profit margins. CFO Thomas Meredith said that although he sees the price hike as a short-term problem, the company's third-quarter operating margins would be affected. Dell refused to say if stress on profit margins would trigger lower

earnings per share

Bear Stearns

cut its rating on Dell to attractive from buy.

Bristol-Myers Squibb

(BMY) - Get Report

climbed 4 5/8, or 6.5%, to 76 1/8 after it reported third-quarter earnings of 54 cents a share, in line with the 24-analyst estimate and up from the year-ago 47 cents.

Borden Chemical

(BCU)

inched up 1/4, or 7.1%, to 3 3/4 after it posted a third-quarter loss of 20 cents a share, narrower than the single-analyst estimate of a 22-cent loss per share and down from a year-ago 24-cent loss.

Brunswick

(BC) - Get Report

edged up 7/16 to 24 1/16 after it posted third-quarter earnings of 52 cents a share, in line with the six-analyst estimate and up from a year-ago 46 cents a share.

Central Newspapers

(ECP)

was unchanged at 42 5/8 after it posted third-quarter earnings of 57 cents a share before charges, better than the five-analyst estimate of 55 cents, and up from the year-ago 42 cents a share.

Chiquita Brands

(CQB)

climbed 3/16 to 5 11/16 after posting a third-quarter loss of 53 cents a share, narrower than the two-analyst estimate of 55 cents but wider than a year-ago loss of 23 cents.

Coca-Cola Enterprises

(CCE)

added 3/16 to 22 7/8 after it posted third-quarter earnings of 24 cents a share, beating the 17-analyst estimate of 21 cents but down from the year-ago 28 cents.

Coca-Cola Enterprises also announced that John Alm would become president, as of Jan. 1. Alm would replace the retiring current president and CEO Henry Schimberg.

C.R. Bard

(BCR)

jumped 4 1/2, or 9%, to 54 7/16, after reporting third-quarter earning of 58 cents a share, a penny better than the 11-analyst estimate and up from a year-ago 42 cents.

Cypress Semiconductor

(CY) - Get Report

lost 1 15/16, or 8%, to 22 7/16 after it posted third-quarter earnings of 24 cents a share, better than the 12-analyst estimate of 21 cents and up from a year-ago 2 cents a share.

Dial

(DL) - Get Report

added 3/8 to 23 5/16 after it reported third-quarter earnings of 31 cents a share, a penny better than the six-analyst estimate and up from a year-ago 27 cents a share.

Eaton

(ETN) - Get Report

shed 12 9/16, or 15.2%, to 70 after it posted third-quarter earnings of $1.45 per share, greatly below the 10-analyst estimate of $1.56 but above the year-ago 80 cents a share, which included a restructuring charge.

Fulton Financial

(FULT) - Get Report

rose 5/16 to 19 1/8 after it posted third-quarter earnings of 35 cents a share, in line with the four-analyst estimate and up from the year-ago 32 cents a share.

GATX

(GMT)

rose 1/2 to 29 15/16 after posting third-quarter earnings of 83 cents a share, beating the three-analyst estimate of 81 cents and up from a year-ago 76 cents a share.

Idex

(IEX) - Get Report

fell 3/16 to 26 1/16 after it posted third-quarter earnings of 48 cents a share, in line with the six-analyst estimate and up from the year-ago 46 cents.

Invacare

(IVC) - Get Report

lost 5/8 to 22 1/16 after posting third-quarter earnings of 46 cents a share, in line with the five-analyst estimate and up from the year-ago 43 cents.

ITT Industries

(IIN) - Get Report

rose 13/16 to 33 3/8 after it posted third-quarter earnings of 60 cents a share, beating the eight-analyst estimate of 58 cents and the year-ago 23 cents.

Johns Manville

(JM)

lost 1/16 to 11 7/8 after it reported third-quarter earnings of 49 cents a share, missing the three-analyst estimate of 50 cents but up from the year-ago 31 cents a share.

Johnson Controls

(JCI) - Get Report

fell 6 3/16, or 9.3%, despite reporting fourth-quarter earnings of $1.38 a share, in line with the nine-analyst estimate but above the year-ago $1.09 a share.

Keane

(KEA)

rose 1 7/16, or 7.2%, to 21 1/2 after reporting third-quarter earnings of 27 cents a share, falling below the 17-analyst estimate of 31 cents a share and down from the year-ago 38 cents.

L-3 Communications

(LLL) - Get Report

rose 7/16 to 35 1/4 after reporting third-quarter earnings of 51 cents a share, better than the five-analyst estimate of 48 cents, and up from a year-ago 37 cents. The company said its acquisition pipeline is strong.

Mellon Bank

(MEL)

gained 7/16 to 32 11/16 after it posted third-quarter earnings of 46 cents a share, in line with the 22-analyst estimate and up from a year-ago 41 cents.

Miami Computer

(MCSC)

climbed 1 1/8, or 6.3%, to 19 after it reported third-quarter earnings of 24 cents a share, a penny better than the five-analyst estimate and up from a year-ago 17 cents.

Northwest Airlines

(NWAC)

gained 1/2 to 26 1/4 after it posted third-quarter earnings of $1.96 a share, missing the 12-analyst estimate of $1.98 but up from the year-ago loss of $2.91.

Parametric Technology

(PMTC)

gained 1 13/16 after it reported pro forma fourth-quarter earnings of 18 cents a share, beating the 11-analyst estimate of 16 cents and the year-ago 17 cents.

People's Heritage Bank

(PHBK)

rose 3/4 to 17 3/8 after posting third-quarter earnings of 41 cents a share, in line with the nine-analyst estimate and up from a year-ago 35 cents a share.

Pfizer

(PFE) - Get Report

climbed 2 3/8, or 6.3%, to 39 15/16 after posting third-quarter operating income of 23 cents a share excluding the impact of a $310 million pretax charge. The 24-analyst estimate called for earnings of 21 cents a share, while the year-ago operating income was 13 cents a share. Including the charge, earnings in the latest quarter were 18 cents a share.

Deutsche Banc Alex. Brown

upped its rating on Pfizer to buy from market perform.

Philip Morris

(MO) - Get Report

inched up 1/4 to 30 3/4 after it reported third-quarter underlying earnings of 87 cents a share, in line with the 12-analyst estimate and up from underlying earnings of 84 cents a year ago. The company said underlying results exclude several pretax charges. Including the charges, the company earned 84 cents a share, compared with a year-ago 81 cents.

Pitney Bowes

(PBI) - Get Report

fell 4 7/8, or 8.1%, to 50 1/4 after it posted third-quarter earnings from operations of 58 cents a share, a penny better than the eight-analyst estimate and up from 48 cents a year ago.

Quaker Chemical

(KWR) - Get Report

was unchanged at 16 9/16 after it posted third-quarter earnings of 48 cents a share, in line with the single-analyst estimate but up from 40 cents a year ago.

Railworks

(RWKS)

climbed 5/8, or 7.6%, to 9 1/8 after reporting third-quarter earnings of 50 cents a share, beating the three-analyst estimate of 42 cents and up from a year ago pro-forma 25 cents.

SmartForce

(CBTSY)

, formerly known as

CBT Group

, dropped 10 3/8, or 38.6%, to 16 5/8 despite posting third-quarter earnings of 14 cents a share before charges, above the 10-analyst estimate of 11 cents and up from the year-ago 6 cents a share. The company announced plans to move its operations to the Internet.

Summit Bancorp

(SUB) - Get Report

climbed 13/16 to 30 13/16 after it posted third-quarter earnings of 53 cents a share, falling below the 18-analyst estimate of 70 cents and the year-ago 67 cents.

Syncor

(SCOR) - Get Report

jumped 2 1/2, or 7.9%, to 34 after it posted third-quarter earnings of 33 cents a share, beating the five-analyst estimate of 30 cents and up from the year-ago 24 cents

Texas Instruments

(TXN) - Get Report

fell 4 15/16, or 5.9%, to 79 1/2 after it posted third-quarter earnings of 51 cents a share, handily beating the 25-analyst estimate of 43 cents and the year-ago 19 cents, which included a pretax charge of $14 million for depression of fixed assets.

UST

(USTB) - Get Report

was unchanged at 31 1/32 after it posted third-quarter earnings of 44 cents a share, a penny shy of the five-analyst estimate, and up from a year-ago 39 cents a share, before charges.

Wells Fargo

(WFC) - Get Report

climbed 2 1/8, or 5.4%, to 41 5/8 after it posted third-quarter earnings of 57 cents a share, in line with the 27-analyst estimate and up from the year-ago 45 cents.

Offerings and stock actions

IMS Health

(RX)

climbed 9/16 to 23 3/16 after it said it set a 16 million-share repurchasing plan.

Martha Stewart Living Omnimedia leaped 17 9/16, or 97%, to 35 9/16 after making its trading debut. Morgan Stanley priced the 7.2 million-share IPO top-range at $18.

Mueller Industries

(MLI) - Get Report

added 3/4 to 29 5/16 after it said it set a stock buyback for up to 4 million common shares.

Radio Unica

(UNCA)

advanced 11 7/16, or 71.4%, to 27 7/16 after its first day of trading.

Salomon Smith Barney

priced the 6.84 million-share IPO top-range at $16.

Satyam Infoway

(SIFY) - Get Report

jumped 17 7/16, or 96.85, to 35 1/2 after making its trading debut. Merrill Lynch and Morgan Stanley priced the 4.1 million-share IPO above range at $18.

The World Wrestling Federation bounced 8 1/4, or 48.5%, to 25 1/4 in its debut. Bear Stearns prices the IPO above-range at $17.

Analyst actions

Merrill Lynch

upgraded shares of

Lexmark

(LXK)

to intermediate-term buy from accumulate, while

Credit Suisse First Boston

upped its rating to buy from hold.

Salomon Smith Barney

sliced its rating on Lexmark to neutral from buy, based on the company's warning for slow fourth-quarter revenue growth. Lexmark shares jumped 7 3/16, or 11%, to 72 3/16.

Bear Stearns sliced its rating on

Gateway

(GTW)

to attractive from buy. Gateway sank 4 5/8, or 8.9%, to 46 7/8.

J.P. Morgan

upped its rating on

Lattice Semiconductor

(LSCC) - Get Report

to buy from market performer. PaineWebber upped the stock's fiscal 2000 EPS estimate to $1.27 from $1.10. Lattice Semiconductors climbed 1 7/8, or 6.5%, to 30.

Warburg Dillon Read

upped its rating of

Lucent

(LU)

to strong buy from buy. Lucent shares slid 1/8 to 57 1/4.

Merrill Lynch upped its rating on

MicroStrategy

(MSTR) - Get Report

to buy and set a price target of 90. Shares of MicroStrategy jumped 12 1/8, or 17.1%, to 82 3/4.

Salomon Smith Barney downgraded the shares of

Micron Technology

(MU) - Get Report

to neutral from buy. Micron Technology plummeted 5 1/4, or 7.6%, to 63.

Credit Suisse First Boston raised its rating on

Rite Aid

(RAD) - Get Report

to buy from hold. Yesterday, the drug store chain said its chairman and CEO Martin Grass stepped down from his roles and would be replaced by president and COO Timothy Noonan. Shares of Rite Aid mounted 1 13/16, or 18.85, to 11 7/8.

Warburg Dillon Read rolled out coverage of

Rayonier

(RYN) - Get Report

with a strong buy rating and a price target of 55. Rayonier slipped 1/2 to 36 11/16.

Banc of America Securities

upped its rating on

Suiza Foods

(SZA)

to buy from market performer. Shares of Suiza advanced 11/16 to 36 1/8.

Miscellany

The U.S. said it has indicted

Boeing's

(BA) - Get Report

McDonnell Douglas

division for a machine tool agreement with China five years ago. According to the indictment, McDonnell Douglas sold machinery to a state-owned Chinese aerospace firm called

Catic

. The machinery, which was authorized by the U.S. government solely for commercial purposes, was routed to a military plant that manufactures missiles. McDonnell Douglas denied that it has any committed crimes. Boeing climbed 5/8 to 42 3/4.

General Electric

(GE) - Get Report

hopped 7/16 to 118 1/16 despite its appliances division announcing that it was recalling roughly 3.1 million

GE

and

Hotpoint

brand dishwashers that could be possible fire hazards. GE, along with the

U.S. Consumer Product Safety Commission

, said that models made between April 1983 and January 1989 contain a slide switch that can melt and ignite over time.

MyPoints.com

(MYPT)

bounced 1 3/16, or 10.1%, to 13 after it said it plans to hike Web-based advertising and email marketing rates.

The

Securities and Exchange Commission

requested that the

American Stock Exchange

, the

Chicago Board of Options

, the

Pacific Stock Exchange

and the

Philadelphia Stock Exchange

establish an electronic link that would guarantee investors the best prices possible. The SEC ordered the exchange to propose a plan for the link within 90 days.

TheStreet.com

(TSCM)

, the parent company to this site, has tapped Thomas Clarke as its president and COO. Clarke served as the former CEO of

Thomson Financial Investor Relations

.