Alan raise rates, and I don't care.
You might think that on the day before the
Federal Open Market Committee
is expected to raise rates a quarter-point, the market would show a little reserve, spending its time speaking in hushed tones, fasting and meditating. But that's not the way things are done anymore, apparently. Stocks flew on the day before the
decision came out in June, and they're flying again today.
"It's very surprising to me to see this thing with this much power the day before," said Ned Collins, senior vice president of U.S. equities at
Daiwa Securities America
. "People are satisfied that they'll do 25
basis points and maybe that will be the last."
Dow Jones Industrial Average
was lately up 135, or 1.2%, to 11,235, paced by big gains in
was up 15, or 1.1%, to 1351.
Nasdaq Composite Index
was up 46, or 1.7%, to 2694.
TheStreet.com Internet Sector
index was up 14, or 2.5%, to 571. The small-cap
was up 2 to 437.
So much for fearing the Fed.
"I think it's just become totally irrelevant," said Peter Canelo, U.S. market strategist at
Morgan Stanley Dean Witter
, of tomorrow's meeting. "What really matters is if they'll do one in October or not."
Canelo suspects that the Fed will go again when it meets Oct. 5 -- something that the market has not really come to terms with yet. And even if it doesn't hike another quarter-point then, it's a near enough thing that the market will likely get jittery about it. "I don't think this interest-rate uncertainty will be resolved until late September or early October," he said, "so the market could get whacked again."
For the moment, though, it looks to Canelo as if the market has some more room to move on the upside. "We made a pretty good bottom, so I think the S&P is heading back to the upper end of its trading range -- there's another 70 points to go." And he thinks the Dow could hit new highs in the 11,400-to-11,500 range.
But where Canelo sees a good, tradable rally -- nothing to build positions on, but certainly something to make money on -- some see less.
"It doesn't have very good volume, it doesn't have very good breadth," said Dick Dickson, technical analyst at
Scott & Stringfellow
in Richmond, Va. "If I'm a trader, I'm not buying that kind of rally."
"Dickson was especially struck by Friday's low volume, when only 673.7 million shares traded on the
New York Stock Exchange
-- not what you'd expect during a double expiration. "I know it's August, I know things are slow, but that's really slow," he said.
True, internals today we're not quite so cheery as the major averages. On the
New York Stock Exchange
, advancers were beating decliners 1,584 to 1,210, with 364 million shares trading hands. There were 56 new 52-week highs and 35 new lows. On the
Nasdaq Stock Market
, advancers were topping decliners 2,013 to 1,586 on 501 million shares. There were 110 new highs and 38 new lows.
The bond market was showing a modestly positive tone, with the benchmark 30-year Treasury up 2/32 to 101 28/32, its yield at 5.99%. (For more on the fixed-income market, see today's early
Monday's Midday Watchlist
Mergers, acquisitions and joint ventures
Continuing the consolidation trend in the world of utilities,
Carolina Power & Light
was off 2 9/16, or 6.5%, to 36 7/16 after it agreed to buy
for about $5.3 billion in cash and stock. The deal values Florida Progress at $54 a share, a juicy premium over its Friday closing price of 44 5/8. Today,
cut Carolina Power & Light's rating to a near-term neutral from accumulate, while
upped its rating on Florida Progress to attractive from neutral. Florida Progress shares were up 2 1/4, or 5.5%, to 46 7/8.
was falling 3, or 5.7%, to 49 after it announced plans to buy
in a stock swap valued at $608.4 million. Centura expects the acquisition to be accretive to earnings per share in 2001. Triangle shares were jumping 4 5/8, or 28%, to 21 1/8.
was up 2 1/16 to 47 9/16 after it said it is acquiring
Transaction Network Services
in a deal it values at $720 million. Shares of Transaction Network Services were leaping 10, or 29.2%, to 44 1/4.
Peninsular & Oriental Steam Navigation
of Britain denied it received a buyout offer worth about $11 billion from
, the world's biggest cruise operator. P&O's comments rebutted a report in Britain's
Mail on Sunday
, which reported that P&O had rejected the bid. Shares of Carnival were up 1 1/16 to 48 1/16 at the midday.
was up 1/8 to 35 after it agreed to be bought by
Cooper Tire & Rubber
for $760 million. The company, a leading player in auto plastic and rubber manufacturing, said it would assume a one-time, after-tax $15.3 million charge, or about 95 cents a share, the first quarter of fiscal 2000. The transaction will be completed in the fourth quarter. Shares of Cooper Tire were down 1/8 to 20 3/8.
Suez Lyonnaise des Eaux
United Water Resources
, the second-largest water distributor in the U.S., for $35 a share. Shares of United Water Resources were up 2 3/8, or 7.7%, to 33 7/16.
was off 13/16 to 73 1/2 after it unveiled plans to buy
in a deal valued at $540 million. Forte shares were hopping 4 1/16, or 24.2%, to 20 7/8 on the news.
was up 2 11/16 to 83 7/8 after it said it is acquiring
for $21 a share in cash. OmniQuip was rocketing 7 1/2 to 20 5/8.
Earnings/revenue reports and previews
Stewart & Stevenson
was up 3/16 to 13 11/16 after it posted second quarter earnings of 11 cents a share, beating the three-analyst
estimate of 7 cents but down from the year-ago 30 cents.
Offerings and stock actions
has put IPO plans on hold due to volatile market conditions. The online travel company asked the
Securities and Exchange Commission
to withdraw $50 million offering from consideration and also notified Nasdaq of the cancellation. Travelscape planned to offer 5 million common shares, pricing at $10 to $12 each. On an estimated IPO price of $11 a share, the company hoped to rake in roughly $50 million for debt repayment and working capital.
American National Can
was up 3/8 to 16 3/4 after
Deutsche Banc Alex. Brown
started coverage with an initial buy rating.
Credit Suisse First Boston
initiated coverage of the stock with a strong buy rating and a price target of 33.
was up 7/16 to 7 11/16 after PaineWebber upgraded the stock to buy from attractive.
was down 5/16 to 36 15/16 after
lowered its rating on the stock to outperform from buy, citing a lower production growth outlook through 2000.
was down 5/8 to 21 11/16 despite Morgan Stanley Dean Witter giving the stock an initial outperform rating.
was up 1/16 to 6 1/8 after
U.S. Bancorp Piper Jaffray
started coverage at strong buy.
Cross Timbers Oil
was up 5/16 to 12 after Lehman Brothers upped its rating to buy from outperform.
was up 1 11/16 to 49 15/16 after
Donaldson Lufkin & Jenrette
started coverage at buy.
was unchanged at 55 9/16 after
Warburg Dillon Read
raised its rating to buy from hold.
was up 1 5/8, or 11.6%, to 15 11/16 after DLJ started coverage with an initial buy rating.
Warburg Dillon Read initiated coverage of
with a strong buy rating and a price target of 25. Lennox International was up 9/16 to 17 9/16.
was off 1 3/8 to 35 1/8 despite PaineWebber's upgrade to attractive from neutral.
was off 1, or 8.6% to 10 3/4 despite
BancBoston Robertson Stephens
analyst Keith Benjamin's initial buy rating. Merrill Lynch started coverage of the stock with a near-term accumulate and a long-term buy.
was leaping 4, or 6.5%, to 65 3/4 after U.S. Bancorp Piper Jaffray initiated coverage with a strong buy rating.
was up 3/8 to 47 3/16 after it set a multiyear pact valued at more than $400 million with
. The deal calls for
, AT&T's professional services division, to provide global networking management and standardize communications technology capabilities across AlliedSignal's infrastructure. Shares of AlliedSignal were up 1 7/8 to 64 13/16.
The Wall Street Journal
, citing people familiar with the matter, reported that law-enforcement authorities are probing whether
Bank of New York
was among a chain of banks that served as conduits for about $200 million that may have been diverted from loans to Russia made by the
International Monetary Fund
was up 1 3/8 after it said a group led by its
division had been awarded a $214 million contract for the Army's Battle Command Training Program at Fort Leavenworth, Kan. The U.S. Army Training & Doctrine Command, Mission Contracting Activity granted the contract, which includes one base year and four one-year options, potentially reaching $214 million. The training program prepares Army commanders and their staffs for the operational aspects of war using computer-based simulation.
Scientific Applications International
will also contribute to the training program.
analyst Cai von Rumohr upped his rating on Northrop Grumman to buy from neutral and set a 6-to-12-month price objective of 86.