John J. Edwards III
The market dealt with more rattlers today than you'd find in the Arizona desert, with jangled traders sending stocks and bonds flopping to the floor.
Economic reports showing continued strength, the double-witching expiration of options, weak earnings from
-- these vipers and more conspired to knock the
Dow Jones Industrial Average
down 138.88 to 7194.67. The broader
suffered similarly, and the tech-larded
Nasdaq Composite Index
bent under the weight of
and other big losers.
Decliners outweighed advancers on the
New York Stock Exchange
by 1,432 to 979 on volume of 489.8 million shares. On the Nasdaq, decliners beat advancers by 2,152 to 1,996 on volume of 573.4 million.
"If you really look at the volume, the volume's light," said Jeffrey Applegate, chief investment strategist at
. "It was mostly asset-allocation trades and expiry-related programs."
Applegate remarked on the negative reaction to the day's economic reports, which included a surge in April housing starts and a record high in the
University of Michigan Consumer Sentiment Index
. "Consumers are too happy and the bond market doesn't like it," he said. "Hey, that's life. One of these days the bond market's going to learn that G-R-O-W is not a four-letter word."
Applegate believes there's been enough evidence of slowing in recent economic data to stave off a
rate hike Tuesday, but Harvey Hirschhorn, director of equity research at
Stein Roe & Farnham
in Chicago, said he sees the market now having second thoughts about its former firm conviction that the Fed wouldn't act.
Hirschhorn said there should be two different reactions to what he expects will be a rocky few weeks ahead. "I think for traders, buying on weakness here still probably makes some sense," he said. "For investors, for the next couple of months I'd probably be looking for some exit points."
Philip Tasho, head of equity strategy and management at
Riggs Investment Management
in Washington, said investors looking for a safe haven should check out a somewhat surprising place: small-caps. He noted that the
index of small-cap issues slipped less than a point amid today's selloff.
"One thing that I've noticed here is that in my opinion we have a transition taking place," Tasho said. "The valuation of small-caps is so compelling. As the market corrects, small-caps are holding up better. The whole group is very attractive to me."
Hewlett-Packard accounted for 21.02 points of the Dow's decline with its loss of 6 3/8 to 52 1/2. The company late yesterday reported second-quarter earnings of 75 cents per share, 5 cents short of the
consensus expectation. Other computer makers were lower, including
, off 3 7/8 to 170,
, off 2 to 94 1/4, and
, off 1 1/4 to 94.
bucked the trend, rising 1 to a 52-week high of 69 3/4.
plunged 5 3/8 to 29 1/4 after warning in a
Securities and Exchange Commission
filing that it expects rising costs to hurt earnings.
A federal judge dismissed claims of fraud and promissory estoppel (doesn't he host
?) filed by
. News Corp. is seeking -- so far entirely unsuccessfully -- to force Time Warner to place its
channel on TWX's New York cable systems. News Corp. rose 1/8 to 17 7/8 despite the setback. Separately,
is quietly shopping a big block of TWX shares, possibly helping
to shed its take in the media conglomerate. Time Warner was up 1/2 to 47 3/4 and Seagram slipped 1/8 to 38 5/8.
U S West Media Group
put the finishing touches to a $5 billion deal merging U S West's domestic cellular business and its interest in
PrimeCo Personal Communications
into AirTouch. U S West separately said it would transfer its domestic directory business from the Media Group to
U S West Communications Group
. U S West Media gained 5/8 to 19, AirTouch was unchanged at 25 3/4 and U S West Communications slid 1/4 to 34 7/8.
crumbled 3 7/8 to a 52-week low of 17 1/4 after
SoundView Financial Group
reportedly raised concerns about pricing pressures on the company.
cast a glance askance at some fishy moves by insiders in an
April 29 story.
lost 1 3/8 to 10 1/16 after saying it plans to raise cash and refinance its leases to keep its business running smoothly. Other database software concerns also slipped, with
down 1 1/2 to 44 3/8 and
down 5/8 to 15 1/2.
leapt 3 7/8 to a 52-week high of 18 on a
report that a British consumer-products company plans to bid $24 per share for the company.
gave up 2 1/2 to 30 1/2 after a federal jury found in favor of privately held
Applied Medical Resource
in a patent suit.
cut USS to hold from buy.
skidded 1 1/8 to 66 after
lowered its near-term rating to accumulate from buy. Merrill maintained a long-term buy.
Citing those annoying TV frogs -- oh, all right, the stock's price -- Lehman Brothers downgraded
to neutral from buy. The beer baron dribbled down 1 1/4 to 43.
Yea, though I walk down Broad Street in the shadow of the Stock Exchange.¿
International Family Entertainment
, whose voting Class A shares are controlled by televangelist
and his son Tim, saw its publicly traded Class B shares hop 1 1/2 to 24 1/8 after the company said it's in negotiations that may lead to some kind of deal. The company owns the
and other TV properties.
added 3/8 to 25 amid rumors that money manager Michael Price had taken a stake in the magazine publisher. Price denied that in an interview with
Orion Network Systems
jumped 7/8 to 11 3/4 after
initiated coverage at outperform.
On the heels of
(AMZN:Nasdaq) successful IPO
(LHSG:Nasdaq) debuted today at 16 and ascended 3 1/4 to 19 1/4.
plummeted 1 15/16 to 6 after filing for a five-day extension for the filing of its Form 10-Q. The company said it will report its first-quarter earnings no later than Tuesday.
ERICY ADR) rose 1/8 to 35 1/8 after a Swedish newspaper reported that the company expects to sell 50 million mobile phones in 2000 out of a total market of 300 million.
initiated coverage of Ericsson at buy.
MPARY ADR) fell 1 3/4 to 12 53/64 after reporting a first-quarter loss of 1 cent per share, matching the year-ago figure. First Call has no estimates for the company.