SAN FRANCISCO -- Market proxies mainly spun their wheels today in the uncertain path laid by the coming storm of earnings and economic data. But the
Dow Jones Industrial Average
managed to attain another record while its two biggest counterparts dipped only modestly from
Friday's historic levels.
Few complaints were heard about the relative lack of oomph, however. Most market players lauded the stock market's recent performance (especially by the Dow and big-cap techs) and mainly squared positions as they girded themselves for a heavy-duty news week.
A tumult in Argentina was the dominant force in financial circles today, although U.S. equity markets largely ignored the developments. Bonds, however, benefited from concerns about Argentina's commitment to pay its debts, political infighting and possible rating agency downgrades. As the Argentine bourse's benchmark measure, the
, fell 8.7%, the price of the 30-year Treasury bond rose 1 7/32 to 90 27/32, its yield declining to 5.91%.
Some big financial stocks followed bonds higher but the remainder of the equity market was largely unfazed.
The Dow industrial average closed up 7.28, or 0.1%, to 11,200.98 after trading as low as 11,149.69, notching its second-straight new high.
Big Dow influences included
, up 2.4% after an upgrade from
Warburg Dillon Read
, and cyclical plays such as
led Dow decliners, sliding 1.5%.
Despite worries about
Friday night's jury decision,
rose 3.9%. Meanwhile,
added 0.7% after announcing it will combine its
Buena Vista Internet Group
and offer a tracking stock for the newly formed company,
Infoseek, however, dumped 10.8% as Net stocks in general declined and investors frowned upon the lack of premium in the Disney deal.
TheStreet.com Internet Sector
index shed 6.05, or 0.9%, to 658.79, with the biggest damage coming from bellwethers such as
. Each fell more than 6%, while
Outside the DOT,
fell 5.8% after another site outage this weekend.
Saddled by the slumping online names, the
Nasdaq Composite Index
dipped as low as 2774.77 and closed off 2.63, or 0.1%, to 2790.44 after trading as high as 2812.35.
Strength in traditional tech bellwethers kept the Comp from losing substantive ground. Most notably,
gained 3.1% to an all-time high and
rose 1.9% after an upgrade from
rose over 1% each. Still, the
Among other tech notables,
rose 3.1% in
New York Stock Exchange
trading after a favorable article in
The Wall Street Journal
closed off 4.15, or 0.3%, to 1399.13 after trading as high as 1406.82.
Despite mixed market internals, broader market averages advanced. The
gained 1.32, or 0.3%, to 459.30 while the
American Stock Exchange Composite Index
gained 2.81, or 0.4%, to an all-time high of 815.54.
"This is still decent behavior in the market," said Barry Hyman, senior market strategist at
Ehrenkrantz King Nussbaum
. "Today was a quiet day, as it should be,
but with all the confusion, the Dow closed up."
Hyman believes the "background" is set for the market to continue to move higher -- noting prospects for strong second-quarter earnings and a recent decline in bond market yields. The strategist pegs "fair value" for the S&P 500 at 1425 (equivalent to roughly 11,400 for the Dow), while acknowledging "without the
taking away that red light, this rally wouldn't have been so vigorous."
Regarding today's action, "I like the fact tech is strong and leadership stocks are playing the role," he said. "Sun
Microsystems hit a 52-week high again, and, more importantly, the technical pattern of Dell has turned extremely positive. Tech is the leader.
Investors don't have to go way beyond to look for winners."
Given the strength of traditional tech bellwethers, Hyman was largely unconcerned by the downturn in Net names.
"Internet stocks have been performing well -- TheStreet.com Internet
Sector index had a tremendous move off the bottom and got overbought," he said. "The disappointment today is in how Disney is valuing Infoseek."
In NYSE trading, a modest 672.1 million shares were exchanged while declining stocks led advancers 1,631 to 1,371. In
Nasdaq Stock Market
action 985.5 million shares traded while gainers led 2,065 to 1,923. New 52-week highs bested new lows 115 to 51 on the Big Board and by 231 to 32 in over-the-counter trading.
An email last week from William Erman, founder of
Ermanometry Research, identified July 9 (plus or minus one day) as an "Ezone" for the stock market. According to Ermanometry, the market is like an 18-wheeler steaming along a highway and can only change direction at a major interchange, or Ezone.
Ermanometry uses intraday highs as its indicators vs. closing highs. The Dow set an intraday high of 11,236.76 Tuesday while the S&P's intraday best was set today, Erman noted in a phone interview today. Thus, Thursday is the "balance point" between the two averages and "assuming neither makes higher highs tomorrow," Friday remains the "focus day" for the Ezone, he said.
It's a bit complicated (if not arcane) but the basic message is Erman is "bullish for the next five to six weeks," or until the next Ezone occurs, likely in the last week of August or first week of September. Until then, expect "nothing more" than a 4% "reaction area" (or retrenchment) for the major averages, he said.
Among other indices, the
Dow Jones Transportation Average
rose 4.57, or 0.1%, to 3431.89 and the
Dow Jones Utility Average
slid 1.41, or 0.4%, to 320.30.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
lost 4.96 to 7193.21 and the
Mexican Stock Exchange IPC Index
fell 119.50, or 2%, to 5769.37.
Monday'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.
Infoseek sliced off 5 9/16, or 10.8%, to 45 15/16 following news Disney will combine its Buena Vista Internet Group with Infoseek and offer a tracking stock for the newly formed company, to be called go.com. Infoseek shareholders will receive 1.15 shares of go.com for each share held. Disney, which currently owns a 42% stake in Infoseek, will have about a 72% stake in go.com. The Mouse added 3/16 to 27 13/16. (
rumors of such plans from Disney last month.)
lowered 1 15/16 to 52 3/4 despite word Infoseek will use the company's private-label white pages as the
Mergers, acquisitions and joint ventures
, a medical-products maker, grew 3 5/16, or 5.4%, to 64 3/16 after saying it plans to spin off its cardiovascular business, creating a new publicly traded company with sales of nearly $1 billion.
raised the stock to buy from market performer with a 12-month price target of 77.
upped it to buy from accumulate.
Central Garden & Pet
dropped 1 3/8, or 13.4%, to an annual low of 8 7/8 after
said it will change its distribution system for some products, altering its pact with the company. Central Garden will take an unspecified charge in 1999 to realign its distribution operations. Scotts lowered 3 1/8, or 7.1%, to 41 1/16.
picked up 1 1/8 to 68 3/8 on word it's buying Chicago-based market maker
for $531 million in stock, options and cash.
tacked on 7/16 to an all-time high of 137 13/16 after announcing it would buy
for $810 million in cash. Sequent gave up 3/16 to 17 9/32. Rumors of the takeout emerged in the options market in
Separately, online computer retailer
shot up 1, or 10.3%, to 10 7/8 after saying it will sell IBM's full line of PCs.
flew 6 9/16, or 16.1%, to 47 5/16 after Britain's
Royal & Sun Alliance Insurance Group
agreed to buy it for about $1.4 billion in cash.
Peoples Bank Corp. of Indianapolis
rocketed 23 7/8, or 51.9%, to an all-time high of 69 7/8 after
Fifth Third Bancorp
agreed to acquire it for $73 a share. Fifth Third, which shaved off 7/16 to 66 9/16, will exchange 1.09 shares for each share of Peoples Bank.
Red Roof Inns
flourished 4 1/4, or 23.2%, to an all-time high of 22 9/16 on news
, a French hotel group and owner of
, is acquiring the company for $1.1 billion, including debt.
added 13/16 to 20 7/8 after
said it will invest $400 million in the company. Mister Softee rose 1 to 94 3/16.
climbed 1 1/8 to 30 1/4 after agreeing to sell its personal insurance operations to
MetLife Auto & Home
, a subsidiary of
Metropolitan Life Insurance
, for about $600 million.
picked up 1/2 to 64 13/16 after announcing it will spin off its contract drilling business and combine it with
. Transocean Offshore jumped 7/8 to 29 7/8. Schlumberger shareholders will have a majority stake in the resulting company, called
Transocean Sedco Forex
. The deal, which should close by year's end, is expected to be modestly dilutive to Transocean Offshore's 2000 earnings but accretive after that.
World Color Press
advanced 5 3/16, or 17.4%, to 35 on word
will take over the Greenwich, Conn., firm in a stock and cash deal valued at $2.7 billion, including debt. Quebecor Printing slid 177/256 to 22 255/256.
Earnings/revenue reports and previews
tumbled 2 1/8, or 5.6%, to 36 1/16 after posting third-quarter earnings of 5 cents a share, beating the 11-analyst estimate of 3 cents and moving up from the year-ago 3 cents.
rose 13/16 to 72 1/4 after reporting second-quarter earnings of 87 cents a share, a penny above the 13-analyst consensus and up from last year's 78 cents.
, a supplier of transportation equipment and services to the railroad industry in North America, slipped 1/16 to 10 15/16 after reporting third-quarter earnings of 43 cents a share, in line with the six-analyst estimate and up from the year-ago 38 cents.
In other earnings news:
stormed up 6 7/8, or 24.7%, to an all-time high of 35 after
Credit Suisse First Boston
lifted it to strong buy from buy.
swelled 1 11/16, or 7.7%, to 23 9/16 after
Morgan Stanley Dean Witter
upgraded the stock to outperform from neutral with a price target of 30.
added 2 5/16 to an all-time high of 79 1/4 after
Salomon Smith Barney
initiated coverage with a rating of strong buy with medium risk.
excelled 1 3/4, or 6.2%, to 29 7/8 after
Donaldson Lufkin & Jenrette
raised it to buy from market perform.
Dell rallied 13/16 to 43 5/8 after SG Cowen pushed up the stock to strong buy from buy.
zoomed up 2 7/8, or 31.1%, to an all-time high of 12 1/4 after
BancBoston Robertson Stephens
Hambrecht & Quist
started coverage with buys.
U.S. Bancorp Piper Jaffray
initiated coverage with a strong buy.
Kodak hopped up 1 11/16 to 72 13/16 after Warburg Dillon Read raised it to buy from hold.
popped up 1 5/16, or 9.8%, to an all-time high of 14 13/16 after
Deutsche Banc Alex. Brown
and DLJ initiated coverage with buy ratings.
expanded 5/8 to 88 1/8 after Merrill Lynch raised it to buy from accumulate.
slouched down 1 1/2 to 43 11/16 after Deutsche Banc Alex. Brown cut it to buy from strong buy.
Dow component General Motors revved up 2 9/16 to 68 11/16 despite Friday's after-the-close news that a California jury ordered the company to pay $4.9 billion to six people burned when the fuel tank of their
exploded after getting rear-ended. It seemed investors are confident the ruling will be revised, if not overturned completely.
Northeast Optic Network
shot up 12 1/2, or 71.4%, to an all-time high of 29 7/8 after it was called a "pioneer" in deploying
AllWave fiber in the
Gilder Technology Report
, an influential tech newsletter.
picked up 3/8 to 37 3/8 after the
Food and Drug Administration
approved the company's
drug. It will be the first topical drug sold to prevent heartworm disease in dogs and cats.