Unencumbered by the bond market's nettlesome inflation worries (and supply issues), growth stocks frolicked in fields of azure today, while blue-chips skipped along a few paces behind. Net stocks set a heady pace among prancing high-techs, but recently soporific retailers and select drugmakers also joined the festivities.
There was nothing festive in fixed-income, however. The price of the 30-year Treasury bond shed 17/32 to 91 25/32, its yield rising to 5.83%. Fixed-income trading was hampered by the
$15 billion auction of five-year notes, tomorrow's pending sale of $12 billion of 10-year notes, plus economic data due later in the week and the
Federal Open Market Committee's
meeting a week from today. Bearish comments from Stanley Druckenmiller of
Soros Fund Management
added to the bond market's misery.
Unscathed by bonds, the online sector got a lift from
Morgan Stanley Dean Witter's
influential Internet analyst Mary Meeker (a.k.a. "Queen of the Net," a.k.a. "Big Net Momma"), who upped her recommendation on
to strong buy from outperform.
AOL jumped 8.7%, helping
TheStreet.com Internet Sector
index rise 18.76, or 3%, to 654.09. Among other DOT components,
gained 10.3% after last night announcing plans to repurchase up to $100 million shares, while
jumped 10.8% after
initiated coverage with a strong buy. Additionally,
sported a gain of 11.8%.
Elsewhere in Netland,
, publisher of this Web site, rose 216% from its IPO price of $19. Separately, the IPO of semiconductor firm
rose 73.1% from its offering price of $13.
Traditional tech bellwethers were also higher today, but couldn't quite keep pace with their Internet brethren. The
Nasdaq Composite Index
climbed as high as 2574.37 before closing up 40.29, or 1.6%, to 2566.68.
The Comp also got a boost from
, which leapt 33.3% after announcing it will seek expanded markets for
, its rheumatoid arthritis drug.
Among Nasdaq tech bellwethers
were the best performers, rising 2.7% and 2.4%, respectively. The
After the close, Cisco reported third-quarter earnings of 38 cents a share, a penny above the 31-analyst estimate and up from 30 cents a year ago. The networking giant also set a 2-for-1 stock split.
Dow Jones Industrial Average
closed up 18.90, or 0.2%, to 11,026.15 after rising as high as 11,102.32. The venerable average fell as low as 10,970.59 heading into the final hour as the bond market stumbled.
led Dow gainers, seconded by
led index laggards although financials in general withstood the bond market's woes. The
American Stock Exchange Broker/Dealer Index
was among the Dow's best performers, rising 4.8% after reporting first-quarter earnings of 25 cents a share vs. the 20-analyst estimate of 22 cents and year-ago results of 19 cents. The
S&P Retail Index
, up 2.8%, was further inspired by
, which gained 5.1% thanks to an upgrade from
Goosed mainly by techs, retailers and select pharmaceuticals such as
rose 15.31, or 1.1%, to 1355.61. The
, meanwhile, continued merrily along on its recent rise, climbing 4.96, or 1.1%, to 446.81.
"When bonds sold off we saw the market come down a bit, but some hedge funds I speak to liked the market here today, and I haven't heard that with quite as much conviction in a while," said Samuel Ginzburg, managing director of equity trading at
. "But if we break 118
on the bond futures contract we'll get more people paying attention to the bonds and that maybe brings down equities. It could be a short-term negative."
The June bond futures contract closed at 118 7/32 today.
New York Stock Exchange
trading, 843.8 million shares were exchanged while gainers led losers 1,708 to 1,276. In
Nasdaq Stock Market
activity, 961 million shares were exchanged while gainers led 2,221 to 1,803. New 52-week highs led new lows 105 to 12 on the Big Board and by 118 to 33 in over-the-counter trading.
Home, Home on the (Trading) Range
"We tried to break out today, but it ain't time to yet," said Scott Bleier, chief investment strategist at
. "Everybody I know is talking about this consolidation just south of all-time highs is just simply a phase, a pause before we step up to the next level. Things are going so silky smooth. Of course, that gives you pause to worry."
Earlier this month, Bleier observed, the S&P 500 established a "domed top" in its chart pattern and has recently struggled to get back above the bottom of the dome at 1360. But the index enjoys a "big slug of support" between 1320 and 1330, he said.
"Traditionaly this kind of consolidation leads to breakout, but No. 1, there's this domed pattern, and No. 2, yields continue to go higher," the strategist said. "On the flip side, we're putting in a decent bottom in the low 1300s. We're in this trading range. I cannot call whether they're going to break out or break down. In the meantime, trading ranges are meant to be traded, so I'm going to trade it."
Conceding "every cynical bone in my body says it shouldn't be," Bleier believes a breakout is more likely than a breakdown.
"Bonds keep going lower and yields higher but the market keeps plugging along in relatively easy fashion," he said. "There's still a huge demand for IPOs shopped by the best investment banks and demand for
growth names is still there," he added, noting big gains by
Among other indices, the
Dow Jones Transportation Average
rose 39.01, or 1.1%, to 3770.91; the
Dow Jones Utility Average
shed 0.03 to 314.78; and the
American Stock Exchange Composite Index
rose 2.21, or 0.3%, to 789.29.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
rose 13.50, or 0.2%, to 7010.63 and the
Mexican Stock Exchange IPC Index
shed 99.38, or 1.6%, to 5981.09.
Tuesday'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.
As noted above, America Online jumped 13 1/8, or 10.2%, to 141 7/16 after Morgan Stanley Dean Witter's Mary Meeker upgraded the stock to strong buy from outperform. Separately, AOL said it entered partnerships with four companies to develop its
product. The companies are the
Hughes Network Systems
Mergers, acquisitions and joint ventures
Empire District Electric
climbed 4 1/4, or 20%, to 25 1/2 after
agreed to buy the company in a stock and cash deal valued at $800 million, including the assumption of debt. UtiliCorp lowered 1/4 to 23 15/16.
soared 4 3/32, or 118%, to an annual high of 7 9/16 after saying it will acquire
for $85 million in stock. According to the deal, Meridian Data stockholders will receive 0.49 of a Quantum share for each share owned. Separately, Quantum, which lifted 1 3/16, or 6.2%, to 20 7/16, announced plans to buy back up to $200 million in stock.
vaulted 10 1/2, or 27.5%, to an all-time high of 48 7/8 after
last night agreed to acquire the 88% of the company it doesn't already own for $50 a share. International Speedway spiked up 4 1/2, or 9.4%, to 52 3/4.
drove up 3 3/8 to 109 1/2 after signing a 12-month agreement calling for
U S West
to buy up to $120 million in wireless phones from the company. Separately, U S West named CEO and President Sol Trujillo its new chairman, replacing Richard McCormick, who is retiring. U S West picked up 2 1/8 to 57 1/16.
gave up 1 3/4 to 86 1/8 after announcing just before the closing bell it's not in a merger agreement with Spain's
. Telefonica sliced off 1 3/16 to 148.
Earnings/revenue reports and previews
tacked on 9/16 to 35 15/16 after posting first-quarter earnings of 17 cents a share, a penny better than the 14-analyst estimate and up from the year-ago 14 cents.
shaved off 5/16 to 9 9/16 after reporting first-quarter earnings of 10 cents a share, 2 cents ahead of the two-analyst estimate and up from 10 cents a year ago.
added 1/8 to 13 15/16 after recording first-quarter earnings of 16 cents a share, 10 cents better than the six-analyst view and reversing the year-ago loss of 5 cents.
swelled 2 1/2, or 7.5%, to 35 3/4 after posting a first-quarter loss of $.160 a share, wider than both the seven-analyst outlook for a loss of $1.29 and the year-ago loss of 83 cents.
climbed 3/16 to 13 1/16 after reporting first-quarter funds from operations of 50 cents a share, a cent better than the six-analyst prediction but down from the year-ago 64 cents.
advanced 1 1/16, or 10.4%, to 11 1/4 after reporting first-quarter earnings of 19 cents a share, 2 cents better than the 14-analyst estimate and up from the year-earlier 15 cents.
excelled 7/32, or 6.7%, to 3 17/32 after reporting a first-quarter loss of 33 cents a share, 2 cents better than the eight-analyst outlook but down from the year-ago 18 cents. The company said it plans to sell off its operations in Spain.
tumbled 2 11/16, or 8.2%, to 30 1/4 after reporting first-quarter earnings of 16 cents a share, 3 cents higher than the eight-analyst forecast and ahead of the year-ago 9 cents.
Ritchie Bros. Auctioneers
slid 1 7/8, or 5.1%, to 34 3/4 after announcing first-quarter earnings of 10 cents a share, 2 cents above the five-analyst estimate but behind the year-ago 24 cents.
bubbled up 2, or 6.5%, to 32 15/16 after reporting first-quarter earnings of 42 cents a share, a nickel above the five-analyst view and ahead of the year-ago 30 cents.
sank 1 9/16, or 5.4%, to 27 7/16 after recording a second-quarter loss of 84 cents a share, 7 cents wider than the three-analyst prediction and wider than the year-ago loss of 17 cents.
Total Renal Care
lowered 13/16, or 5.3%, to 14 1/2 after reporting first-quarter earnings of 34 cents a share, in line with the 10-analyst forecast and up from the year-ago 27 cents. The company said it's targeting 20% earnings and revenue growth in 1999.
Wal-Mart hopped up 2 1/8 to 47 5/16 after reporting first-quarter earnings of 25 cents a share, 3 cents higher than the 19-analyst expectation and up from the year-ago 18 cents. Same-store sales rose 9.3% year-over-year.
Offerings and stock actions
dropped 7 3/16, or 8.7%, to 76 3/8 after filing with regulators to offer 4 million shares of stock.
Network Associates jumped 1 1/4, or 10.3%, to 13 1/2 after last night announcing plans to buy back up to $100 million in stock.
lost 3/8 to 52 15/16 after setting a 3-for-2 stock split.
As noted above, TheStreet.com Inc., the publisher of this Web site, rose 41 1/16, or 216.1%, to 60 on 13.5 million shares after
priced its 5.5 million-share IPO top-range at $19 a share last night.
Elsewhere in new issues, Maker Communications shot up 9 1/2, or 73.1%, to 22 5/8 on 6.2 million shares after
priced its 3.35 million-share IPO top-range at $13 a share. Maker is a semiconductor firm that makes and markets processors, development tools and applications software for use in communications systems.
Home Depot advanced 2 7/8, or 5.1%, to 59 1/4 after PaineWebber lifted it to attractive from neutral.
Kansas City Southern Industries
leapt 3 3/4, or 6.9%, to 58 1/8 after
raised it to intermediate-term accumulate from neutral while maintaining its long-term buy.
tacked on 3 15/16, or 5.6%, to 74 1/2 after Lehman Brothers initiated coverage at outperform, setting a price target of 80 a share.
soared 6 11/16, or 10.6%, to 70 after
BT Alex. Brown
pushed up the stock to buy from market perform. This afternoon, the company set a 2-for-1 stock split.
expanded 4 1/4, or 6.2%, to 73 3/8 after Merrill Lynch lifted it to accumulate from neutral.
tanked 1 7/16, or 12.9%, to 9 11/16 after Morgan Stanley Dean Witter downgraded it to neutral from outperform.
kicked up 2 11/16 to an annual high of 65 1/2 after Goldman Sachs placed the stock on the firm's recommended list, upping it from market outperform.
grew 1 1/4, or 5.3%, to an all-time high of 25 after Morgan Stanley Dean Witter initiated coverage of at outperform.
flew 3 1/4 to an all-time high of 87 7/8 after Goldman Sachs added the stock to its recommended list, upgrading it from a market outperform.
USWeb jumped 2 9/16, or 10.8%, to 26 5/16 after Prudential Securities started coverage of the stock with a strong buy.
jumped 4 3/8, or 18.1%, to 28 9/16 after receiving the same upgrade from the firm.
Immunex rocketed 35 1/2, or 33.3%, to an all-time high of 142 5/16 after late
yesterday saying it plans to seek federal approval to market
to early-stage rheumatoid arthritis patients. The drug is already approved for later-stage RA patients. Today,
raised the stock to intermediate-term buy from accumulate.
American Home Products
, which owns a majority stake in Immunex, grew 2 7/8 to 62 5/8. Merrill Lynch raised its recommendation to intermediate-term buy from accumulate.
lifted 4 to 85 7/8 after a group of current and former executives bid $1.6 billion for the company's semiconductor parts group. Also,
U.S. Bancorp Piper Jaffray
started coverage of Motorola with a buy and a six-month price target of 105 a share.
shot up 11 13/16, or 38.3%, to 43 1/16 after setting the launch of a unit called
. The company also said it would acquire
in a deal whose terms weren't disclosed. Reuters will hold a minority stake in SportsLine Europe, as will Intel and
, a unit of
. Reuters added 2 7/16 to 85; Intel added 1 5/8 to 62 5/16; and MediaOne declined 1 3/4 to 76 13/16.
Yahoo! popped up 18 5/16, or 11.8%, to 174 after unveiling
, a 10-station Internet radio network offering continuous music, in partnership with its pending merger partner
. broadcast.com vaulted 13 1/8, or 11.5%, to 128 1/2.