'Incredible,' Yahoo!-Fueled Nasdaq Leaves Broad Market Behind
Considering the head-scratching that market observers have been doing lately at the performance of the
Nasdaq Composite Index
, today one could conclude that some of those scalps have to be bleeding.
The Nasdaq Comp soared 40.83, or 1.1%, to 3586.84, defying those calling for it to take a break. The Comp closed at another all-time high and hit an all-time intraday high when it peaked at 3589.06. The advance wasn't exactly remarkably inclusive. Breadth on the
Nasdaq Stock Market
was negative. Volume was heavy on the Nasdaq with 1.557 billion shares changing hands, the third-heaviest day of trading ever. Volume on the Big Board was also heavy with 1.06 billion shares changing hands.
Yahoo!: Join the discussion on
TSC
message boards.
The Comp, never lacking in astounding moves by its components, perhaps outdid itself today.
Yahoo!
(YHOO)
-- which as of today's close became a member of the
S&P 500
-- skyrocketed 67 1/4, or 24%, to an all-time high of 348.
In tech, networking and telecommunications stocks were standouts and helped boost the Comp. The
American Stock Exchange Networking Index
advanced 2.1%.
Cisco
(CSCO) - Get Report
, a member of the networking index and a heavyweight in the Comp, hit an all-time intraday high today at 102 7/16. It closed up 3 5/16 to 101 1/2. Elsewhere,
Ciena
(CIEN) - Get Report
soared 27.3%. The
Nasdaq Telecommunications Index
jumped 1.5%.
TheStreet.com Internet Sector
index rose 14.23, or 1.3%, to 1058.87, to close at an all-time high. The DOT also hit an all-time intraday high today when it peaked at 1064.76. Yahoo! was the biggest gainer by far in the DOT.
Schroder
raised its price target on the stock today to 350 from 225. Yahoo! hit an all-time intraday high of 353.
TheStreet.com
Red Hots index soared 16.69, or 4.8%, to 364.11. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.
But stocks overall stumbled as players pared back positions in light of last week's advance. And while the Comp's momentum continued, the rest of the market's major gauges fell.
The
Dow Jones Industrial Average
fell 118.36, or 1.1%, to 11,106.65. Some of the beefiest losers in the Dow included
Coca-Cola
(KO) - Get Report
,
3M
(MMM) - Get Report
and
General Motors
(GM) - Get Report
.
Dan Marciano, head of trading at
First Albany
, said the market is acting pretty well despite today's decline overall. "I'm pretty optimistic," he said.
"I'd look for an up market into the end of the year," the trader said. The trader did say, however, that some people are nervous because the market's so high, pointing to the fiery Comp.
The S&P 500 fell 14.17, or 1%, to 1409.17. The small-cap
Russell 2000
slipped fractionally to close at 465.68.
"I would expect the markets are due for some consolidation," said Paul Cherney, market analyst at
S&P MarketScope
, with some sideways movement with perhaps a negative bias. He noted that "there's usually a mid-December low that launches a year-end rally."
Cherney pointed out that the same "group-think" that has pushed up highflying sectors can work the other way too.
Cherney said that put/call ratios were at excessive levels, with the ratios of 30-day moving averages at levels that can precede a selloff. "Usually when you get very low put/call ratios over an extended period of time, that says to me that the bears have thrown in the towel and they're no longer attempting to buy puts," he said.
The analyst said that if the market "continues to ramp higher without any sort of digestion," the market could tumble on the first or second trade of 2000 as investors and traders sell on the news that the rollover into 2000 wasn't a disaster.
Of the Comp's recent performance: "It's just incredible," he said.
The 30-year Treasury bond advanced 22/32 to 98 30/32, yielding 6.20%. The long bond was buoyed in part by a
Fed
coupon pass.
But the improvement in the bond market didn't hearten bank stocks. The
Philadelphia Stock Exchange/KBW Bank Index
gave up 2%. However, brokerage stocks gained. The
American Stock Exchange Broker/Dealer Index
soared 2.8%.
Gaming stocks flew. The
Chicago Board Options Exchange Gaming Index
soared 3%, led by
Mirage Resorts
(MIR)
, which rallied after
Lehman Brothers
upgraded the stock to buy from neutral. Mirage gained 7.4%.
Gold mining stocks soared as gold prices hopped. The
Philadelphia Stock Exchange Gold and Silver Index
rallied 4.8%.
Today's individual stock debacle was
VISX
(VISX)
, which tumbled on that an
International Trade Commission
judge ruled that a VISX competitor didn't infringe on VISX's patent.
TheStreet.com/NYTimes.com
joint newsroom wrote about the situation in a story
today.
Conversely, momentum players pushed up shares of
Red Hat
(RHAT)
,
Juniper Networks
(JNPR) - Get Report
,
Infosys Technologies
(INFY) - Get Report
,
Commerce One
(CMRC)
and
F5 Networks
(FFIV) - Get Report
to whopping gains.
In
New York Stock Exchange
trading, 1.060 billion shares were exchanged while declining stocks beat advancers 2,025 to 1,046. On the Nasdaq, losers beat winners 2,138 to 1,992. New 52-week lows beat new highs 338 to 86 on the Big Board, while new highs beat new lows 274 to 142 in over-the-counter trading.
Among other indices, the
Dow Jones Utility Average
fell 5.40, or 1.9%, to 275.91. Elsewhere, the
Dow Jones Transportation Average
advanced 19.36, or 0.7%, to 2886.16 and the
American Stock Exchange Composite Index
rose fractionally to close at 830.02.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
gained 31.58 to 7889.1 and the
Mexican Stock Exchange IPC Index
lost 27.86 to 6397.84.
Tuesday's Company Report
By
Tara Murphy
Staff Reporter
(
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.
)
Mergers, acquisitions and joint ventures
BP Amoco
(BPA)
fell 9/16 to 59 1/2 and
Exxon Mobil
(XOM) - Get Report
slipped 1/16 to 83 7/8 after the companies said they will dissolve their European fuel and lubricants joint venture and divide up the assets in line with their equity stakes. Mobil had to sell its 30% interest in the fuel business as a condition of European regulatory approval of its merger with Exxon. BP Amoco will pay about $1.5 billion for Mobil's stake, which includes its pipeline at London's Gatwick Airport.
Goldman Sachs
raised Exxon Mobil to its recommended list from market outperformer. For more on BP Amoco's
buy, check out a separate story from the
TheStreet.com/NYTimes.com
joint newsroom.
The
European Commission
said it granted regulatory approval to the full buyout of Dutch company
Eurotronics
by
Avnet
(AVT) - Get Report
. Shares of Avnet fell 7/8 to 57 5/16.
A unit of
El Paso Energy
(EPG)
said it will buy
Dynegy
(DYN)
for $255 million. El Paso Merchant Energy said the deal involves Dynegy's California co-generation plants. Shares of El Paso dropped 1 1/16 to 35, while Dynegy was unchanged at 21 15/16.
Hexcel
(HXL) - Get Report
lost 1/16 to 5 1/2 after saying it has retained
Credit Suisse First Boston
to explore alternatives for its Engineered Products business, including a possible sale.
Microsoft
(MSFT) - Get Report
lost 2 7/16 to 93 after it signed a range of deals to support its Internet video and audio delivery software and said it saw continued momentum for its Internet services. Of the companies with which Microsoft struck agreements:
General Instrument
(GIC)
fell 1.4% to 74 3/4,
Texas Instruments
(TXN) - Get Report
shed 3 1/4 to 104 1/16 and
Thomson Multimedia
(TMS)
slipped 1/4 to 45 3/8.
NEC
(NIPNY)
rose 1 1/8 to 114 1/4 after a report in the
Nihon Keizai Shimbun
said it has signed a contract to lease semiconductor-fabrication equipment from U.S. leasing firm
Comdisco
(CDO)
. The major Japanese electric machinery manufacturer is making the move to shrink asset holdings and improve profitability. By the end of the year, NEC will sell Comdisco equipment -- installed this autumn -- worth about 28 billion yen. NEC then plans to lease the equipment back from Comdisco. Shares of Comdisco rose 1/2 to 26 3/16.
News Corp.
(NWS) - Get Report
slipped 3/8 to 38 7/16 and
Healtheon
(HLTH)
gained 15/16 to 46 7/16 after the companies said they formed a $1 billion partnership in which News Corp. will take a 10.8% stake in the online health network to move into the health programming arena. The financial terms include $700 million in branding services provided by News Corp. over 10 years and a $100 million purchase of Healtheon/WebMD stock at $50 a share. The alliance also includes a $100 million cash investment by News Corp. in an international joint venture and a $62.5 million five-year licensing agreement for syndication of WebMD daily broadcast content.
Banc of America Securities
upped its rating on Healtheon to buy from market performer. For more on News Corp.'s
new friend, check out a separate story from the
TheStreet.com/NYTimes.com
joint newsroom.
Nextlink Communications
(NXLK)
gained 2 1/2 to 55 7/8 after it said it will buy the 50% stake in venture firm
Internext
that it doesn't already own from holding company
Eagle River
for $220 million in Nextlink stock, or 4.1 million common shares.
Prodigy Communications
(PRGY)
was unchanged at 24 11/16 and
Priceline.com
(PCLN)
rose 1/2 to 61 1/12 after the companies said they have entered a deal which calls for Priceline customers to register for Prodigy's Internet service and then receive bidding "dollars" to use for Priceline.com's "name-your-own-price" airline tickets and hotel rooms.
Provident American
(PAMC)
gained 2 11/16, or 8.4%, to 34 1/2 after it said its
Healthaxis.com
unit will merge with a unit of
UICI
(UCI) - Get Report
. UICI lost 1 9/16, or 6.4%, to 23 1/16. Provident said each company's shareholders will own 50% of the new Healthaxis.com, which will receive a $57 million equity investment.
Toronto-based
Scott's Restaurants
and its U.S. partner
Tricon Global
(YUM) - Get Report
said it was forming a new company to operate its Canadian fast food chains, Pizza Hut, Kentucky Fried Chicken and Taco Bell. Tricon rose 3/16 to 40 1/4.
Vodafone AirTouch
(VOD) - Get Report
slipped 1/4 to 52 3/4 after it said it has chosen
Ericsson
(ERICY)
to supply its infrastructure for its next-generation network technology in Britain, the Netherlands and Greece. Ericsson lost 9/16 to 58 11/16. The General Packet Radio Service (GPRS) technology will let mobile customers access services such as train timetables, directions and online shopping.
Separately, U.S. regulators approved the planned combination of the U.S. wireless operations of
Bell Atlantic
(BEL)
and Vodafone, as long as the companies eliminate some overlapping properties, Bell Atlantic said. Shares of Bell Atlantic slipped 3/8 to 64.
Earnings/revenue reports and previews
Avon
(AVP) - Get Report
lost 1/2 to 34 3/16 despite saying it is comfortable with its 1999 earnings estimate of $1.64 per share. Avon also said it comfortable it can at least meet the seven-analyst estimate of 29 cents for its first quarter. Avon also said it would invest $30 million in an Internet site in 2000.
H.J. Heinz
(HNZ)
climbed 9/16 to 43 11/16 after it reported second-quarter earnings of 65 cents a share, a penny better than the 17-analyst estimate and up from 60 cents a year ago. Heinz said it was comfortable with third-quarter estimates of 62 cents and fourth-quarter estimates of 63 cents. The current 15-analyst estimate from
First Call/Thomson Financial
is for 63 cents a share in each of those quarters. Heinz also said it was on track to deliver a year-end target of 6% to 7% earnings-per-share growth.
The
European Commission
said it cleared plans by Heinz's European unit to buy U.K.-based
United Biscuits
frozen and chilled foods unit. The cost of the purchase, made in October, was $317 million.
Interstate Bakeries
(IBC)
lost 15/16, or 5.3%, to 17 after it reported second-quarter earnings of 40 cents a share, missing the nine-analyst estimate of 49 cents and the year-ago 44 cents a share. The company said the latest second-quarter decline in earnings was due to business disruptions from Hurricane Floyd, ongoing operational start-up problems in the northeast bakery consolidation project and higher selling and delivery costs.
Offerings and stock actions
Celestica
(CLS) - Get Report
jumped 5 1/2, or 7.2%, to a record 81 1/2 after it said it will split its shares 2-for-1.
FreeMarkets
(FMKT)
raised the expected price range for its 4 million-share IPO to $40 to $42 a share from $14 to $16 a share.
Goldman Sachs
is serving as the deal's lead underwriter.
Honeywell
(HON) - Get Report
fell 1/16 to 61 5/8 after it said roughly 96% of
TriStar Aerospace
(TSX)
common stock was tendered during its $9.50-a-share tender offer, which expired Monday.
Leucadia National
(LUK)
fell 1/16 to 21 1/2 after it upped its share repurchasing program to 6 million shares.
Osh Kosh B'Gosh
(GOSHA)
lost 1/2 to 19 3/4 after it said its board authorized the repurchase of up to 1.5 million shares of Class-A common stock in the open market.
VA LINUX
(LNUX)
raised the expected price range for its 4.4 million-share IPO to $21 to $23 a share from $11 to $13 a share.
Credit Suisse First Boston
is serving as the deal's lead underwriter.
Analyst actions
Goldman Sachs
started
BroadVision
(BVSN) - Get Report
as a market outperformer. Shares of BroadVision slid 1 1/4 to 105 1/4.
Deutsche Banc Alex. Brown
started coverage of
Casella Waste
(CWST) - Get Report
as a strong buy. Alex. Brown also resumed coverage of
Republic Services
(RSG) - Get Report
as a strong buy and
Waste Management
(WMI)
as a market performer. Casella Waste added 7/16 to 19 1/16, while Republic Services shares lost 3/16 to 12 3/8. Shares of Waste Management skidded 11/16 to 14 3/4.
Donaldson Lufkin & Jenrette
cut
Coca-Cola
(KO) - Get Report
to market perform from buy. Shares of Coca-Cola fell 4, or 7.4%, to 59 13/16.
Merrill Lynch
started shares of
Corning
(GLW) - Get Report
with an intermediate-term accumulate, long-term buy rating. Merrill said it sees shares of Corning doubling within the next three years. Shares of Corning were unchanged at 105.
Goldman Sachs upped its rating on
CNF Transportation
(CNF) - Get Report
to market outperformer from market performer. CNF Transportation hopped 1/2 to 30 3/4.
PaineWebber
raised its price target on
Cygnus
(CYGN)
to 20 from 10 and upped its rating to buy from neutral. Shares of Cygnus bounced 8, or 95.9%, to 18.
CIBC Oppenheimer
analyst Jim Berlino upgraded
Dell
(DELL) - Get Report
to buy from hold and set a price target of 55. Dell rose 5/8 to 45 3/8.
J.P. Morgan
started coverage with buy ratings on
Exodus
(EXDS)
,
Akamai
(AKAM) - Get Report
and
Covad
(COVD)
. Shares of Exodus soared 20 11/16, or 16.7%, to 144 1/2, while Akamai shares climbed 9 3/8 to 226. Shares of Covad advanced 5 15/16, or 11%, to 60 1/8.
Soundview Technology
rolled out coverage of
Finistar
(FNSR) - Get Report
with a buy rating. J.P. Morgan also stamped the stock a buy. Shares of Finistar plummeted 7 5/8, or 7%, to 101 3/16.
Deutsche Banc Alex. Brown started coverage of
Flextronics
(FLEX) - Get Report
with a buy rating and set a price target of 45. Flextronics shares slipped 1/16 to 89 7/8.
Lehman Brothers
cut its rating on
Guidant
(GDT)
to neutral from outperform. Guidant shares added 1 3/8 to 49 1/8.
Soundview Technology raised its price target on
IBM
(IBM) - Get Report
to 140 from 110 and maintained its buy rating. Shares of IBM edged up 1/4 to 116 1/4.
Robertson Stevens
initiated coverage of
Lucent
(LU)
with a buy rating. Lucent shares advanced 0.5% to 80 1/4.
Robertson Stephens initiated coverage of
Net2Phone
(NTOP)
with a buy rating. Shares of Net2Phone mounted 1 15/16 to 55 1/8.
Bear Stearns
initiated coverage
of Starwood Financial
(SFI)
with a buy rating. Shares of Starwood Financial skidded 7/16 to 17 1/4.
Banc of America
raised its rating on
Symantec
(SYMC) - Get Report
to strong buy from buy and upped its price target to 72 from 60. Symantec shares popped 2 3/8 to 54 3/8.
Goldman Sachs cut
Texaco
(TX) - Get Report
to market performer from market outperformer. Shares of Texaco dwindled 3, or 5.1%, to 56 7/16.
Lehman Brothers
started coverage on
Veritas Software
(VRTS) - Get Report
as a buy and set a 12-month price target of 140. Shares of Veritas Software retreated 5/8 to 103 1/2.
Schroder
said its boosted its price target on
Yahoo!
(YHOO)
to 350 from 225. Yahoo soared 67 1/4, or 23.9%, to 348.
Miscellany
Bassett Furniture
(BSET) - Get Report
fell 5/16 to 16 after it said it would close its upholstery plant in Arkansas and will post a charge of $1.9 million.
El Al Airlines
signed a $400 million deal with
Boeing
(BA) - Get Report
for three 777 planes. Shares of Boeing slipped 5/8 to 37 15/16.
Cendant
(CD)
said it agreed to pay $2.83 billion to settle a shareholder class action lawsuit over accounting irregularities. Cendant said the settlement would result in a non-cash, after-tax charge of $1.8 billion in the fourth quarter and would reduce 2000 earnings by 12 cents to 16 cents per share.
TheStreet.com
took an in-depth look at the Cendant debacle in an
April series.
TheStreet.com/NYTimes.com
joint newsroom also covered the
story this morning. Shares of Cendant gained 1, or 5.8%, to 18 3/16.
Hasbro
(HAS) - Get Report
skidded 3/16 to 21 1/4 after it said it would cut 2,200 jobs, or 19% of its workforce, and consolidate manufacturing, product lines and sourcing activities in a sweeping restructuring. Hasbro said it will close manufacturing plants in Tijuana, Mexico, and Ashford, England. The company said it expects to post a fourth-quarter charge of $141 million from the consolidation, and also set a new $500 million-share buyback plan. See additional reporting from
TheStreet.com/NYTimes.com
joint newsroom for more on the
tinkering at Hasbro.
IMC Global
(IGL)
tacked on 3/8 to 16 5/16 after it said it would record special charges of $825 million in the fourth quarter as part of a restructuring that will include cutting 850 jobs. The program will provide estimated annual pretax savings of about $70 million affecting 2000, according to the company.
Shares of
VISX
(VISX)
fell 36 1/16, or 41%, to 52 after it said that the
International Trade Commission
made an initial finding in favor of a rival in a patent infringement case. For more on the VISX
vexation, check out a separate story from the
TheStreet.com/NYTimes.com
joint newsroom.
Vlasic
(VL)
slid 1/8 to 7 3/8 after it said it is exploring strategic options for its fresh mushroom business.
A front-page story in
The Wall Street Journal
examines an unusual breed of day traders, who continuously trade a single stock, irrespective of the company's revenue, profits, news developments or strategies. For instance, the story cites one trader, who, in a single day, traded more than 130,000 shares of
CMGI
(CMGI)
.
The trader accounted, by himself, for nearly 2% of the company's total daily volume. The aim for such traders is to determine when big, institutional players are buying or selling stock in volume, and jump in ahead of them.
The "Heard on the Street" column in the
Journal
takes a look at the spat between
FTD.com
(EFTD)
parent IOS Brands and
Bankers Trust
, a unit of Deutsche Bank. In a suit which will be heard in New York federal court, FTD has accused Bankers Trust of improperly forcing its way into FTD's newly public Internet subsidiary, FTD.com, by demanding and receiving warrants in the parent during negotiations over a previous FTD financing. Shares of FTD.com declined 1/8 to 6.
The
Food and Drug Administration
gave its stamp of approval to
Pfizer's
(PFE) - Get Report
antidepressant Zoloft as a remedy for post-traumatic stress disorder. Shares of Pfizer stumbled 1 to 33 7/8.
