If Internet stocks came back (again) in full Internet (irrational) glory, would the major indices hear? If
hits a post-split 400, does that translate to
Who knows, but it's worth thinking about for a range-locked market whose consistently bright spot today has been the said dot-com sector.
Dow Jones Industrial Average
was giving market watchers cramped necks -- up, down, up, down -- the youthful
TheStreet.com Internet Sector
TheStreet.com E-Commerce Index
were planted in positive territory, folded arms, smug smiles and all.
"Folks have been trying to get a read on the euphoria, and have generally figured that the pure Internet speculation, the retail interest, has usually meant a market top," said Bob Basel, director of listed trading at
Salomon Smith Barney
. "But this theory, that the bubbling speculation means a top, has never signaled one before, so why should it now."
Part of today's Internet enthusiasm is due to Henry Blodget, the Internet analyst at
recently worked at
lately was up 2.6% after receiving a near- and long-term buy rating from the influential analyst. Also, Blodget rated both
, up 4.1%, and
, up 3.3%, near-term accumulate and long-term buy.
Another batch of warm excitement comes from a
Wall Street Journal
report that said
largest shareholder, hired
Morgan Stanley Dean Witter
to search for suitors for Lycos in an effort to break up its planned,
unpopular merger with
. Lycos recently was up 13.1%.
Meanwhile, the Dow, struggling to keep itself green all morning, seemed to have found its grip. The blue-chip index, which fell as low as 9675.71, lately was up 55 to 9749. Oil names continued to glow, and
, along with
, were the Dow's strongest components. The
Philadelphia Stock Exchange Oil Service Index
was bounding 9.2% and the
American Stock Exchange Oil & Gas Index
was climbing 4%.
was up 3 to 1283, while the small-cap
was up 1 to 401.
Nasdaq Composite Index
, off its session low of 2378.81, was up 7 to 2400. Debuting today was the
tracking stock, listed under the symbol QQQ on the
American Stock Exchange
and designed to closely track the price and yield performance of the index. The tracking stock recently was down 11/16, or 0.7%, to 101 9/16, while the Nasdaq 100 itself was about unchanged. The
Morgan Stanley High-Tech 35
was off 0.3%, while the
Philadelphia Stock Exchange Semiconductor Index
was up 1.2%.
An indication that more bank consolidation may be in store -- after
Banque Nationale de Paris
made hostile bids for both
in an effort to break up the companies' planned merger -- was helping the sector. The
Philadelphia Stock Exchange/KBW Bank Index
was up 1%.
Market internals were lukewarm. On the
New York Stock Exchange
, advancers were beating decliners 1,537 to 1,227 on 441 million shares. The ups were outpacing the downs 1,871 to 1,681 on 511 million shares in
Nasdaq Stock Market
The 30-year Treasury was down 14/32 to 95 14/32, sending its yield up to 5.56%. (For more on the fixed-income market, see today's early
Basel, who believes the bond market has made a temporary bottom but still weighs heavily on investors' mind, said: "We're seeing mixed action but that's after that big
stock run-up late last week. I think people are surprised at the resiliency of the market this week. We've haven't seen any small correction, so I think that means we're headed for
Dow 10,000. And that's without any special good news. As long as we don't have a large bad news, I think things are
for now, and then 10,000."
Jack Ablin, managing director at
Colonial Asset Management
in Jacksonville, Fla., isn't so sure. Blaming lingering inflation worries, he said he sees the short-term market performance as "pretty neutral to negative."
"There's still a debate," he said. "We're stuck in the balance of uncertainty now. First, investors were scared
short-term interest rates were going higher, then the jobs number seem to say they weren't, and yesterday we had
comments. People are also nervous about first-quarter profits. So we may test 10,000 and be there for a couple days."
The strategist said he expects an announcement, either way, from
after today's closing bell. The chip maker, lately up 2.3%, is rumored to be preparing a first-quarter warning. Intel accounts for 3% of Ablin's 50-stock portfolio.
As for the Internet sector, Ablin said he's "amused that everybody seems to be paying attention to Blodget now that he's at Merrill. Same guy, different hat. Although he did get that Amazon 400 call -- guess that's what got him his job."
Ablin said he's long AOL and "optimistic about the Internet," but that he doesn't believe an Internet rally will signal a broader market move upward. "I think we have to take a step backward," he said. "It's unrelated to the rest of the market. I mean, the media loves to talk about it, but there aren't a heck of a lot of institutions buying and selling in there. It's still a relatively small segment of the market."
Wednesday's Midday Movers
Aaron L. Task
Oil and oil-services stocks are rising again in response to speculation that
will cut production. A Saudi oil minister said cuts could be announced before the organization's March 23 meeting. Among the biggest beneficiaries this morning are
, lately up 3 1/16, or 14.4%, to 24 5/16;
, higher by 1 5/8, or 10%, to 17 13/16; and
, up 2 /16, or 9.2%, to 24 7/16.
As mentioned above, Amazon.com was up 5 5/16, or 4.1%, to 135 1/4 after Merrill Lynch's new Internet analyst, Henry Blodget, initiated coverage with a near-term accumulate and long-term buy ratings. Blodget also initiated coverage on America Online, lately up 2 5/16, or 2.6%, to 92 1/2, with near- and long-term buy ratings. Yahoo!, lately up 5 3/4, or 3.3%, to 172 3/4, was initiated with near-term accumulate and long-term buy recommendations. Blodget participated in
Net Stock Summit.
Elsewhere in Netland, Lycos was lately up 12 5/8, or 13.1%, to 108 15/16 as it continues to bask in
yesterday's announcement that CMGI's CEO David Wetherell has resigned from Lycos' board and will fight the proposed merger with USA Networks. CMGI, lately up 4 1/4, or 2.2%, to 198 7/8 may even consider bidding to acquire Lycos,
The Wall Street Journal
BancBoston Robertson Stephens
reiterated its buy rating on Lycos, reporting the "most likely outcome" being the close of a Lycos-USA deal "under present or renegotiated terms."
was up 3 7/16, or 9.8%, to 38 11/16 after
ING Baring Furman Selz
upped its recommendation on the Internet service provider to buy from hold.
PSS World Medical
was down 2 31/32, or 24.7%, to 9 1/32 after forecasting its fourth-quarter earnings will not meet the eight-analyst estimate of 24 cents a share. The medical supply concern said its fourth-quarter results will likely top 21 cents.
was down 1 3/4, or 11.7%, to 13 3/16 after warning its third-quarter profits will be 35% to 40% below second-quarter results of 32 cents. The three-analyst consensus is currently for earnings of 49 cents.
was down 2 1/8, or 14.8%, to 12 1/14 after reporting fourth-quarter earnings of 18 cents a share, 1 cent higher than the three-analyst view but behind the year-ago 25 cents.
In other news:
was up 3 3/8, or 9.8%, to 38 3/16 after agreeing to buy
for $19.50 a share. Powerhouse closed Tuesday at 14 13/16 and lately was up 3 1/16, or 20.8%, to 17 13/16. The deal values Powerhouse at about $280 million, including $60 million in debt assumption.
Burnham Pacific Properties
was up 7/8, or 8.6%, to 11 1/16 after teaming with the
California Public Employees Retirement System
to buy 28 shopping centers from
. AMB was lately up 5/16, or 1.5%, to 2 7/16.
Century Telephone Enterprises
was up 4 3/16, or 6.6%, to 67 5/8 on last night's announcement it will replace
in the S&P 500 on a yet-to-be-determined date. Rubbermaid is merging with S&P 500 component
was up 1 3/4, or 8.1%, to 23 3/8 after ING Baring Furman Selz initiated coverage at strong buy.
was down 5 13/16, or 14.5%, to 34 1/4 after
Morgan Stanley Dean Witter
cut its recommendation to neutral from outperform.
DuPont was up 3, or 5.6%, to 56 9/16 after announcing it will seek alliances within the pharmaceutical to unleash the "hidden value" of its life sciences division.
Deutsche Bank Securities
upped its rating on DuPont to accumulate from hold.
was down 2 5/8, or 7.7%, to 31 11/16 after
cut its recommendation to market performer from market outperformer. Yesterday, Fluor said it will cut 5,000 jobs as part of a reorganization effort aimed at boosting profits.
was up 5 1/4, or 17.5%, to 35 1/2 after Goldman Sachs and Morgan Stanley Dean Witter separately initiated coverage with market outperformer and outperform ratings, respectively.
was up 3 1/4, or 7.8%, to 45 1/16 after announcing it will repurchase up to $2 billion of its stock over the next two years.
was lately up 2 5/8, or 25%, to 13 3/16 on word it will be acquired by
Sun Data Systems
in a stock swap valued at $210 million. Sun Data was lately off 15/16, or 2.4%, to 39.