It was another one of those mornings when, one might have supposed, the long awaited Pause That Refreshes looked like it might be coming. Overseas bourses were soft and the stock index futures were weak. Treasuries were giving back a bit of last week's rally.
But no sooner did stocks open lower than they -- especially the big techs that dominate the
Nasdaq Composite Index
-- started to come back. True though it may be that the rally is overextended, investors saw the opening drop as more of an opportunity to buy than as anything else.
"You can't hang around," said Jim Benning, trader at
. "This is historically the strongest time of the year. A lot of people are more afraid of missing the boat than they are of missing a bit on price."
And so all the major indices are off their opening lows, with the tech ones well into the green -- and into new record territory.
Heading into the afternoon, the
Dow Jones Industrial Average
was off 24 to 11,200, while the broader
was down 1 1/2 to 1415 1/2.
The major tech proxy, the Nasdaq, was up 22, or 0.6%, to 3642.
, up 17 3/4, or 4.5%, to 409 1/8, was providing a big push on news that
may complete by mid-2000 a network based on Qualcomm's CDMA wireless technology.
TheStreet.com Internet Sector
index was up 19, or 1.7%, to 1149, while the small-cap
was up 1 to 468.
Though followers of traditional valuations may cringe at the levels stocks have reached, the rally does not lack for basis in the real, said Charles Crane, chief market strategist at
Key Asset Management
"The market in general has had some good fundamental reasons for behaving the way it has," he said. "The domestic economy is strong, inflation is well-behaved and the global economy is looking good, as well. Add that all up and you have a great fundamental backdrop for stocks to appreciate."
To this add anticipation of a liquidity boost in January -- along with the fact that fund flows have been surprisingly strong in the usually anemic fourth quarter. "Cash flows into equities tend to be strong in the first quarter, lifted by year-end bonuses and income-tax refunds," said Crane. "This time around, we'll also have the benefit of any cash that may have migrated to the sidelines because of Y2K."
Yet while Crane thinks the recent rally has some steam left in it, he worries about the valuations of the benchmark indices. Though most stocks are, in his estimation, fairly valued, many of the big-caps that dominate the indices have run ahead of themselves. Those stocks will need to tread water for a bit at the beginning of next year, while the rest of the market catches up. Market breadth, which again is not very good today, will need to improve.
"For this market to be enjoyable in the first half of 2000," he said, "We'll need better breadth than we've witnessed in the last couple of months. If we don't see it in the next three months, then I start to get pretty anxious. A substantial decline in the market averages will lower all boats, not just the big ones. The chances of such a decline increases so long as we stay slim and narrow."
Helped by a
coupon pass, bonds lost some of their early weakness. The 30-year was lately off 6/32 to 99 7/32, its yield at 6.18%. (For more on the fixed-income market, see today's early
Breadth was poor on healthy volume.
New York Stock Exchange:
1,200 advancers, 1,758 decliners, 533 million shares. 71 new 52-week highs, 315 new lows.
Nasdaq Stock Market:
1,917 advancers, 1,999 decliners, 883 million shares. 218 new highs, 90 new lows.
Monday's Midday Watchlist
are getting together, but the market doesn't seem to dig the deal. Under the terms, each outstanding share of USWeb/CKS will be exchanged for 0.865 shares of Whittman-Hart, valuing USWeb/CKS at roughly $68.55 a share. Shares of USWeb were losing 6 3/8, or 12.5%, to 44 9/16, while Whittman-Hart was plummeting 23 1/2, or 29.7%, to 55 5/8.
Mergers, acquisitions and joint ventures
American Electric Power
have formed a joint venture to solve power-quality problems and improve transmission. Shares of American Electric Power were sliding 1/4 to 31 1/2, while Siemens, which had not been traded, was at 112 1/8.
was leaping 5 3/4, or 6.2%, to 98 3/4 after it said that it and
have formed a new company to provide business-to-business e-commerce services to the health-care industry. Chemdex also said it agreed to acquire
, a maker of medical software, in an all-stock purchase valued around $115 million. Shares of Tenet were falling 5/8 to 23 9/16.
and South Korea's
plan to unveil an agreement to invest $500 million in the manufacturing and marketing of Compaq's Alpha microprocessors and computer systems. Compaq shares were adding 7/16 to 25 9/16.
Matsushita Electric Industrial
said they entered a DVD disc venture. Shares of Eastman Kodak were losing 1/16 to 61 3/16, while Matsushita was off 5 1/16 to 250.
of Ireland, which is fighting a hostile $1.6 billion takeover bid from
, said it has received approaches from other companies. Shares of Esat Telecom were hopping 2 1/4 to 82 1/2.
was climbing 1/16 to 43 9/16 after it said it ended talks to buy
. Shares of Ford were edging up 3/8 to 49 7/16.
has withdrawn its $10 billion offer to buy
Credit Commercial de France
. Shares of ING were stumbling 11/16 to 57 1/4.
Federal Communications Commission
internal memo calls the planned megamerger of
an "intolerable" blow to competition,
The Washington Post
reported Saturday. The Oct. 21 memo obtained by the newspaper was written by Tom Krattenmaker, the research director of the FCC's Office of Plans and Policy. MCI WorldCom was bouncing 15/16 to 79 1/2, while Sprint was shedding 3/4 to 68 3/16.
was sinking 2 1/2, or 9.7%, to 23 3/16 after it said it will buy
in a $173 million stock deal. Shares of NetMoves were mounting 2 1/16, or 37.5%, to 7 9/16.
was dwindling 3/16 to 4 3/4 after said it will receive $97.5 million under a pact with China Unicom terminating their telecom cooperation projects. The Chinese government requested termination of the projects in August, saying the structure of the arrangements was improper. Metromedia also said it would receive an additional $6 million in cash after completion of certain conditions.
was hopping 1 7/8 to 90 1/8 after it said it will make a strategic alliance announcement at 1 p.m. EST.
was tumbling 5 3/4 to 113 13/16 after it said it will pay $3.7 billion for
, the cable television business controlled by
and others. The move is part of its strategy for expansion in continental Europe. Shares of Swisscom were gaining 1/2 to 38.
said it has purchased
Volpe Brown Whelan
was retreating 1/18 to 5 5/8 after it said it entered a marketing deal with
. Shares of CyberGold were declining 13/16 to 17 3/4.
, a telecommunications company, is acquiring
21st Century Telecom
, a privately held company, for $500 million in stock and debt. Shares of RCN were gaining 1 to 42 3/4.
Earnings/revenue reports and previews
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
on Friday warned investors that fourth-quarter earnings could fall 40% below the 13-analyst consensus estimate of 66 cents a share. In its second consecutive quarter-profit warning, the company blamed Y2K woes for hampering its high-end printing and publishing equipment sales and higher cost from "customer administration reorganization," which includes bad debt, for the disappointing fourth-quarter earnings.
Xerox also pointed the finger at soft profits from its Brazilian unit due to the country's slow economy after its currency devaluation earlier this year, while citing the U.S. dollar's strengthening against European currencies during the fourth quarter as a problem for European revenue and profits. President and CEO Rick Thoman said that earnings should show "meaningful growth in the second half of the year." Shares of Xerox were hopping 1 7/8, or 9.4%, to 21 3/4.
cut its rating on Xerox to long-term buy from buy.
lowered its fourth-quarter earnings estimates to 40 cents a share from 65 cents, and its 2000 EPS estimates to $1.80 from $2.25.
For more on Xerox's woes, take a look at the
story written by
was slipping 1/2 to 27 1/2 after it posted first-quarter earnings of 20 cents a share, missing the two-analyst estimate of 34 cents and down from the year-ago 37 cents.
was climbing 1 9/16 to 54 after it said it expects fourth-quarter revenue to exceed estimates and be in the range of $10 million to $12 million, citing higher-than-expected demand for its campaign management services.
Nu Skin Enterprises
was declining 2 7/16, or 18%, to 11 1/16 said revenue from Japan in the fourth quarter will likely be less than expected, which will result in lower-than-anticipated earnings. The company expects fourth-quarter revenue in the range of $220 million, about $30 million less than previously expected and about even with the third quarter. The five-analyst estimate currently calls for the company to earn 26 cents a share in the fourth quarter.
Offerings and stock actions
tacked on 2 7/16, or 26.5%, to 11 5/8 after it set a 2-for-1 stock split.
, a wireless affiliate of
, raised the price range for its initial public offering to $17 to $19 a share, from $15 to $17 a share.
Morgan Stanley Dean Witter
started coverage of
with an outperform rating.
Credit Suisse First Boston
initiated coverage with a buy rating and set a price target of 55, while
added the stock to its recommended list.
started coverage with an intermediate-term accumulate, long-term buy. Merrill was an underwriter on Agilent's IPO last month. Shares inched up 3/8 to 45 1/8.
upped its rating on
and USX-U.S. Steel
to trading buys from neutral. Bethlehem Steel was unchanged at 7 1/2, while USX climbed 11/16 to 30 3/16.
to its European portfolio of recommended stocks, while it removed
from the roster. Shares of Ericsson slipped 5/16 to 59 5/8, Electrolux climbed 1/4 to 42 3/4 and Nokia fell 11/16 to 167 5/16.
Goldman Sachs upped its rating on
to trading buy from market outperformer. Shares climbed 2 3/4, or 6.2%, to 48.
J.P. Morgan raised its price target to year end on
to 75 from 50. Shares of Grupo Televisa were losing 3/8 to 61 1/8.
Bear Stearns upped its rating on
to buy from attractive, while Credit Suisse First Boston raised its price target to 95 euros from 75. Shares popped 4 15/16, or 6.4%, to 82 9/16.
Morgan Stanley Dean Witter rolled out coverage of
with an outperform rating. Shares of MetaSolv Software were skidding 6 5/8, or 7.6%, to 81 7/16.
Donaldson Lufkin & Jenrette
cut its rating on
to buy from top pick. Public Storage slipped 1/8 to 21 5/8.
U.S. Bancorp Piper Jaffray
cut its rating on
to neutral from buy. Shares edged down 1/16 to 23 9/16.
Goldman Sachs started
as a market outperformer. Shares rose 2 9/16 to 80 13/16.
Lehman Brothers raised its 12-month price target on
to 170 from 95. Shares of STMicro were falling 5/16 to 136 1/2.
Deutsche Banc Alex. Brown
said it sliced its rating on
to market perform from buy. Shares of Transkaryotic Therapies were stumbling 3 11/16, or 8.8%, to 38 3/16.
Warburg Dillon Read
started coverage of
with a hold rating. Virata dropped 3 1/4, or 8.3%, to 35 7/8.
Monday said that November trading activity skyrocketed. Schwab said that daily average revenue trades rose 41% to 202,900 in November from October's 144,300. The last time the company saw numbers like that was in April, when daily average revenue trades jumped to a record 207,700 from 155,200.
On the year, average daily trades are up by 68%, Schwab said. The company also said that it opened 109,400 accounts during the month, bringing total retail accounts -- both online and offline -- to 6.4 million. Online brokerage stocks, though, were largely unmoved by the news with Schwab falling off 1 1/2, or 3.9%, to 39 1/8.
For more on this, please see the
story written this morning by
was climbing 1 9/16 to 53 3/4 after it said it has increased its capital spending budget by 18%, to $457 million.
The Heard on the Street column in the
offers a broad look back at the stock market over the past decade. The story compares actual events with some predictions made in 1989. Heading into the decade, predictions of Dow 5000 were scoffed at, the Japanese market was still viewed as a miracle, and U.S. investors were extremely anxious about the markets. Since then, the
Dow Jones Industrial Average
has more than quadrupled, and the
Nasdaq Composite Index
has multiplied in value almost eight times, the story said. Tech stocks have replaced '80s stars such as
among others. The bottom line: For the decade ahead, the biggest story may be one that no one has called yet, the column says.