Monday ... and a triple.
For the third consecutive week, stocks emerged from the weekend in furious fashion, sending major market proxies to record highs. Today's ascent was the most impressive, however, as it not only overcame but overwhelmed a profit warning from
, which fell 22.2%.
Dow Jones Industrial Average
led its younger counterparts out of an early-morning forest fertilized by worries about Compaq's announcement. After dropping as low as 10,096.69 early on, the Dow broke back into positive territory shortly after 11 a.m. EDT and barely paused thereafter. The index climbed as high as 10,340.62 in the final hour of trading before closing up 165.67, or 1.6%, at another all-time high, 10,339.51.
Dow gainers were led by
Following the Dow's lead, the
overcame an early decline to as low as 1333.07 to establish its fourth consecutive record, up 10.29, or 0.8%, to 1358.64.
"I think today's market activity nearly mirrors what happened with stocks in February where you saw a push to the defensive growth side of the equation while the
and high growth part of the equation faltered," said Brian Belski, chief investment strategist at
George K. Baum
in St. Louis. "You have financials, cyclical stocks, retailers and even some healthcare stocks stepping up to the plate today, picking up the slack so to speak."
Indeed, the S&P 500 was led by a variety of names in those respective groups. The
American Stock Exchange Broker/Dealer Index
rose 4.1%; the
Morgan Stanley Consumer Index
gained 1.5%; the
Morgan Stanley Cyclical Index
rose 1.7%; and the
Philadelphia Stock Exchange Gold & Silver Index
Belski also observed that "old, hard-line cyclical stocks," such as
, were the Dow's biggest percentage gainers.
"You have people talking about the narrowness of breadth -- I don't agree," the strategist said. "The evidence is today, when you have other groups stepping up. Everyone is so lost within tech that when tech falls almost no one is talking about these different stocks rising to the forefront."
Retailers such as
have been "taken for granted" despite a "great period of outperformance," he noted.
Nasdaq Composite Index
did lag its blue-chip counterparts, but managed to climb from its morning nadir of 2526.84, rise as high as 2606.24 and finish up 5.76, or 0.2%, to a record 2598.81.
was the best performer of traditional tech heavyweights, but others suffered in the wake of Compaq's announcement.
lost 6.5% following a downgrade by
BancBoston Robertson Stephens
each lost 4%,
fell 6.1% and
fell 0.6%, the
Morgan Stanley High-Tech 35
lost 2.8% and the
Philadelphia Stock Exchange Semiconductor Index
While traditional tech leaders struggled, online plays again proved invulnerable.
TheStreet.com Internet Sector
index jumped 58.51, or 8%, to an all-time high of 790.44.
TheStreet.com E-Commerce Index
gained 3.77, or 2.9%, to a record 135.59.
sat out the rally, but they proved an exception.
A bevy of DOT and E-Commerce index components hit new highs, including
rose 18.6% on word of its partnership with
to develop standards for online music transmission. IBM, meanwhile, fell 1.5% and was the Dow's biggest drag.
Among secondary Net names, big gains were sported by
, among others.
Overshadowed somewhat by the turnaround performance of the "Big Three" averages, the
was the best performer for the second straight session, rising 6.46, or 1.6%, to 412.32.
"No doubt this has been a big-cap dominated race, but the move in the Russell in the last three or four weeks is promising," Belski said. "Last week was pivotal because it broke out through 400. I think we're starting to see some semblance of a broadening out."
New York Stock Exchange
trading, 814.5 million shares were exchanged while gainers led losers 1,669 to 1,308. In
Nasdaq Stock Market
activity 1.16 billion shares were exchanged -- the fourth straight plus-billion-share session -- while losers led 2,107 to 1,945. New 52-week highs bested new lows 120 to 70 on the Big Board and 156 to 124 in over-the-counter trading.
"Compaq disappointed the Street by a huge margin and initially we came under pressure," said Anthony Conroy, head of stock trading at
. "But when you looked at it, it was company specific. The market is on a tear. You have slow growth, low inflation and steady interest rates -- it's almost the optimal equation for a healthy stock market."
Conroy observed the emergence of once-catatonic cyclical stocks and believes the trend will continue.
Cat looks cheap," he said. "The economy is just so healthy and these are the companies that are going to do better."
However, "valuations are certainly high, no matter how you measure 'em," the trader warned. "The market is technically overbought, but that doesn't mean it can't go higher."
Barring a "major problem" -- such as "another Russia" or ground troops being deployed in Kosovo -- higher is where the markets will go, he said. "Everything looks great."
Among other indices, the
Dow Jones Transportation Average
fell 34.51, or 1%, to 3335.89; the
Dow Jones Utility Average
rose 2.42, or 0.8%, to 298.75; and the
American Stock Exchange Composite Index
gained 7.82, or 1.1%, to 735.32.
The price of the 30-year Treasury bond rose 8/32 to 97 3/32, its yield dipping to 5.45%.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
rose 49.11, or 0.7%, to 6938.88 and the
Mexican Stock Exchange IPC Index
jumped 98.40, or 1.9%, to 5303.28.
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.
Compaq, the world's largest PC maker, tumbled 6 7/8, or 22.2%, to 24 1/16 following Friday's warning that it expects first-quarter earnings of 15 cents a share, less than half the 33-analyst forecast of 31 cents. Today,
Morgan Stanley Dean Witter
downgraded the stock to neutral from outperform; BancBoston Robertson Stephens cut it to buy from strong buy;
dropped it to market performer from its recommended list; and
Credit Suisse First Boston
kept its buy rating on Compaq but lowered its 1999 earnings estimate for the company to $1.25 from $1.70 a share.
In sympathy, Dell lost 1 3/4 to 41 13/16 and
lost 2 7/8 to 69 7/8 after
Salomon Smith Barney
downgraded it to neutral from buy. Hewlett-Packard fell 1 1/4 to 68 3/8 after BancBoston Robertson Stephens analyst Daniel Niles lowered it long-term attractive from buy. Intel gave up 4 1/4, or 6.5%, to 61 1/4 after the firm dropped it to long-term attractive from strong buy.
Mergers, acquisitions and joint ventures
AboveNet Communications shot up 45 7/16, or 43.4%, to an all-time high of 150 1/4 after signing a deal to co-locate
Web servers at AboveNet's Internet Service Exchanges. Terms of the deal were not disclosed. DoubleClick picked up 17 5/8, or 13.7%, to an all-time high of 146 1/2.
rocketed up 16 5/8, or 106.4%, to an all-time high of 32 3/8 after
agreed to invest in Internet company
as part of a joint venture. CBS slipped 1/4 to 44 11/16. Big Entertainment will own 65% of the venture and CBS will own 35%. The new venture will receive $100 million in promotion, branding and content from CBS and its radio and outdoor subsidiary,
, over seven years. Big Entertainment recently announced an agreement to buy hollywood.com from
In a separate deal, CBS will receive 50% of the equity of
, which operates storeRunner.com, in exchange for about $100 million of promotion and branding support on CBS media over a six-year period. And in a third separate deal,
surged 4 7/8, or 20.9%, to 28 1/4 after CBS agreed to buy a Dallas TV station from the company for $485 million.
climbed 5 1/2, or 30.8%, to an all-time high of 23 7/16 after announcing plans to buy
. After the deal, Equitex will change its name to
and will apply for the symbol NBNK.
, the world's second-largest automaker, picked up 15/16 to 61 1/2 after agreeing to buy
of Britain, a vehicle maintenance and light-repair chain, for $1.6 billion in cash.
jumped 3 1/16, or 22.7%, to an all-time high of 16 7/8 on word
agreed to provide digital subscriber lines service to Frontline's customers in the Northeast. Terms of the agreement weren't disclosed. Covad rose 19, or 23.3%, to an all-time high of 100 1/2. Separately,
vaulted 8 5/8, or 16.6%, to an all-time high of 60 1/2 after Covad agreed to offer PSI customers high-speed Internet access and alternative phone services.
Newport News Shipbuilding
shed 3 1/16, or 10%, to 27 11/16 after
The Wall Street Journal
said the Pentagon is expected to block
$1.4 billion acquisition of the company. General Dynamics tacked on 2 7/16 to an all-time high of 69.
U.S. Office Products
increased 1 7/8, or 48.4%, to 5 5/8 after its
Mail Boxes Etc.
signed a five-year agreement for eBay's members to receive electronic-commerce shipping services from Mail Boxes and
. eBay sloughed off 6 3/16 to 176 5/8.
RealNetworks expanded 38 5/8, or 18.6%, to an all-time high of 247 after setting a pact with IBM to develop an application that will enable consumers to receive and process music and related data from the Internet using IBM security features. IBM lost 2 7/8 to 183 7/16.
hopped up 5 3/8 to an all-time high of 114 1/8 after agreeing to acquire
People's Choice TV
(PCTV:OTC BB) for $8 a share in cash.
Earnings/revenue reports and previews
skidded 1 1/4, or 18.9%, to an all-time low of 5 1/2 after restating third-quarter results after "certain sales practices" did not comply with the company's policies.
dwindled 1 9/16, or 15.2%, to 8 7/8 after warning it sees a fourth-quarter loss of $1.75 to $1.95 a share due to weak market conditions for some of its wireless telecommunications products and push-outs of some orders. The six-analyst forecast called for a loss of 75 cents vs. the year-ago loss of 93 cents.
In other earnings news:
Offerings and stock actions
dropped 6 15/16, or 8.8%, to 72 1/8 after filing with regulators for a 4 million-share offering.
offered his thoughts on the offering in a
piece this morning.
Caterpillar more than inched its way up, rising 2 5/8, or 5.4%, to 51 3/8, after
upgraded it to near-term accumulate from neutral.
Curative Health Services
tanked 3 1/4, or 41.3%, to an annual low of 4 11/16 after
BT Alex. Brown
lowered it to buy from strong buy.
surged 9, or 7.1%, to an all-time high of 135 after Morgan Stanley Dean Witter lifted the stock to outperform from neutral and raised its 1999 earnings estimate for the company to $1.37 from $1.34 a share. Elsewhere in the sector, E*Trade rose 5 3/4, or 6.4%, to 96;
National Discount Brokers
rose 15 15/16, or 34.2%, to an all-time high of 62 9/16; and Ameritrade rose 26 7/8, or 23.3%, to an all-time high of 142 1/4. Still elsewhere, Net.B@nk jumped 38 1/2, or 32.1%, to an all-time high of 158 1/2 after its CEO estimated that the company could have as many as 55,000 accounts by the end of the year. And
, which jumped 4, or 7.4%, to an all-time high of 57 7/8, also popped up on enthusiasm about e-commerce.
A handful of companies had
to thank for a pop in their stocks today:
expanded 2 1/8, or 8.3%, to 27 11/16 on word from the weekly that the company plans to save $100 million by consolidating back office functions, acquiring leased shoe departments and taking over outsourced credit-card and real-estate operations;
added 1 15/16 to 76 1/2 on word its growth is expected to be helped by recent acquisitions and the company's CEO; and
excelled 15 3/8, or 10.6%, to an all-time high of 160 7/8 after a global mutual fund manager called the company one of his top picks.
sloughed off 4 13/16, or 6.9%, to 65 1/16 after a federal appeals court ruled in favor of
Advanced Micro Devices
in a suit between the companies. The court said Altera is not licensed to eight Advanced Micro patents covering programmable logic devices now owned by its
unit. AMD gave up 9/16 to 15 1/16.
climbed 1 15/16, or 21.5%, to 11 after saying studies of its MGI 114 show that the drug may be able to inhibit the growth of human cancer cells.