In what has been a bizarre week --
return to the ice, the same-day trading debuts of the
World Wrestling Federation
Martha Stewart Living Omnimedia
-- it only seems appropriate for the joy of
yesterday's market rally to be followed by today's intraday swoon on the bad news out of
And it only stands to reason that the intraday cascade of stock prices would be followed by a nice rally off the lows, which eventually lifted the
Nasdaq Composite Index
to close in positive territory.
The market: Join the discussion on
IBM got hammered after warning that it's going to continue experiencing Y2K slowdown effects in the fourth and first quarters. IBM, a
Dow Jones Industrial Average
component, at session's end accounted for roughly 110 points of negative influence in the blue-chip average. The Dow closed down 94.67, or 0.9%, to 10,297.69 after trading as low as 10,177.38.
news also helped weigh on the
Philadelphia Stock Exchange Computer Box Maker Index
, which dropped 2.7%.
For a look at mutual funds with the most exposure to IBM stock, click
"It's all about IBM," said Dan Marciano, head of trading at
. "Hopefully it's not contagious." Around 3:20 p.m. EDT, the trader pointed out that IBM was accounting for about 114 points of the Dow's decline, by far the largest chunk of the fall.
As for sentiment in the market, the trader said: "I think the feeling is we're building a base around 10,000."
gave up 5.82, or 0.5%, to 1283.61. Intraday, the S&P 500 traded as low as 1265.63.
The Nasdaq Comp rose 13.82, or 0.5%, to 2801.95. The Comp had traded as low as 2724.74.
The small-cap Russell 2000 advanced 0.33 to 414.27.
TheStreet.com Internet Sector
index jumped 9.44, or 1.4%, to 718.96, helping the Nasdaq Comp's cause.
Red Hots index rose 11.37, or 5.4%, to 221.41. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.
Volume was heavy overall, while breadth was negative.
Meanwhile, the 30-year Treasury bond gave up early gains after trading higher through a big chunk of the session, eventually gave those gains up and fell. The long bond was off 12/32 to 96 26/32, yielding 6.37%.
Gov. Edward Kelley, a voting member of the
Federal Open Market Committee
, was on the wires today, saying the Fed "cannot and does not, and does not intend to, target asset prices," according to a
There weren't many sectors in the market making a charge to the upside, although a few managed to close higher. The
Philadelphia Stock Exchange Oil Service Index
was one of them, hopping 2.1%.
Meanwhile, tobacco stocks picked up where they left off yesterday: in the sewer. The
American Stock Exchange Tobacco Index
continued its fall in the wake of yesterday's Florida appellate court ruling. The tobacco index dropped 4.8%. Dow component
Technicians Call Washout Necessary
Some technicians have been saying lately that the market's current corrective phase won't end until the tech sector washes out.
John Hughes, technical analyst at
, echoed that opinion. He pointed out that the majority of stocks on the Big Board are in downtrends and below their long-term moving averages. What's left is tech and when they do correct, they will have the most dramatic effect on the indices and sentiment, the technician said. A sharp fall in tech -- he mentioned a 30% to 40% decline -- would suggest that every sector has declined, and that would be where you'd get a clean-out.
Hughes said he thinks the decline in the market overall in the past month, in view of the indices, is still intact. The fact that the Dow, for example, bounced over the last few sessions after getting crushed last week because the downdraft was due to pause, he said.
The recent rally didn't consist of much fresh buying, but was more a drying-up of selling, Hughes said. And today, the selling resumed on IBM.
New York Stock Exchange
trading, 1.01 billion shares were exchanged while declining stocks beat advancers 1,876 to 1,146. On the
Nasdaq Stock Market
, 1.13 billion shares traded while losers vanquished winners 2,209 to 1,719. New 52-week lows beat new highs 320 to 24 on the Big Board and by 201 to 90 in over-the-counter trading.
Among other indices, the
Dow Jones Transportation Average
rose 3.65, or 0.1%, to 2812.09; the
Dow Jones Utility Average
fell 1.09, or 0.4%, to 293.57; and the
American Stock Exchange Composite Index
gave up 0.34, or 0.04%, to 786.09.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
rose 21.65 to 6952.4 and the
Mexican Stock Exchange IPC Index
lost 17.12 to 5105.27.
Thursday's Company Report
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.
IBM shed 15 5/8, or 14.6%, to 91 3/8 after late yesterday posting third-quarter earnings of 90 cents a share, in line with analysts' estimates and up from the year-ago 78 cents.
Worrisome to the market today, though, were the company's warnings about the end of this year and next year. IBM cautioned that soft spending by big clients before Y2K could dent profits for the fourth quarter of this year and the first quarter of fiscal 2000. IBM said its fourth-quarter earnings could dip 15 cents to 20 cents below the year-ago $1.24, leaving profits below the $1.33 a share consensus estimate. The company sees the first quarter of 2000 to be flat or slightly below the year-ago 78-cent profit, also missing analysts' consensus estimate of 90 cents a share.
analyst Steve Milunovich downgraded the shares to an intermediate neutral, long-term buy from intermediate buy, long-term buy.
cut the stock to outperform from buy and slashed its price target to 105 from 155.
cut its 1999 and 2000 earnings estimates on Big Blue.
Mergers, acquisitions and joint ventures
climbed 1 1/4, or 14.1%, to 10 1/8, after forging a strategic alliance with
. eFax.com said that union would enable Phone.com customers to register for an eFax number and access fax services from their wireless phones. Phone.com flew 18 5/8, or 8.1%, to close at 248 9/16.
lost 1/4 to 37 1/16 after it announced its plans to acquire
in a stock transaction. Ascent rose 3 3/8, or 26.7%, to 16 1/16. Liberty said that Ascent shareholders would receive $513.6 million in Liberty shares, with Ascent valued at $17.26 a share.
fell 7/8 to 69 after its shareholders gave their stamp of approval to its proposed merger with
which lost 1/2 to 43 3/8.
added 1/2 to 18 11/6 after saying it acquired the commercial optics operation of
, a unit of
, for an undisclosed amount. Shares of Corning inched up 1/16 to 67.
lost 1/4 to 55 3/4 after it announced plans to buy
, in a cash and debt deal valued at $129 million. United Technologies said it would incorporate Cade into its
Pratt & Whitney Engine Services
division. The deal calls for United to pay $5.05 a share for Cade's outstanding shares.
Earnings/revenue reports and previews
climbed 3/8 to 55 after it posted third-quarter operating earnings of 50 cents a share, in line with the 17-analyst estimate and up from a year-ago 43 cents.
rose 4 1/4 to 122 1/4 after it yesterday posted first-quarter earnings of 15 cents a share on a fully taxed basis, beating the 32-analyst estimate of 13 cents and the year-ago 4 cents.
lost 5/16 to 27 11/16 after it posted third-quarter earnings of 68 cents a share excluding charges, beating the six-analyst estimate of 66 cents and the year-ago 61 cents a share. The company also approved the repurchase of up to 2 million additional shares.
bubbled up 1 9/16 to 54 5/16 after it reported third-quarter earnings of 32 cents a share, in line with the 16-analyst estimate, but down from the year-ago 36 cents a share.
rose 3 3/4, or 6.9%, to 57 3/4 after it reported third-quarter earnings of 38 cents a share, a penny better than the 12-analyst estimate and up from the year-ago 33 cents.
climbed 1/4 to 20 15/16 after it posted third-quarter earnings of 26 cents a share, a penny better than the 13-analyst estimate and up from 18 cents a year ago. The company said per-share figures for the periods prior to the initial public offering on Aug. 13, 1998, were calculated using a 137-million common share total, the result of an Aug. 4, 1998, share split.
El Paso Energy
added 3/16 to 41 1/4 after posting third-quarter earnings of 50 cents a share, beating both the 13-analyst estimate of 48 cents and the year-ago 43 cents.
inched up 1/2 to 33 5/16 after it posted third-quarter earnings of 42 cents a share excluding charges, a penny better than the 11-analyst estimate and better than a year-ago 32 cents a share.
dropped 1 3/4 to 38 after it reported third-quarter earnings of $1.31 a share, beating both the four-analyst estimate of $1.22 and the year-ago 22 cents.
lost 1 11/16 to 76 3/8 after it posted third-quarter earnings of 39 cents a share, a penny better than the nine-analyst estimate and up from the year-ago 32 cents.
gained 1 1/4 to 39 1/2 after posting third-quarter earnings of 9 cents a share, a penny below the 16-analyst estimate but up from the year-ago loss of 18 cents.
was unchanged at 41 1/2 after it posted a first-quarter loss of 22 cents a share, narrower than the 10-analyst estimate of a 32-cent loss but down from the year-ago 27-cent profit.
posted third-quarter operating net of 69 cents a share, beating the 16-analyst estimate but falling below the year-ago 76 cents. The company's third-quarter retail revenue fell 4.1%, to $6.8 billion from $7.09 billion a year ago, but said it was encouraged by retail sales and gross margin improvements in September. Sears also said it would focus on cutting costs and investing in e-commerce. Shares of the retailer ended down 13/16 to 28 3/16.
lost 1 3/8 to 87 after it reported fourth-quarter earnings of 92 cents a share, beating both the 15-analyst estimate of 89 cents and the year-ago 25 cents a share.
reported on Tyco's earnings in a
edged up 9/16 to 41 1/2 after it posted third-quarter earnings of 79 cents a share, in line with the two-analyst estimate but up from the year-ago 69 cents.
United Water Resources
lost 1/4 to 33 5/16 after it posted third-quarter earnings of 46 cents a share excluding charges, missing the single-analyst estimate of 54 cents and the year-ago 51 cents.
Offerings and stock actions
soared 32 3/8, or 202.3%, to 48 7/16 in its trading debut. Merrill Lynch priced the 6 million-share IPO at $16 a share, above the $13-to-$15 range.
jumped 1 15/16, or 5.1%, to 39 1/4 after it said it would buy back $1 billion of its stock.
slipped 1 9/16 to 83 5/16 after it said it plans to offer 20 million Class-A common shares in the U.S. and Canada, leaving the remaining 5 million up for grabs in other countries.
Morgan Stanley Dean Witter
will serve as the deal's underwriters.
leaped 8 1/4, or 8.6%, to 104 after it announced that it would recommend canceling 64.28 million of its own shares and attempt to set a new stock buyback.
Morgan Stanley Dean Witter cut its 1999 earnings estimates on
to $1.92 from $1.97. Amgen shares fell 6 1/16, or 7%, to 80 1/8.
Banc of America Securities
sliced its rating on
to market performer from buy. BMC Software stumbled 7 3/16, or 11.95, to 53.
raised its 1999 estimates on
to $1.43 a share from $1.40 and fiscal 2000 estimates to $1.82. Gateway shares flew 10, or 19.2%, to 62.
Merrill Lynch raised its long-term rating on
to long-term buy from accumulate. Brinker shares inched up 3/16 to 22 15/16.
Credit Suisse First Boston
initiated coverage of
with a strong buy rating. Software.com bounced 14 3/16, or 27.2%, to 66 1/4.
downgraded shares of
to neutral from buy and cut its price target to $95 from $120. Sun slipped 3 7/16 to 92 7/8.
Merrill Lynch upped its rating on
to near-term accumulate from neutral.
Salomon Smith Barney
raised it to buy from outperform. UnumProvident hopped 1 1/16 to 28 1/4.
tumbled 3/16 to 16 after it filed suit against
, which lost 5/16 to 13 7/16, claiming the company breached their merger agreement by entering negotiations for a separate deal with
. Shares of XL climbed 5/16 to 45 5/16.
said Phelps Dodge Chairman Douglas Yearly has replaced Milton Ward as chairman, president and CEO. The Cyprus Amax and Phelps merger pact did not include a position for Ward, who resigned earlier today. Shares of Cyprus declined 1/8 to 19 3/4.
Food and Drug Administration
laser for eye surgery, used in treating nearsightedness and astigmatism in adults. Shares of Summit Technology added 1, or 5.95, to 17 15/16.
gained 1 to 29 7/8 after it said Rick Wills will become CEO after the sale of its color printer business to
. Tektronix said current Chairman and CEO Jerry Meyer and CFO Carl Neun plan to resign after the deal is completed in November. Wills is currently president of Tektronix's measurement business.