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Let's Do It Again: Market Enjoys Another Session on the Upside

The Nasdaq set yet another record and bonds rallied on as Wall Street started thinking there may not be another rate hike this year.

It was a day of "anothers" for the stock and bond markets: Another all-time closing high for the

Nasdaq Composite Index

, another session of heavy volume and another winning day for the 30-year Treasury bond.

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Meanwhile, drug stocks were energized this afternoon by


(PFE) - Get Free Report

surprise $82 billion takeover bid for



, which has agreed to a

merger of equals with

American Home Products


. When news of the Pfizer bid hit, the

American Stock Exchange Pharmaceutical Index

immediately perked up and sprinted higher. Before the Pfizer news hit, the index was actually down a touch on the day. In the end, the drug index soared 1.8%.

The Nasdaq Comp gained 27.44, or 0.9%, to 3055.95, closing at another record high, after closing above

3000 for the first time ever

yesterday. The Comp advanced today for the sixth-straight session, but ended off its best levels of the day. The Nasdaq Comp peaked intraday at 3077.41, about 20 minutes after the opening bell. Pushing up the Comp were Internet, semiconductor, telecom, computer makers and financials.

While the market's other major averages posted gains, the advances were slight to modest.

As for blue-chips, the

Dow Jones Industrial Average

gained 30.58, or 0.3%, to 10,639.64. Reflecting the overall strength in financials,

J.P. Morgan

(JPM) - Get Free Report

provided the biggest boost to the Dow.

Dow component


(C) - Get Free Report

was most active on the Big Board today, helped by two huge block trades -- one of about 18.3 million shares and the other of 13.4 million. Citigroup gained 5/8 to 53 5/8 on volume of 53.6 million shares.

Elsewhere among the major indices, the

S&P 500

rose 7.71, or 0.6%, to 1362.64, while the small-cap

Russell 2000

advanced 1.44, or 0.3%, to 439.90. Internet Sector

index hopped 27.49, or 3.6%, to 796.81.



, up 8%, was the DOT's biggest boost.

Red Hots index rose 2.95, or 1.1%, to 268.8. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.

Treasuries rallied. The 30-year Treasury bond advanced 19/32 to 100 13/32, yielding 6.09%.

Stocks rose thanks in part to a building feeling that perhaps the


may be out of the interest-rate-raising business this year.

Major stock proxies rose to their highs early in the session, but they couldn't get back to those levels again. A modest bout of selling took hold around 3 p.m. EST before stocks bounced back to close modestly higher. The gains in stocks and bonds came in the face of tomorrow's much-anticipated October

employment report

, which will be released at 8:30 a.m. EST.

"I think the market's got a half-decent tone to it," said Jay Suskind, head of institutional equity trading at

Ryan Beck

. "People are waiting for tomorrow's numbers and then focus on the Fed."

One source for the optimistic sense on rates came in part via an article in

The Washington Post

by John Berry, who wrote in the lead of his story that Fed "officials appear unlikely to raise interest rates between now and the end of the year, amid several signs that the pace of growth in the nation's supercharged economy has crested."'s

economics correspondent,

James Padinha

, examined Berry's record in a recent



Federal Open Market Committee

is slated to meet on Nov. 16. Suskind pointed out that he thought the sense has changed regarding what the FOMC may or may not do at its November meeting. Two weeks ago, he said there was a feeling the Fed was going to raise rates for sure, but now, he said, the odds are maybe 50-50 that the Fed will tighten.

According to a poll conducted by


last Friday, 18 of 30 primary dealers of Treasury securities think the FOMC would raise the target on the fed funds rate by 25 basis points.

Dave Eberhart, analyst at

Optima Investment Research

in Chicago, pointed out the bond market's recent rally has helped set the stock market off too. Today the bond contract hit a five-week high.

As for the outlook for bonds, the analyst pointed out a lot hinges on what tomorrow's jobs report looks like. He said if it's a benign report, the bond market could see some pull back. He said friendly jobs data -- and it would have to be "real" friendly because the bond market has already priced in a good report -- the bond contract could hop and trade around 115 1/2.

previewed the jobs report in a story

this morning.

According to a


poll, economists are projecting

nonfarm payrolls

to rise 313,000 in October with the unemployment rate to remain at 4.2%.

Financials were a big power in the market. The

Philadelphia Stock Exchange/KBW Bank Index

rose 1.5%; the

American Stock Exchange Broker/Dealer Index

added 4.9%; and the

S&P Insurance Index

expanded 1.2%.

Tech and telecom gauges soared. The

Philadelphia Stock Exchange Semiconductor Index

rose 1%; the

Philadelphia Stock Exchange Computer Box Maker Index

jumped 1.5%; while the

Nasdaq Telecommunications Index

expanded 1.9%.


New York Stock Exchange

trading, 982 million shares were exchanged while advancing stocks beat decliners 1,582 to 1,459. On the

Nasdaq Stock Market

, 1.35 billion shares traded while winners beat losers 2,020 to 1,948. New 52-week highs beat new lows 90 to 87 on the Big Board, while new highs beat new lows 210 to 86 in over-the-counter trading.

Among other indices, the

Dow Jones Transportation Average

slipped 7.30, or 0.3%, to 2969.20; the

Dow Jones Utility Average

slumped 2.63, or 0.9%, to 304.01; while the

American Stock Exchange Composite Index

rose 3.39, or 0.4%, to 807.47.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

rose 37.76 to 7261.5 and the

Mexican Stock Exchange IPC Index

gained 23.19 to 5817.04

Thursday's Company Report

By Eileen Kinsella
Staff Reporter


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.


In a surprise move, Pfizer today made an $82.4 billion offer to acquire Warner-Lambert. The offer values Warner-Lambert at $96.40 a share.

Warner-Lambert and American Home Products have

agreed to a $72 billion merger of equals, and it was not immediately clear whether Pfizer's bid would scuttle that pact.

Pfizer closed down 1 9/16 to 37, Warner-Lambert was up 6 5/16, or 7.5%, to 90 1/8 and American Home ended down 1 to 55. All three stocks were halted at 12:49 p.m. EST, but was restarted after 3:00 p.m. EST.

This morning, it looked as if there was nothing in the way of the Warner-Lambert/American Home deal.

The merger would create the world's biggest pharmaceutical company. The company would be known as


and would rake in $26 billion in annual sales. The companies said AmericanWarner's 20-member board would consist of 10 appointees from AHP, with the remainder selected by Warner-Lambert. AHP chairman and CEO John Stafford has been tapped as AmericanWarner chairman, while Warner-Lambert chairman, president and CEO Lodewijk de Vink is slated as the company CEO.

Mergers, acquisitions and joint ventures

Shares of

Republic New York


jumped 3 11/16, or 5.7%, to 68 3/8 after

The Wall Street Journal

reported that

HSBC Holdings

is close to forging a delayed deal to buy the bank, citing people familiar with the matter.

Optical Coating Laboratory


soared 48 15/16, or 41.1%, to 168 1/4 after

JDS Uniphase


said it was buying it for $2.8 billion in stock. Optical which makes thin film coatings and components, was the top gainer on the Nasdaq market. Meanwhile

Morgan Stanley Dean Witter

started coverage of JDS with an outperform rating and a price target of 225. The stock inched up 1/2 to 191 7/8.



said they have entered a $75 million e-commerce pact with


. slipped 7/8 to 63 3/16.

Viewer's Choice LLC

announced plans to forge a joint business with




Liberty Digital


to offer customers interactive features such as instant replays and statistics. ACTV fell 7/16 to 16 1/2 , while Liberty Digital edged up 3/4 to 33 7/16.



rose 1 7/16 to 182 1/8 and

NorthPoint Communications


climbed 2 1/2, or 9.6%, to 28 5/8 after saying they inked a marketing and distribution agreement

Earnings/revenue reports and previews



gained 2, or 10.8%, to 20 1/2 after it posted third-quarter earnings of 37 cents a share, beating the 10-analyst estimate of 31 cents but down from the year-ago 55 cents.

American Water Works

(AWK) - Get Free Report

fell 1/16 to 27 3/4 after it posted third-quarter operating earnings of 58 cents a share, missing the five-analyst estimate of 60 cents but up from a year-ago 55 cents a share.

(BFLY) - Get Free Report

slipped 1/16 to 10 9/16 after it reported a third-quarter loss of 71 cents a share, compared with a year-ago loss of 25 cents a share. A report on


said the First Call/Thomson Financial lone-analyst estimate of a 41-cent loss was

incorrect and that the company actually beat estimates. said gross quarterly revenues increased by over 17% and said it completed a number of initiatives designed to increase capacity for the holiday shopping season.


(COST) - Get Free Report

added 1/16 to 81 3/8 after it posted a 14% increase in October same-store sales.


(DOL) - Get Free Report

inched up 1/2 to 17 11/16 after it reported a third-quarter loss of 3 cents a share, in line with the four-analyst estimate but down from the year-ago 26-cent profit.

Foundation Health


lost 11/16, or 7.3%, to 8 3/4 after it reported third-quarter earnings of 29 cents a share, in line with the 14-analyst estimate and up from a year-ago 24 cents.


(HUM) - Get Free Report

fell 3/16 to 8 after it reported third-quarter earnings of 13 cents a share, which includes the beneficial effect of the premium deficiency recorded in the first quarter. The report beat the 17-analyst estimate of 11 cents and the year-ago 18-cent loss.



edged up 1/16 to 31 1/4 after it posted third-quarter earnings of 37 cents a share, beating the 10-analyst estimate of 35 cents and the year-ago 33 cents.



slipped 3/4 to 37 9/16 despite boasting an 8% rise in October same-store sales.

Neiman Marcus


gained 2 13/16, or 12.1%, to 26 after saying it expects to post first-quarter earnings between 74 and 76 cents a share, beating the four-analyst estimate of 64 cents a share.

Suiza Foods


lost 1 1/4 to 34 15/16 after it posted third-quarter earnings of 91 cents a share, missing the nine-analyst estimate by a penny and up from the year-ago 76 cents.



tacked on 2 to 52 5/8 after it said October same-store sales rose 11.6%.

joint newsroom covered October same-store sales in a

story this morning.

Offerings and stock actions


is set to price a 4 million-share IPO for

Collectors Universe

(CLCT) - Get Free Report

at $7 to $9 a share.

Cobalt Networks


raised the estimated price range of its IPO to $20-$22 from $14-$16.

Bear Stearns


Morgan Stanley Dean Witter

priced a 13 million-share offering for

Covad Communications


at $43 a share. Shares of Covad rose 7/8 to 45 1/16.

Pacificare Health


rose 8 11/16, or 19.1%, to 54 3/16 said its board approved the repurchase of up to 12 million shares.

In addition, the company announced its plans to buy

Texas Health Resource's

Harris Methodist Health Plan

for an undisclosed amount.



lost 1 5/16 to 171 1/4 after saying it set a 2-for-1 stock split.

Goldman Sachs

is expected to price a 25 million-share IPO for



today between $11 to $13 a share

Analyst actions

Morgan Stanley sliced its rating on



to neutral from outperform. Shares of Albertson's fell 3/8 to 34.


raised its price target on

Applied Materials

(AMAT) - Get Free Report

to 107 from 90. Applied Materials slipped 1 3/4 to 92 3/4.

PaineWebber initiated coverage of



with a neutral rating and a price target of 80. Shares of EMC skidded 2 1/8 to 72 7/8.

Morgan Stanley rolled out coverage of

JDS Uniphase


with an outperform rating and a price target of 225. JDS Uniphase popped 1/2 to 191 7/8.

Deutsche Banc Alex Brown

narrowed its fourth-quarter loss estimate for



to 5 cents from 7 cents. Jupiter jumped 3 7/8, or 10.7%, to 39 7/8.

Credit Suisse First Boston

upped its fiscal 2001 earnings estimates on



to 86 cents a share from 79 cents and maintained a strong buy rating. Micromuse soared 8 1/2, or 8.5%, to 108 1/2.


upped its price target on



to 146 from 125. Shares of Motorola hopped 3 1/4 to 106 1/2.

Merrill Lynch sliced its rating on

Navigant Consulting

(NCI) - Get Free Report

to a neutral from a buy. Navigant Consulting plummeted 9 7/16, or 32.6%, to 19 1/2.

Lehman Brothers

raised its price target on

Photon Dynamics


to 35 from 29. Photon Dynamics popped 3 1/4, or 10.7%, to 34.

Robertson Stephens

cut its rating on



to market performer from buy. Starwood shares sank 2 3/16, or 9.1%, to 21 3/4.

Credit Suisse First Boston

said it upped its earnings estimates on

UnitedHealth Group

(UNH) - Get Free Report

following a better-than-expected earnings report. The company's 1999 EPS was raised to $3.10 a share from $3.05, while 2000 EPS was raised to $3.60 from $3.55. UnitedHealth skidded 15/16 to 52.



(AVP) - Get Free Report

said it has tapped Andrea Jung to replace Charles Perrin, who retired as CEO. Avon bounced 2 1/8, or 7.1%, to 31 3/4.

Del Webb


mounted 1/16 to 22 11/16 after it said it tapped Leroy Hanneman as its CEO.

Simon Property Group

(SPG) - Get Free Report

stumbled 1/16 to 22 1/2 after it unveiled its plans to put its retail properties online by offering its tenants Internet access. Simon said it would co-mingle the technology into its brick and mortar marketing strategies. The company also plans to roll out an upgraded Web site, which would include Simon mall Web sites.



advanced 3/4, or 10.9%, to 7 5/8 after it said it has tapped David Chamberlain as chairman and CEO.

Summit Bancorp

(SUB) - Get Free Report

hopped 1/4 to 34 1/2 after it said it would cut 200 to 250 jobs through a realignment and expects to realized $20 million in annual savings as a result. The company said it expects to take a fourth-quarter pretax restructuring charge of $25 million to $30 million.