Little Joy as Indices Stumble to a Positive Finish

Today's late weakness is drawing few cheers on Wall Street. Plus, Omega's Cooperman sets the record straight.
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Cautiously dipping their feet in the market's turbulent waters, investors sent market proxies higher today. Amid the backdrop of a failed rally in the bond market, their shallow confidence was demonstrated by lackluster volume and an afternoon sag that left some traders checking to make sure they had all 10 toes.

Still, equity proxies were able to withstand the turnabout in bonds as value stocks again went to market as the best relative performers while growth names, led by chipmakers, went "wee, wee, wee" into the close.

Ahead of tomorrow's much-anticipated

Consumer Price Index

report, the price of the 30-year Treasury bond fell 5/32 to 88 7/32, its yield rising to 6.12%.

The

Dow Jones Industrial Average

rose as high as 10,682.06 before closing up 31.66, or 0.3%, to 10,594.99.

Dow gainers were led by

Procter & Gamble

(PG) - Get Report

while

Goodyear

(GT) - Get Report

paced decliners.

Broader market averages demonstrated a similar pattern to the Dow. The

S&P 500

rose 7.16, or 0.6%, to 1301.16 but off its session best of 1310.75. The

Russell 2000

climbed as high as 435.41 before closing up 2.48, or 0.6%, to 434.01.

The

Nasdaq Composite Index

couldn't sustain an early rise as high as 2434.52, but it overcame a brief drop below break-even late in the day to close up 16.36, or 0.7%, to 2414.67.

Cisco

(CSCO) - Get Report

,

Dell

(DELL) - Get Report

and

Intel

(INTC) - Get Report

were standouts among Nasdaq heavyweights, while semiconductor stocks again outperformed. The

Philadelphia Stock Exchange Semiconductor Index

rose 2.7% while the

Nasdaq 100

gained 1.4%.

In

New York Stock Exchange

trading, SOX component

Motorola

(MOT)

rose 4.7% to an all-time high of 89 15/16 after receiving a $400 million contract to provide digital cellular service and equipment in Brazil.

Meanwhile,

TheStreet.com Internet Sector

index rose 1.95, or 0.4%, to 504.08 after rising as high as 513.25 early on and then falling as low as 495.17. Internet favorites such as

America Online

(AOL)

,

Amazon.com

(AMZN) - Get Report

and

Yahoo!

(YHOO)

managed to rebound from

yesterday's lashing but closed below session highs.

"We came out the gate nicely, there were some real bottom-fishing-type players in there," said Charles Payne, president and chief analyst at

Wall Street Strategies

. "You're starting to see a few people get re-bullish on Internet stocks. Even someone who's a bear could say, given the swiftness they came down, there's a trading opportunity. But as you can see from the volume, big institutions are still holding back."

Payne said he executed some buy-on-close orders for more speculative clients, "hoping the

CPI number is nonthreatening to give us a sigh-of-relief rally and get some big money into the market. I still get the sense the smart money is selling into rallies instead of participating."

If the CPI figure comes in at or below expectations of a 0.2% rise, the market watcher expects a big advance.

"I'm looking for a minimum of 150

Dow points tomorrow," he said, suggesting the index could thereafter rise into the 10,800 to 10,900 range if CPI is market friendly. "I'm rolling the dice for a benign number but if it isn't, there's so much

negativity already built in the risk/reward is attractive enough to give it a shot."

In NYSE trading, just over 700 million shares were traded -- only the second 700 million session in the past nine trading days -- while advancers bested declining stocks 1,635 to 1,356. In

Nasdaq Stock Market

activity, 840.6 million shares were exchanged while losers led 2,128 to 1,789. New 52-week lows bested new highs 147 to 79 in Big Board activity and by 90 to 57 in over-the-counter trading.

No Rest for Weary Net Stocks

Gains by Net stocks came amid continued skepticism that the group has found a bottom from market watchers such as Byron Wien, U.S. investment strategist at

Morgan Stanley Dean Witter

.

Additionally,

Prudential Securities

chief technical analyst Ralph Acampora included Internet stocks among "several groups where a valuation bubble needs to be broken" in a report published today.

Acampora, who listed drugs and financials in the same category, also expressed a somewhat pessimistic view of the market's near-term potential, even as many other market prognosticators see the potential for a sharp rally if tomorrow's CPI data is benign.

"We are now 23 days into the current correction and we do not believe that the market is sufficiently oversold," he said. "We believe there is too much complacency in the market. In order for the current correction to be washed out, we believe we need to see further downside volume and a higher level of fear among buyers in the market."

The alternately deified and vilified technician views near-term support at 10,350 for the Dow, 1278 for the S&P and 2340 for the Nasdaq Comp.

Cooperman Gets Pre-Emptive

Earlier today,

TheStreet.com

received an unsolicited phone call from Leon Cooperman, senior partner at

Omega Advisors

. Cooperman, who'd apparently heard

TSC

was making inquiries about rumors the hedge fund had fired several people in its global macro strategy department, denied there is any truth to the scuttlebutt.

"Nobody has left the macro group," he said. "We're having a very good year relative to most hedge funds and have hired seven people this year. Nobody has left."

The rumors emerged

Friday, a session in which much of the market's attention focused on alleged problems with hedge funds. Since former

Goldman Sachs

(GS) - Get Report

partner Steven Einhorn joined Omega as vice chairman and general partner about a month ago, there'd been some speculation -- erroneous, it turns out -- of a bit of house cleaning as he settled in at the firm.

The discussion Friday about a mass exodus at Omega may have been the result of a planted story by those on the Street with an "agenda," Cooperman mused, possibly someone with a short position looking to further spook an already

Scooby-Dooed

market.

Among other indices, the

Dow Jones Transportation Average

rose 0.83 to 3351.52 after trading as high as 3375.59; the

Dow Jones Utility Average

gained 0.99, or 0.3%, to 332.10; and the

American Stock Exchange Composite Index

gained 1.23, or 0.2%, to 763.92.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

dipped 29.80, or 0.4%, to 6865.82 and the

Mexican Stock Exchange IPC Index

soared 182.08, or 3.6%, to 5299.93.

Tuesday's Company Report

By Heather Moore
Staff Reporter

(

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.

)

Several semiconductor names rowed merrily along following a burst of kind words from

Merrill Lynch

. Citing improving demand, analyst Joe Osha increased his estimate for 1999 global chip revenue growth to 15.5% from 12%.

Analog Devices

(ADI) - Get Report

picked up 7/8 to 44 7/8 after its 12-month price target was raised to 52 from 44;

Broadcom

(BRCM)

climbed 9 9/16, or 9.5%, to 110 5/8 after its target was raised to 150 from 101;

Conexant Systems

(CNXT) - Get Report

added 1 1/16 to 55 5/8 after its target was raised to 66 from 54.63;

Galileo Technology

(GALT) - Get Report

inched up 1/16 to 35 1/2 after its target was raised to 42 from 35.56;

PMC-Sierra

(PMCS)

sparked up 5/8 to 56 1/2 after its target was raised to 70 from 56;

Texas Instruments

(TXN) - Get Report

hopped up 5 7/16 to an all-time high of 134 11/16 after its target was raised to 155 from 129.25; and

Vitesse Semiconductor

(VTSS)

edged up 1 9/16 to an all-time high of 63 1/8 after its target was raised to 74 from 61.56.

Mergers, acquisitions and joint ventures

CD Radio

(CDRD)

expanded 1 to 26 1/8 after agreeing to work with

Ford

(F) - Get Report

to give motorists access to CD Radio's digital satellite radio. Ford gave up 9/16 to 52 15/16.

CMP Group

(CTP)

shot up 5 11/16, or 28.4%, to an all-time high of 25 3/4 after

Energy East

(NEG)

agreed to acquire the company for $29.50 a share in cash, or $957 million. Energy East also will assume about $271 million of CMP preferred stock and long-term debt. Energy East added 1/16 to 26 5/16.

Orcad

(OCAD)

rocketed 3 5/16, or 35.6%, to an annual high of 12 5/8 after

Cadence Design Systems

(CDN)

agreed to acquire the company for $121 million, or $13 a share. Cadence advanced 1/4 to 12 15/16.

Park Place Entertainment

(PPE)

lowered 3/16 to 9 1/2 after

Ocean Fund International

-- a British Virgin Island mutual fund which owns the Sex.com site -- offered to buy eight Caesars hotels and resorts from the company for $3.6 billion in cash. Park Place recently bought the Caesars properties from

Hilton Hotels

(HLT) - Get Report

and

Starwood Hotels & Resorts

(HOT)

. Gambling and naked women -- not a shocking combination here, folks.

Yankee Energy

(YES)

jumped 7 7/16, or 22.9%, to an all-time high of 39 15/16 after

Northeast Utilities

(NU)

agreed to buy the company in a deal valued at $679 million. Yankee shareholders will receive $45 a share, 45% payable in Northeast shares and 55% in cash. Northeast Utilities slid 1/16 to 17 1/4.

Earnings/revenue reports and previews

Best Buy

(BBY) - Get Report

grew 1 3/16 to 53 15/16 after posting first-quarter earnings of 22 cents a share, beating the 16-analyst estimate of 20 cents and moving up from the year-ago 8 cents.

Casey's General

(CASY) - Get Report

excelled 1/2 to 13 1/2 after posting fourth-quarter earnings of 12 cents a share, a penny above the five-analyst forecast and higher than the year-ago 9 cents.

CKE Restaurants

(CKR)

swelled 3/8 to 12 7/8 after reporting first-quarter earnings of 36 cents a share, 1 cent higher than the 11-analyst outlook but below the year-ago 43 cents.

FactSet Research

(FDS) - Get Report

slouched 3/8 to 47 3/4 after announcing third-quarter earnings of 28 cents a share, on target with the four-analyst view and above the year-ago 20 cents.

Heinz

(HNZ)

sloughed off 7/8 to 48 11/16 after recording fourth-quarter earnings of 60 cents a share, beating the 17-analyst estimate by a penny and moving up from the year-ago 53 cents.

Integrated Systems

(INTS)

tanked 2 1/4, or 17.1%, to 11 after late yesterday recording first-quarter earnings of 1 cent a share, below the year-ago 7 cents.

Rexall Sundown

(RXSD)

tumbled 1 1/2, or 11.2%, to 11 15/16 after last night reporting third-quarter earnings of 28 cents a share, missing the six-analyst view by 3 cents but topping the year-ago figure by 2 cents.

Salomon Smith Barney

downgraded the stock to outperform from buy.

Rite Aid

(RAD) - Get Report

sprouted up 3/8 to 24 3/16 after last night reporting first-quarter earnings of 31 cents a share, including relocation charges. The 14-analyst estimate called for operating earnings of 32 cents vs. the year-earlier 30 cents.

Solectron

(SLR)

advanced 2 1/4 to an all-time high of 60 3/8 after posting third-quarter earnings of 29 cents a share, in line with the 21-analyst forecast and above the year-ago 20 cents.

Zila

(ZILA)

shaved off 1/8 to 3 1/8 after posting a third-quarter loss of 6 cents a share, missing the three-analyst forecast for earnings of 3 cents but besting the year-ago loss of 8 cents.

Offerings and stock actions

S3

(SIII)

flew 9/16, or 7.3%, to 8 1/4 after saying it will receive about 252 million shares of

United Microelectronics

stock by the end of 1999 as part of United Microelectronics' foundry consolidation plans. (

TheStreet.com's

Herb Greenberg

wrote about

S3

yesterday.)

Wesley Jessen Visioncare

(WJCO)

lowered 1 1/16 to 26 3/4 after its 4 million-share secondary offering priced at $25 each through underwriters led by

Deutsche Banc Alex Brown

.

Analyst actions

Arm Financial

(ARM)

sank 1 1/8, or 13%, to an all-time low of 7 1/2 after

PaineWebber

lowered it to neutral from buy.

First Tennessee National

(FTEN)

rallied 1 1/16 to 38 23/32 after

J.P. Morgan

started coverage with a buy.

Nabisco Group Holdings

(NGH)

rose 3/16 to 21 9/16 after

Goldman Sachs

started coverage of the stock by placing it on the firm's recommended list. Until yesterday, Nabisco was half of

RJR Nabisco Holdings

. The other half,

R.J. Reynolds Tobacco Holdings

(RJR)

, also began trading today, rising 3/16 to 32 7/16. Goldman initiated coverage of RJR with a market outperform while Merrill Lynch rated the stock an accumulate with a price target of 39.

Telmex

(TMX)

vaulted 2 11/16 to 72 1/2 after Merrill Lynch raised it to long-term buy from accumulate while maintaining its near-term accumulate.

Time Warner

(TWX)

shot up 4 1/16, or 6.5%, to 66 11/16 after Merrill Lynch restated its buy rating, saying it expects the company to make a "series of positive fundamental and strategic announcements over the near term."

Miscellany

Dow component

Coca-Cola

(KO) - Get Report

fizzed down 1 1/16 to 63 3/4. Possibly having downward influence on the stock was word the company was withdrawing all drinks produced in Belgium from Belgian, Dutch, and Luxembourg markets following a health scare. Scores of Belgian children reportedly have suffered from vomiting, nausea and dizziness after drinking Coke products.

HealthSouth

(HRC) - Get Report

jumped 1 3/8, or 9.7%, to 15 9/16 on last night's news the company plans to split its operations into two separate publicly traded companies -- one for inpatients and patients needing hospitalization (to be called

HealthSouth Hospital

), and the other for the company's larger outpatient group.

Icos

(ICOS)

plunged 9 1/8, or 20.8%, to 34 15/16 after saying the Phase 2 clinical trial of its

LeukArrest

hemorrhagic shock drug showed the product is safe but failed to limit body damage to certain trauma victims.