Stocks did a
today, tumbling for you throughout the morning and, like the pop singer's career, managing a bit of a comeback after the fall. Tech stocks led the recovery, notably big-cap bellwethers such as
, which rose 4.9% on the eve of its first-quarter earnings report.
Still, investors were largely bereft of interest in trading ahead of tomorrow's
Federal Open Market Committee
meeting. Furthermore, the majority of stocks were losers in the least-attended session on the
New York Stock Exchange
since March 22.
In NYSE trading, just 670 million shares were traded while declining stocks led advancers 1,993 to 1,043. In
Nasdaq Stock Market
activity, 793.3 million shares were exchanged -- its lightest level since March 1 -- while losers led 2,182 to 1,809. New 52-week lows led new highs 69 to 25 in Big Board activity while new highs led 63 to 40 in over-the-counter trading.
"It was a fairly featureless day. We did virtually nothing in the morning," said Jim Benning, a trader
. "Things picked up a little in the afternoon, but people were basically on hold to see what the
Like most on Wall Street, Benning expects the Fed to adopt a tightening bias but does not expect a rate hike, saying "they'll let the market do it for them."
As for what turned the tech tide tech today, the trader said: "I think they just got beaten up, it was overdone. I'd be surprised to see any big rally tomorrow, but based on the late-day activity we should see a relatively positive day."
Nasdaq Composite Index
rambled back from a decline as low as 2494.51 to close up 33.98, or 1.3%, to 2561.84.
In addition to aforementioned, the Comp was aided by chip and equipment makers such as
. Notably, the latter rallied 4.1% despite a downgrade by
Salomon Smith Barney
, helping the
Philadelphia Stock Exchange Semiconductor Index
rise 2.2%. Meanwhile, the
Aided largely by the same, the
closed up 1.69, or 0.1%, to 1339.49 after trading as low as 1321.18 early on. The
fell 1.78, or 0.4%, to 441.35, but off its low of 436.94.
Led by AOL and
, which each gained more than 8%,
TheStreet.com Internet Sector
index closed up 11.75, or 1.9%, to 641.28.
Dow Jones Industrial Average
, once as low as 10,745.80, closed off 59.85, or 0.6%, to 10,853.47.
The Dow was hampered by
and cyclicals such as
Morgan Stanley Cyclical Index
fell 3.4% after
Morgan Stanley Dean Witter
cut its recommendation to neutral from outperform.
fell 5.3% after sustaining a similar downgrade.
was among the Dow's best performers, rising 4.4%. After the bell, H-P reported second-quarter earnings of 88 cents a share vs. the 21-analyst estimate of 80 cents.
The sluggishness of today's session was evinced by the inability of some big merger announcements to extend their influence beyond the participants.
fell 1.4% to 60 1/4 after trading as low as 57 1/2 and
U S West
shed 6.4% after the telecom firms confirmed merger intentions.
rose 8.2% after agreeing to a $55-a-share buyout offer from
New Holland NV
, which fell 6.8%.
jumped 10.9% after accepting a $71.44-a-share offer from
, which fell 8.7%.
Logical, Practical and Risky
"Rates are slowly ticking up which causes folks who buy large-cap growth stocks to do some asset allocating" into bonds, said Roy Blumberg, analyst and portfolio manager at
Sheer Asset Management
. "But there's a speculative element that doesn't play that game and believes anytime stocks dip, you buy them. When
asset allocators don't put enough pressure on the market, speculators come right back and of course they always come back to hot names."
Therefore, today's tech-led bounce was "very logical, practical and kind of risky," Blumberg said. "People trying get out of big-cap growth stocks are lightening up to stay unless rates
fall a lot."
The analyst, who joined the New York-based investment management firm last week, believes the recent rise in rates is nearing its culmination, suggesting 6.20% might be the "worst" near-term for the long bond's yield. "But I don't think we're going to see any data to make rates go down short-term," he said. "If we're near the high, they might stick."
As for tomorrow's FOMC gathering, Blumberg said a switch to a bias toward tightening is "already in the market" and bonds "might even rally" on such news. According to
, 19 of the 30 U.S. primary dealers expect the Fed to adopt an asymmetric bias tomorrow but none expect a rate hike. Neither does Blumberg, but he believes there's an argument for just such an action.
Fed officials have "admitted they didn't need to ease as many times as they did," he notes. "I would argue the easing was a stock-market thing more than an economic thing and one
ease probably would have been enough."
Among other indices, the
Dow Jones Transportation Average
fell 15.22, or 0.4%, to 3651.12; the
Dow Jones Utility Average
added 3.27, or 1%, to 319.25; and the
American Stock Exchange Composite Index
slid 3.87, or 0.5%, to 784.94.
The price of the 30-year Treasury bond rose 4/32 to 91, its yield sliding to 5.90%.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
slid 12.95, or 0.2%, to 6873.55 and the
Mexican Stock Exchange IPC Index
dipped 61.70, or 1%, to 5851.50.
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.
As noted above, U S West tanked 4, or 6.4%, to 58 1/4 after confirming last week's reports it will merge with Global Crossing in a stock swap valued at $37 billion. Global Crossing, which gave up 7/8 to 60 1/4, said it will fold its planned acquisition of
into the merged entity. Frontier picked up 1/2 to 56 5/8.
Meanwhile, according to
is considering trying to break up the planned merger with a bid of its own. Qwest swelled 6 1/16, or 7.2%, to 90 7/8
Mergers, acquisitions and joint ventures
Case jumped 3 11/16, or 8.2%, to 48 1/2 after New Holland agreed to acquire the company for $55 a share, or a total of $4.2 billion plus an undisclosed amount of debt. New Holland lost 1 3/16, or 6.8%, to 16 3/8.
, for which the merged Case-New Holland is expected to create competition, tacked on 3/8 to 40 13/16.
added 1/2 to 54 1/8 and
added 1 to 87 3/8 on word they're combining interactive business services to create an Internet-based database product for corporate clients.
climbed 2 7/8 to 62 3/4 and
climbed 4 to 110 after announcing they will offer co-branded high-speed Internet access using Sprint's DSL network.
Gulfstream Aerospace shot up 6 1/16, or 10.9%, to an all-time high of 61 11/16 after General Dynamics agreed to buy the jet manufacturer in a $5.3 billion stock swap. General Dynamics sank 6 3/16, or 8.7%, to 65 1/4.
Life USA Holding
soared 9 3/16, or 90.7%, to an annual high of 19 3/8 after agreeing to be acquired by
Allianz Life Insurance Co. of North America
in a deal valued at $540 million. Allianz Life, a unit of Germany's
, said it would acquire all the shares of Life USA it doesn't already own for $20.75 a share in cash.
vaulted 13 3/4, or 40.7%, to an all-time high of 47 3/4 after
said it will acquire the medical practice management software firm in a $1.4 billion stock deal. Synetic sliced off 4 5/8 to 91.
fell 7/8 to 31 7/8 after saying it will acquire
. Cendant rose 3/16 to 17 15/16.
, a defense contractor, lowered 11/16 to 46 7/16 after announcing plans to sell four noncore automotive operations for $1.2 billion to $1.5 billion to reduce debt.
grew 2 13/16, or 17.2%, to 19 3/16 after Britain's
reaffirmed its $20-a-share cash offer for the company.
slid 2 5/8, or 8.8%, to 27 3/8 after privately held
agreed to buy the company in a stock deal calling for Westower shareholders to receive 1.81 SpectraSite shares for each share held.
rallied 5 11/16, or 42.9%, to 18 15/16 after
said it will buy the company for $825 million, including the assumption of $104 million in debt. Precision Castparts dropped 5/8 to 40 3/8.
slipped 7/16 to 58 3/16 after word it's expected to announce a technology and product alliance with Microsoft tomorrow. The agreement is expected to make it easy to connect Xerox digital copiers to networks running Microsoft software. Mister Softee lifted 2 3/16 to 79 1/8 after an earlier low of 77.
Earnings/revenue reports and previews
hopped up 5/32, or 7.3%, to 2 11/32 after reporting first-quarter earnings of 1 cent a share, in line with the single-analyst forecast and above the year-ago break-even quarter.
skidded 1 3/4, or 7%, to 23 1/4 after recording fourth-quarter earnings of 32 cents a share, on target with the 10-analyst estimate and above the year-earlier 26 cents.
tacked on 5/16 to 14 1/16 after posting first-quarter earnings of 27 cents a share, topping the five-analyst forecast for 15 cents and the year-ago 8 cents.
Toys R Us
lost 1/4 to 22 after recording first-quarter earnings of 7 cents a share, 3 cents higher than the 16-analyst view and in line with the year-ago figure. The company is hoping for a boost in earnings this quarter with the sale of
Star Wars: Episode I -- The Phantom Menace
-related action figures and video games. (
look at what it's like juggling two phones trying to get tickets for Wednesday's opening of the latest
Offerings and stock actions
rose 5/16 to 16 5/8 after filing for a 5 million-share offering of common stock.
tumbled 2 1/4, or 15.1%, to 12 5/8 also after announcing plans to offer 5 million shares. Moreover, investors fear the company will miss the June 15 deadline for delivery of an offshore oil drilling rig currently under construction. Missing the deadline will result in the termination of a five-year, $165,000 a day contract with
Air Products and Chemicals
gave up 2 1/8 to 44 after
Credit Suisse First Boston
cut it to hold from buy.
popped up 1 1/4 to 47 after
raised it to buy from neutral.
Morgan Stanley Dean Witter cut its ratings on Ford, which lost 3 3/16, or 5.3%, to 57 9/16, and General Motors, which lost 2 13/16 to 80 5/16, to neutral from outperform.
picked up 3/8, or 5%, to 7 15/16 after
raised it to strong buy from hold.
flew 3 1/8, or 11.3%, to 30 15/16 and
flew 1 7/16, or 7%, to 22 1/16 after
upped both names to near-term accumulate from neutral.
Iridium World Communications
declined 1 1/16, or 10.2%, to an annual low of 9 3/8 after
slashed it to underperform from market perform.
Prison Realty Trust
dwindled 2 1/16, or 12.1%, to an all-time low of 14 15/16 after
Legg Mason Wood Walker
downgraded it to market perform from buy.
slipped 1 to 70 after saying it will apply for one of the six enhanced banking licenses for foreign banks created by the
Monetary Authority of Singapore
Fusion Medical Tech
leapt 11/16, or 10.8%, to 7 1/4 after a bullish piece in
quoted Tony Pace of
hedge fund saying he expects the company's
to receive approval from the
Food and Drug Administration
. FloSeal is a treatment to stop active bleeding during surgery.
climbed 4 3/8, or 8.8%, to 54 on news it plans to spin off most of its controlling stake in
. Neiman Marcus closed unchanged at 30 1/2. Also,
BT Alex. Brown
upgraded Harcourt to buy from market perform.
plunged 4 3/16, or 35.6%, to 7 9/16 while
added 5/16 to 59 7/16 after saying an independent data safety monitoring board recommended a Phase III clinical trial of the companies'
immune-based therapy for HIV patients be terminated.