Market Bulls Sing, Sing Out Loud

A crescendo of buying, heard in all corners of the market, leaves Wall Street's ears happily ringing.
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The mellifluous tones of

Alan Greenspan

, the sound of the impeachment proceedings coming to a close and the underlying hum of optimism erupted into a chorus of buying today, with technology and financials singing in perfect harmony. A majority of stocks supported the advance, providing substance to the upward move although trading volume remains less than exemplary.

Will all due respect to the C section of

The Wall Street Journal

, there apparently was plenty of money on the sidelines ready to come back into stocks at the slightest provocation. (Given that bonds hadn't exactly been lighting it up of late, one wonders where the

Journal

thought all the money had gone -- into gold?)

The

Nasdaq Composite Index

rose 96.05, or 4.2%, to 2405.55, enjoying its biggest point in history, eclipsing the 94.34-point gain

Sept. 8. The percentage move was the 10th-best in Nasdaq history.

Technology's biggest names in both over-the-counter and

New York Stock Exchange

trading gained in near-unanimity, sending the

Nasdaq 100

up 5.2%, the

Morgan Stanley High-Tech 35

higher by 6.1% and the

Philadelphia Stock Exchange Semiconductor Index

up 6.5%.

Internet names were also back in fashion (for one day, at least);

TheStreet.com Internet Sector

index surged 54.31, or 12.1%, to 505.21 while

TheStreet.com E-Commerce Index

jumped 10.92, or 11.6%, to 105.06. The vast majority of Net bellwethers were on the rise, while

Amazon.com

(AMZN) - Get Report

and

BroadVision

(BVSN) - Get Report

, each a component of both indices, climbed more than 12% apiece.

'The volatility of the recent consolidation in every major index except the Dow has been an incredible trading opportunity,' said Prime Charter's Scott Bleier. 'If we have this trading range of 60 to 80 S&P points, that's enough for a lot of traders to make a nice living.'

The

Dow Jones Industrial Average

climbed 186.15, or 2%, to 9363.46, while the

S&P 500

jumped 30.49, or 2.5%, to 1254.04. Even small-caps joined the party as the

Russell 2000

gained 8.20, or 2.1%, to 406.16.

As robust as big-cap technology stocks were today, financial names were nearly their equal and had a major influence on blue-chip proxies. The group was enlivened by

comments from Chairman Greenspan before the

House Banking Committee

, where he argued for reform of the Glass-Steagall Act. Such reform would clear the way for more mergers within the financial industry and with other industries such as insurance. In reaction, the

Philadelphia Stock Exchange/KBW Bank Index

jumped 3.4% while the

American Stock Exchange Broker/Dealer Index

gained 5.5%.

"It was good action," said an understated Bob Basel, director of listed trading at

Salomon Smith Barney

. "On a day like this there's a lot of green on the board. Groups as simple as retailers did well. The

American Stock Exchange Retailing Index

rose 30 points

or 3.7%, that's a huge move for a group that's not as volatile as the techs."

Basel noted "up volume was really healthy" at about 500 million shares on the Big Board vs. about 240 million down volume. However, "the market is not up on super heavy volume. You'd rather see it up on 900 or 950 million," the trader conceded. "The question is, can we sustain today's move tomorrow and then maybe break out of the trading range instead of it being a one-day wonder?"

In NYSE trading, 815.9 million shares changed hands while advancing issues led 1,776 to 1,178. In

Nasdaq Stock Market

activity, 969.3 million shares were exchanged while gainers led 2,304 to 1,587. The most troubling aspect of market internals was that new 52-week lows led new highs 101 to 18 on the Big Board and by 63 to 32 in over-the-counter action.

Save the Champagne for Valentine's Day

"Let's put it into perspective: Even after a powerful day like today we continue to be locked in a near-term trading range that is serving to consolidate the markets gains since the October lows," said Scott Bleier, chief investment strategist at

Prime Charter

. "It's still a bounce until we get back to the old

intraday high of 1283 on the S&P 500. We can go up another 40 S&P points without it meaning much in the overall trend of things."

However, the recent consolidation is a "very bullish phenomenon because the leadership

technology stocks corrected more than the lagging index," meaning the Dow, Bleier said. "And the volatility of the recent consolidation in every major index except the Dow has been an incredible trading opportunity. If we have this trading range of 60 to 80 S&P points, that's enough for a lot of traders to make a nice living."

Ultimately, the investment strategist believes the major averages will "embark on the next leg up which takes us to Dow 10,000 and the Nasdaq to the 2600-2700" range. But the near-term volatility is reminiscent of the third quarter of 1987 "on a pure market basis," he said, noting stark differences in underlying fundamentals. The type of crash which occurred in October 1987 was clearly far from investors' thoughts today, but Bleier said that is precisely why it should be remembered.

"Skepticism has no place in this market, but a healthy dose of skepticism is required for longevity in the financial world," he said. But "there's no room for it right now. Buyers disappeared for a couple of days, sat back and today said 'back into the pool.' The great game is not over."

In the microcosm of the market's action today, Bleier noted impressive moves by lesser-known players such as

Verisign

(VRSN) - Get Report

, up 16.1% "on no news," as well as household names such as

America Online

(AOL)

, up 9.2%,

Cisco

(CSCO) - Get Report

, which rose 6.4%, and

Sun Microsystems

(SUNW) - Get Report

, higher by 8.1%.

"Those are nice numbers," he said. "Lots of stocks moved to 50-day moving averages and here we have a very sharp bounce." An example being

IBM

(IBM) - Get Report

, which fell as low as 161 3/4 intraday Tuesday after closing as high as 197 on Jan. 21 and today rose 5.7% to 178 1/2. IBM was the biggest positive influence on the Dow industrials.

So great was the upturn today that

yesterday's biggest loser,

EntreMed

(ENMD)

, jumped 98.5%. Traders cited reports the

National Cancer Institute

has successfully replicated the anticancer drug endostatin, a different drug than the one from which

Bristol-Myers Squibb

(BMY) - Get Report

withdrew its support.

Among other indices, the

Dow Jones Transportation Average

rose 42.56, or 1.4%, to 3161.76; the

Dow Jones Utility Average

slid 2.49, or 0.9%, to 291.47; and, the

American Stock Exchange Composite Index

gained 10.59, or 1.5%, to 699.41.

The 30-year Treasury bond rose 1/32 to 98 10/32, its yield unchanged at 5.36%.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

rose 90.10, or 1.4%, to 6490.81 and the

Mexican Stock Exchange IPC Index

leapt 166.25, or 4.2%, to 4107.74.

Thursday'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.

)

True to its name,

VerticalNet

(VERT:Nasdaq) inclined 29 13/16, or 186.3%, to 45 3/8 after

Lehman Brothers

priced its 3.5 million-share IPO above range last night.

A host of other stocks traded for the first time today:

  • Catapult Communications (CATT:Nasdaq) jumped 2 7/8, or 28.8%, to 13 after Hambrecht & Quist priced its 3.35 million-share IPO midrange.
  • Gabelli Asset Management (GBL:NYSE) lifted 5/16 to 17 13/16 after its 6 million-share IPO priced within range by Salomon Smith Barney. ( TheStreet.com wrote about the offering last night.)
  • Healtheon (HLTH:Nasdaq) shot up 23 3/8, or 292.1%, to 31 3/8 after Morgan Stanley Dean Witter priced its 5 million-share IPO above range.
  • Korn/Ferry (KFY) - Get Report slid 1, or 7.1%, to 13 after Credit Suisse First Boston priced its 11.75 million-share IPO midrange.
  • Prodigy (PRGY:Nasdaq) flew up 13 1/8, or 87.5%, to 28 1/8 after Bear Stearns priced its 8 million-share IPO at the high end.

Today's broad market turnaround was reflected in two individual issues that sank big earlier in the week.

Lycos

(LCOS)

took back 15 9/16, or 17.8%, to 103 1/4 after

USA Networks

(USAI) - Get Report

said its merger agreement with the company had the support of Lycos' largest shareholder,

CMG Information Services

(CMGI)

. Apparently CMGI, which owns roughly 20% of Lycos stock, backs the deal only if Lycos gets a better premium for its shareholders, according to wire reports. USAI rose 5/8 to 40; CMGI climbed 22 5/8, or 24.7%, to 112.

And EntreMed blasted up 12 11/16, or 98.5%, to 25 11/16 after

The Boston Globe

reported scientists using the company's cancer drug endostatin reproduced tumor-shrinking results in mice. On Wednesday, the stock sank 47% after Bristol-Myers Squibb modified an agreement with the company about a different cancer protein, angiostatin, calling for EntreMed to assume from Bristol-Myers responsibility for all preclinical and clinical work on angiostatin.

Mergers, acquisitions and joint ventures

Electronic Data Systems

(EDS)

took in 2 7/16, or 5.3%, to 48 5/16 after setting an information technology services pact valued at $17 billion with

MCI WorldCom

(WCOM)

. MCI WorldCom rose 4 1/8, or 5.4%, to 80 7/16. EDS will acquire

MCI Systemhouse

for $1.65 billion in cash. And more than 12,000 employees, primarily in the U.S. and Canada, are expected to move to EDS from employment with MCI WorldCom and Systemhouse.

Separately, MCI WorldCom posted fourth-quarter earnings of 23 cents a share, excluding its investment in

Embratel

, a Brazilian long-distance carrier, beating the 21-analyst view by a penny and moving up from the year-ago 10 cents.

Fingerhut

(FHT)

, a direct marketing company, swelled 5 9/16, or 29.6%, to an all-time high of 24 3/8 on news

Federated Department Stores

(FD)

will buy the company in a deal valued at about $1.7 billion, including debt. Fingerhut shareholders will receive $25 a share in cash under a tender offer expected to commence within a week. Federated sliced off 2 13/16, or 6.6%, to 39 11/16.

TheStreet.com

took a closer look at the deal in a

piece this afternoon.

SDL

(SDLI)

brought in 2 13/16, or 5.3%, to 56 after last night saying it will acquire

Polaroid's

(PRD)

fiber laser business for $5 million. SDL said it plans to post a $2.5 million first-quarter charge on the purchase. Polaroid jumped 11/16 to 19 13/16.

SportsLine USA

(SPLN)

vaulted 5 1/8, or 14.8%, to 40 1/8 after

CBS

(CBS) - Get Report

extended by five years the companies' equity-for-promotion exchange that created

CBS SportsLine

. CBS' stake in SportsLine USA has increased 18%, which could grow to more than 27%. The extended agreement allows CBS to promote CBS SportsLine during broadcasts pursuant to a promotional schedule projected to be worth in excess of $100 million over the five-year extension term. CBS rose 1 1/16 to 36 1/2.

Sun Microsystems flourished 7 7/8, or 8.1%, to 105 5/16 on word it committed more than $1.25 billion, a larger financing role than was earlier disclosed, to help America Online buy

Netscape

(NSCP)

,

The Wall Street Journal

reported. AOL lifted 13 13/16, or 9.2%, to 164 11/16; Netscape took in 6 11/16, or 10.5%, to 70 7/16.

Earnings/revenue reports and previews

American International Group

(AIG) - Get Report

scored 7 3/4, or 7.9%, to 106 1/2 after posting fourth-quarter earnings of 95 cents a share, topping the 18-analyst view of 93 cents and the year-ago 84 cents.

Amkor Technology

(AMKR) - Get Report

soared 2 5/16, or 25.9%, to 11 1/4 after last night beating fourth-quarter earnings estimates by 2 cents a share.

Applebee's

(APPB)

swelled 2, or 8.4%, to 25 13/16 after last night reporting fourth-quarter earnings of 39 cents a share, in line with estimates.

CMP Media

(CMPX)

flew 8 3/8, or 45%, to 27 after last night topping fourth-quarter earnings predictions by a penny a share. Today, Bear Stearns raised it to buy from attractive.

CNet

(CNET) - Get Report

advanced 37 15/16, or 41.6%, to 129 1/2. Along with declaring a 2-for-1 stock split, the company posted earnings of 18 cents a share, 8 cents higher than the 11-analyst outlook and above the year-ago loss of 62 cents. Today,

NationsBanc Montgomery Securities

raised the stock to buy from hold. The news helped spur the Internet sector's rebound today. Notably,

Ameritrade

(AMTD) - Get Report

jumped 14 7/16, or 17.3%, to 98 1/2.

Fox Entertainment

(FOX) - Get Report

reeled in 1 1/2, or 6%, to 26 11/16 after last night coming in 4 cents a share ahead of second-quarter earnings estimates.

Gardner Denver

(GDI) - Get Report

sloughed off 1 1/8, or 8.5%, to 12 1/8 after last night saying its sees 1999 earnings dropping by 20% to 25% from 1998 levels. The company also posted fourth-quarter earnings 7 cents a share ahead of expectations.

Keane

(KEA)

shot up 6 3/4, or 25%, to 33 3/4 after last night posting fourth-quarter earnings on target with estimates for 38 cents a share. Today,

Goldman Sachs

lifted the stock to buy from market outperform.

MarketWatch.com

(MKTW)

, which went public in January, added 6, or 9.2%, to 72 after last night posting a fourth-quarter loss of 47 cents a share vs. a pro forma loss of $1.38. Today, the company announced a partnership with

CompuServe

, the Internet service unit of AOL, to create a financial news center site on CompuServe.

Meadowcraft

(MWI)

plunged 2 7/8, or 31.5%, to an all-time low of 6 1/4 after saying it expects to report a second-quarter loss of $400,000 because of lower sales volume and higher production costs.

Onsale

(ONSL)

rose 2 5/16, or 6.6%, to 37 5/8 after last night recording a fourth-quarter loss of 16 cents a share, as expected.

Ortel

(ORTL)

skidded 2, or 22.5%, to an annual low of 7 after last night saying it sees a third-quarter loss of 9 cents a share because revenue was hurt by a slower-than-expected ramp of a major product enhancement. The seven-analyst view called for a profit of 3 cents vs. the year-ago nickel.

St. Jude Medical

(STJ)

fell 1 11/16, or 6%, to 26 9/16 after last night backing the lower end of first-quarter earnings forecasts. The company also reported fourth-quarter earnings in line with estimates for 36 cents a share.

Sybase

(SYBS)

excelled 15/16, or 11.5%, to 9 1/8 after saying it sees 1999 earnings of 20 cents to 26 cents a share and that it would consider a sale of the company, but not at its current valuation. The 12-analyst forecast calls for annual earnings of 20 cents vs. the year-ago loss of 23 cents.

Wet Seal

(WTSLA)

expanded 5 1/4, or 15.1%, to an annual high of 40 1/4 after last night saying it sees fourth-quarter earnings of 93 cents to 95 cents a share on strong sales. The four-analyst estimate called for 81 cents vs. the year-ago 63 cents.

In other earnings news:

Offerings and stock actions

Safeway

(SWY)

brought in 2 9/16 to 55 1/16 on word of a secondary offering of almost 20 million shares.

Analyst actions

Concord Communications

(CCRD)

climbed 7 1/2, or 17.2%, to 51 3/16 after

BancBoston Robertson Stephens

upgraded it to buy from long-term attractive.

Linear Technology

(LLTC)

advanced 9 7/8, or 10.5%, to 104 1/2 after

Prudential Securities

started coverage with a strong buy. The firm initiated coverage on several other semiconductor companies:

Analog Devices

(ADI) - Get Report

rose 1 5/8, or 5.5%, to 30 15/16 after the firm rated it a strong buy; and

Exar

(EXAR)

closed flat at 15 1/16,

Sipex

(SIPX)

rose 1 1/2, or 6.2%, to 25 7/8,

Unitrode

(UTR)

rose 1/16 to 16 3/16 and

Micrel

(MCRL)

rose 1 3/8 to 48 1/8 after the firm rated them accumulates.

Miscellany

The

Commerce Department

is expected to find six Japanese steelmakers guilty of dumping hot-rolled steel in the U.S., according to a report in the morning edition of the

Nihon Keizai Shimbun

. The ruling could be good news for U.S.-based steelmakers.

USX-U.S. Steel

(X) - Get Report

lifted 1/2 to 26 15/16;

Steel Dynamics

(STLD) - Get Report

dropped 1/16 to 15 15/16; and

Metal Management

(MTLM)

added 1/32 to 1 9/16.