The mellifluous tones of
, 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
thought all the money had gone -- into gold?)
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
up 5.2%, the
Morgan Stanley High-Tech 35
higher by 6.1% and the
Philadelphia Stock Exchange Semiconductor Index
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
, 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.'
Dow Jones Industrial Average
climbed 186.15, or 2%, to 9363.46, while the
jumped 30.49, or 2.5%, to 1254.04. Even small-caps joined the party as the
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
"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
. "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
, up 16.1% "on no news," as well as household names such as
, up 9.2%,
, which rose 6.4%, and
, 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
, 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,
, 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
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
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,
(VERT:Nasdaq) inclined 29 13/16, or 186.3%, to 45 3/8 after
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
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.
took back 15 9/16, or 17.8%, to 103 1/4 after
said its merger agreement with the company had the support of Lycos' largest shareholder,
CMG Information Services
. 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
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 rose 4 1/8, or 5.4%, to 80 7/16. EDS will acquire
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
, a Brazilian long-distance carrier, beating the 21-analyst view by a penny and moving up from the year-ago 10 cents.
, 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
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.
took a closer look at the deal in a
piece this afternoon.
brought in 2 13/16, or 5.3%, to 56 after last night saying it will acquire
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.
vaulted 5 1/8, or 14.8%, to 40 1/8 after
extended by five years the companies' equity-for-promotion exchange that created
. 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
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
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.
soared 2 5/16, or 25.9%, to 11 1/4 after last night beating fourth-quarter earnings estimates by 2 cents a share.
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.
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.
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,
jumped 14 7/16, or 17.3%, to 98 1/2.
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.
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.
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,
lifted the stock to buy from market outperform.
, 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
, the Internet service unit of AOL, to create a financial news center site on CompuServe.
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.
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.
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
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.
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.
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
brought in 2 9/16 to 55 1/16 on word of a secondary offering of almost 20 million shares.
climbed 7 1/2, or 17.2%, to 51 3/16 after
BancBoston Robertson Stephens
upgraded it to buy from long-term attractive.
advanced 9 7/8, or 10.5%, to 104 1/2 after
started coverage with a strong buy. The firm initiated coverage on several other semiconductor companies:
rose 1 5/8, or 5.5%, to 30 15/16 after the firm rated it a strong buy; and
closed flat at 15 1/16,
rose 1 1/2, or 6.2%, to 25 7/8,
rose 1/16 to 16 3/16 and
rose 1 3/8 to 48 1/8 after the firm rated them accumulates.
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.
lifted 1/2 to 26 15/16;
dropped 1/16 to 15 15/16; and
added 1/32 to 1 9/16.