SAN FRANCISCO -- Having avoided the clutches of that dastardly villain, Mr. Crash, and freed from the railroad tracks of
comments, the stock market built on the late-day momentum displayed
yesterday, returning today with an episode of aggressive buying, good breadth and spectacular Internet IPOs.
In the one of the biggest first-day performances ever,
soared 386.1% from its IPO price of $38.
But just as it seemed we were returning to those thrilling days of yesteryear, somebody tried to muffle the rally with a chloroform-soaked handkerchief.
reported rumors of a profit shortfall from
contributed to a last-hour dip, which was focused on tech stocks. (Subsequently, the network reported Cisco shares were rising in after-hours trading after falling 3.8% in the New York session.)
Coming Week: Join the discussion on
Notwithstanding the session-ending concerns, stocks ended in impressive fashion a week earmarked by the market's resiliency to obstacles both real and anticipated.
Dow Jones Industrial Average
rose 172.56, or 1.7%, to 10,470.25 after trading as high as 10,520.90. The
gained 18.04, or 1.4%, to 1301.65 vs. its intraday apex of 1308.81.
Blue-chip averages were led by
as financials rallied on hopes for a compromise on
Philadelphia Stock Exchange/KBW Bank Index
Securities law reform "has been in the works for so long," said one cynical market player. "Is
this latest development worth
almost 7 1/2 points in J.P. Morgan?
Nearly 5 points for
? Maybe it makes them a more attractive acquisition candidate, but I don't know. At one point today the BKX was up 5% -- that's big. That's Internet-like."
The Dow also got a boost from
and IBM. The
American Stock Exchange Retail Index
Morgan Stanley Cyclical Index
each gained 1.9%.
Nasdaq Composite Index
gained 14.55, or 0.5%, to 2816.50 although down considerably from its high of 2843.60. In addition to Cisco,
, down 3.1%, restrained the index. The
Red Hots index rose 9.5, or 4.3%, to 230.46. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money. As of today, Sycamore Networks
has replaced Gadzoox Networks
in the Red Hots.
Small-cap names in general fared well; the
rose 4.42, or 1.1%, to 418.69.
"I liked the way the day turned better over the course of the day," said Jay Meagrow, vice president of trading at
in Cleveland. "That first 130 points on the upside were pretty shallow, there wasn't a lot of volume. In the afternoon, the broader market stayed up and caught up."
As for the "little click down" in the final hour, "I don't think there was anything to it," Meagrow said, calling the session "pretty encouraging. It was pretty broad-based."
However, the trader was quick to note "there's another round of earnings next week. Net-net we'll probably continue to trade up
but I don't know how much further."
New York Stock Exchange
trading, 959.2 million shares were exchanged while advancers led declining stocks 1,956 to 1,057. In
Nasdaq Stock Market
action 1.2 billion shares traded while gainers led 2,208 to 1,704. New 52-week lows outpaced new highs 225 to 53 on the Big Board and by 138 to 135 in over-the-counter trading.
Panic to Manic?
In an abrupt about-face, the action this week has many players convinced
Oct. 15 was a significant bottom.
"It's tough to say we hit a bottom but the beauty is there is still so much money on the sidelines that can come in," said Charles Payne, president and chief analyst at
Wall Street Strategies
. "I think the smoke is starting to clear."
Payne's only caution comes from a realization "we've been in a bear market if you're in the wrong stocks. Last year there were more losers than winners, this year it's a lot more."
And there were clearly some big losers today, such as
, down 66.7% after warning of a possible shortfall going forward, and
, off 14.5% after a
declined 5% after forecasting disappointing profits yet again. (
examined Gillette's cash management techniques in a
story Tuesday, part of
Cracking the Books II series on corporate accounting shenanigans.)
Payne is nonetheless optimistic. "If you're in the right place, forget about it," he said, noting big winners such as Sycamore;
, up 11.9%; and
, which gained 9.9%.
"I'm excited about individual prospects," he said. "I wouldn't say we won't test 10,000 again, but I got a feeling we'll end the year with a bang. December is going to be a lay-up."
Hoping -- Yes, Hoping -- for a Tightening
Ironically, that outlook is based on a hope that
officials raise interest rates at their Nov. 16 meeting. "If they don't
tighten the same dark cloud hangs over the market," Payne said. But if they do, "convention wisdom" will be the Fed will have "evened the score" from its three easings of last fall. I think it's going to be a launching pad" with 10,800 being key resistance. If the index gets through that level it "opens the floodgates," the strategist said.
A far less optimistic view comes from John Bollinger, president of
in Manhattan Beach, Calif., and
"I don't buy it," Bollinger said flatly when asked about talk of the market's having bottomed last Friday. "The function of a rally in a bearish environment to convince as many people as possible. My forecast is for volatility though I believe it will have a downside bias due to a hostile monetary environment."
The veteran technician said "poor forward visibility is making manager nervous" and thus they're moving "whichever way trend breaks," whether it be bullish or bearish (clearly the former today). Add a lack of liquidity within individual names and the Fed getting "chary" with money and "you have a reasonable explanation of what's happening in the market place."
Among other indices, the
Dow Jones Transportation Average
rose 51.06, or 1.8%, to 2863.15; the
Dow Jones Utility Average
gained 1.16, or 0.4%, to 294.73; and the
American Stock Exchange Composite Index
added 6.52, or 0.8%, to 792.61.
For the week, the Dow gained 4.5%, the S&P climbed 4.3%, the Nasdaq added 3.1%, the Russell rose 1%, the DOT jumped 4.5%, the Dow transports gained 0.3%, the Dow utilities were unchanged, and the Amex Composite climbed 2%.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
gained 87.92, or 1.3%, to 7040.30 and the
Mexican Stock Exchange IPC Index
rose 50.79 or 1%, to 5156.06.
Friday's Company Report
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.
Sycamore Networks rocketed up 146 3/4, or 386.1%, to 184 3/4 on its first day of trading. The Chelsford, Mass. company makes products that send voice data over wavelengths of light. Shares were priced above range at $38 last night, by lead underwriter
Morgan Stanley Dean Witter
also enjoyed a solid first day of trading, sailing up 20 9/16, or 146.8%, to 34 5/8 after being priced last night at $14 a share.
Mergers, acquisitions and joint ventures
climbed 15/16 to 46 3/4 after it said its buying
mobile-phone assets in Poland, Hungary and Russia for $2 billion. MediaOne gained 5/8 to 69 5/8.
fell 15/16 to 45 1/2 after it announced plans to purchase
frozen foods division. Heinz said the deal is valued at roughly $137 million.
lost 7/16 to 24 3/4 after it announced plans to buy a 16% interest in
, in a deal valued at $7 million. The transaction calls for Mechanical to swap its
divisions, along with $7 million for 1.8 million newly issued SatCon shares and warrants.
rose 1 1/8, to 105 1/8 after it said it purchased U.S.-based corporate communications firm
, in a deal valued at $56.5 million.
climbed 1 7/16 to 58 1/16 after it said its exchange offer for
is finished and it is now ready to give cash and stock to Cyprus shareholders. According to the agreement, Cyprus Amax shareholders would exchange each share for $7.61 in cash and 0.2203 Phelps Dodge shares. Cyprus added 1/2 to 20 1/4.
Earnings/revenue reports and previews
Consumer goods giant Gillette gave up 1 7/8, or 5%, to 36 after warning it sees fourth-quarter sales and earnings declining as it tries to trim excess inventory. Gillette said it expected its results to bounce back and return to high growth rates "in the near future," according to
took a look at Gillette's announcement in a
story last night.
The company announced third-quarter earnings of 32 cents a share, in line with the downward-revised 12-analyst estimate and up from the year-ago 30 cents. Separately, Gillette said its board authorized the repurchase of an additional 25 million shares as part of its stock buyback plan, bringing the total plan to 100 million shares.
closely examined Gillette's cash management techniques in a prescient
Tuesday story, part of
Cracking the Books II series on corporate accounting shenanigans.
climbed 3/4 to 21 1/16 after it posted third-quarter earnings of 22 cents a share, a penny better than the six-analyst estimate and up from the year-ago 15 cents a share.
ascended 5 1/4, or 15.6%, to 39 1/16 after saying third-quarter sales rose 14% over last year, but income before taxes fell 19% from the year-ago period.
climbed 1 9/16 to 43 3/16 after posting a third-quarter loss of $2.29 a share, which includes a restructuring charge. The six-analyst estimate was for a $2.27 loss, while the year-ago report was a $3.53 loss, which also included a restructuring charge.
Public Service Company of New Mexico
edged up 9/16 to 17 1/2 after it posted third-quarter earnings of 52 cents a share, missing the five-analyst estimate of 63 cents and the year-ago 84 cents.
Standard Motor Products
lost 1/4 to 16 1/8 after it posted third-quarter earnings of 80 cents a share, missing the single-analyst estimate of 82 cents but up from the year-ago 72 cents.
slipped 7/8 to 21 5/8 after it posted third-quarter earnings of 44 cents a share, in line with the four-analyst consensus estimate and above the year-ago 30 cents.
U S West
lost 7/16 to 59 after it posted third-quarter earnings of 83 cents a share, beating the 16-analyst estimate of 80 cents and the year-ago 75 cents
jumped 5 1/4 to 495 3/8 after it reported third-quarter operating earnings of $5.90 a share, beating the six-analyst estimate of $5.61 and the year-ago $5.00. The company said results rose on an increase in advertising revenue from publications, growth in subscriber revenue at its cable unit, a 24% decline in newsprint expense and an increase in the company's pension credit.
, the garbage-hauling titan, added 7/16 to 17 1/4 despite warning that preliminary findings from an internal audit will likely "have a material unfavorable impact" on the company's third-quarter and full-year results.
Offerings and stock actions
said it is pushing back a 3.1 million-share IPO for
indefinitely, due to market conditions. The offering was expected to price between $12 and $14.
climbed 1/2 to 24 1/2 after it approved the spinoff of
Lanier Office Equipment
. Shareholders will receive one share of Lanier for each Harris share. Harris also said it will buy back 15 million shares following the spinoff.
rose 4, or 25%, to 20 in its trading debut.
has set plans for a 4.615 million-share IPO, which is expected to price between $12 and $14 a share, according to a
Securities and Exchange Commission
Credit Suisse First Boston
Donaldson, Lufkin & Jenrette
are serving as the deal's underwriters.
Credit Suisse First Boston
analysts Wendell Laidley and David Eller raised the company's fiscal 2000 estimates on
to 62 cents from 60 cents a share and introduced a 2001 estimate of 79 cents a share. The stock is currently stamped as a strong buy. Micromuse was soaring 20 3/8, or 28.20%, to 92 5/8.
sliced its price target on
to 75. Shares of Biogen fell 9 5/8, or 13%, to 64 3/8.
Morgan Stanley raised its 1999 earnings estimates on
to $2.10 from $2.05 and upped its price target to 70 from 64. Cox shares hopped 1 1/2 to 42 11/16.
Salomon Smith Barney raised
to buy from neutral and set a price target of 62. E.W Scripps bounced 2 1/2, or 5.8%, to 45 1/2.
Morgan Stanley Dean Witter
upped its rating on
to strong buys from market perform ratings. Shares of Exodus climbed 1/4 to 73 11/16 and National Semiconductor skidded 11/16 to 28 3/16, while Atmel hopped 2 9/16, or 7.7%, to 35 3/4.
Merrill Lynch downgraded Inktomi to intermediate-term neutral from intermediate-term accumulate for valuation reasons and "a significant increase in our operating-loss estimates" for fiscal year 2000. Merrill maintained its long-term buy rating on Inktomi, however.
Shares of Inktomi sank 17 1/2, or 14.5%, to 103 1/16.
raised its rating on
, which mounted 11/16 to 24 5/8.
upped its rating on
to trading buy from market outperform. Shares of Netzero hopped 5 3/16, or 27%, to 24 1/16.
upped its 1999 earnings estimates for
by 9% and its fiscal 2000 estimates by 19%, while maintaining its buy rating. Nokia advanced 1 1/8 to 105 1/8.
to accumulate from buy. Pervasive plummeted 24 1/16, or 66.75, to 12.
Deutsche Bank sliced its 1999 earnings estimates for
by 5% and its fiscal 2000 estimates by 10%, while maintaining its market perform rating. Reuters shares slipped 4 1/8, or 7.2%, to 53 7/16.
Morgan Stanley Dean Witter
raised its rating on four steel producers.
was raised to strong buy from outperform with a price target of 32, while
was raised to strong buy from neutral with a price target of 30.
TICKER TYPE="EQUITY" SYMBOL="CMC" EXCHANGE="NYSE" NAME="Commercial Metals" PRIMARY="NO" ACTIVE="YES"/> was raised to outperform from neutral with a price target of 36.
was also raised to outperform from neutral with a price target of 50. AK Steel advanced 2 1/16, or 14.4%, to 16 3/8 and USX climbed 1 3/16, or 5.3%, to 23 1/2, while Commercial Metals mounted 1/2 to 31. Nucor gained 2 13/16, or 6.5%, to 45 15/16.
Merrill Lynch upgraded
to intermediate-term buy from accumulate. Symbol Technologies added 5 7/16, or 16.5%, to 38 3/8.
Donaldson Lufkin & Jenrette
raised its rating on Tidewater to buy from hold.
. Shares of Tidewater popped 2 1/8, or 7.9%, to 28 7/8.
Goldman Sachs added
to its recommended list. Viant shares soared 18 3/4, or 26.6%, to 89 1/4.
said it plans to sue
, claiming that the retail Web site copied Amazon's patented
technology for online shopping. The proceedings charge patent infringement and seek an immediate court order to stop barnesandnoble.com from using the technology. Shares of Amazon slipped 2 1/8 to 78 5/8, barnesandnoble.com advanced 3/16 to 18 1/2.
said it plans to roll out its new Internet-enhanced operating system for its
computers this weekend. The new
Mac OS 9
operating system, which has a suggested retail price of $99, includes
, Apple's Internet search and shopping feature. Apple fell 2 3/16 to 73 15/16.
said Homestore will issue 250,000 of its shares to Cendant to settle litigation. At current market prices, the settlement is worth about $9.4 million, well below the $300 million in damages Cendant originally sought, alleging that Homestore failed to honor a commitment to sell it an equity stake. The companies also reaffirmed previous business agreements. Cendant lost 2, or 9.1%, to 19 15/16, while Homestore.com bounced 5 13/16.
reached a pact early today that is expected to clear the way for overhauling Depression-era banking laws,
said that Philippe Paillart has stepped down from his roles as chairman and CEO of its
division. The automaker has tapped Jac Nasser to immediately replace Paillart, who will remain as the division's president until sometime after January 2000. Shares of Ford advanced 3/4 to 53 7/8.
said it plans to roll out its fastest
chips on Monday without its highly anticipated 820 chipset family, which PC makers such as
are relying on for their own products' production. The 700-megahertz chipset will compete with
Advanced Micro Devices'
chip family. Shares of Intel mounted 1 3/4 to 73 7/16.
Nasdaq Stock Market
, a unit of the
National Association of Securities Dealers
, said it will make its pricing and quote systems available for after-hours trading from Oct. 25, though broker-dealers won't be required to participate until Nov. 15 Starting Monday, broker-dealers can vountarily begin using Nasdaq's reporting systems through 6:30 p.m. EST., instead of 5:15 p.m. EST. Firms that may have technological problems will have until Nov. 15 to make their internal systems compliant with the new hours.