When pondering the performances of the
Nasdaq Composite Index
and the Treasury market over the last month or so, one only needs to think of that wonderful
Separate Ways (Worlds Apart)
. Over the last month, the 30-year Treasury bond has plummeted, while seemingly every day in the face of that horrendous weakness, the Nasdaq Comp was setting new records.
Today the Comp and the long bond got back together as the Comp -- joined by the rest of the market's major averages -- slumped along with bonds. The weakness in Treasuries was one of the reasons cited for the infirmity in stocks as the yield on the long bond climbed to 6.30%.
Nasdaq Composite Index
fell 26.44, or 0.8%, to 3421.37, after closing at an all-time high on Friday at 3447.81. The
Join the discussion on
Dow Jones Industrial Average
gave up 40.99, or 0.4%, to 10,947.92. Charge-card titan
were prominent losers in the average.
Conversely, Dow members
were the big winners in the blue-chip gauge.
TheStreet.com Internet Sector
index, after soaring to an all-time intraday high early in the afternoon, ended the session in the red, falling 16.21, or 1.6%, to 969.40. The DOT peaked intraday at 1008.98. Today was the first time the DOT has hit 1000; it finished its first trading session, Nov. 13, 1998, at 254.85.
fell 8.79, or 0.6%, to 1407.83. The
shed 1.99, or 0.4%, to 456.95.
Scott Curtis, senior equity trader at
Brown Brothers Harriman
, pointed out that techs had a decent start to the day, but there wasn't any follow-through.
The trader also noted that the market is entering a month when people start to assess their holdings for tax-loss-selling purposes.
Red Hots index fell 6.84, or 2%, to 339.20. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.
The 30-year Treasury bond was down 30/32 to 97 17/32, yielding 6.31%. That's the highest yield since Oct. 27.
While major stock proxies didn't veer remarkably from Friday's closing levels, select sectors of the market jumped and swooned sizably.
The weakness in the long bond took a toll on financial stocks. The
American Stock Exchange Broker/Dealer Index
tumbled 3.7%; the
NYSE Financial Index
fell 2.1%; while the
Philadelphia Stock Exchange/KBW Bank Index
Stephen Shobin, chief technical analyst at
, said the market "appears to be skating on thin ice" but is still "viable."
On the negative side, he pointed out that breadth on the Big Board made a new low two days after the S&P 500 made a new high and financials continue to struggle, as do bonds and dollar/yen. Shobin said the market tends to do best when financials are strong.
The dollar rose against the yen and the greenback was quoted late this afternoon at 102.36 yen, up from 101.78 Friday.
On the positive side, the new-issue market continues to act well; longs are working better than shorts; two of the best bellwethers, GE and
, are in pretty good shape; and seasonality is positive for the market, he said.
In light of that, Shobin said his guess was that the market will suffer a 3%-to-5% correction which will be short-lived, and then will rally to new highs.
As for the bond market: "Bonds look precarious," Shobin said. Shobin noted that his partner Jeff de Graaf at Lehman pointed out today that the bond market received a bullish piece of news with the drop in existing home sales, but bonds didn't respond well. A strong market should embrace good news, and the fact that it didn't "is not a good sign," he said. Sales of existing single-family homes fell 6.6% in October, the
National Association of Realtors
Also in the "not a good sign" department is that the
Philadelphia Stock Exchange Utility Index
made a new low today, he said. And the weakness in dollar/yen isn't helping either, he pointed out. The Philadelphia Stock Exchange Utility Index gave up 2.5% to 273.17.
As for observations on the market right now, Shobin said that "a lot of people talk about big-cap" vs. little-cap stocks and he said that capitalization is not the call to make. Sector and group is the call, and he pointed out that small-cap technology, Internet and telecom stocks have done well despite their size. "It's the sector or the group" that matters, he said. Of poor performers in the small-cap world, he pointed to small- and mid-cap financials, and small- and mid-cap oil-service stocks.
A drop in oil prices helped doom oil-service stocks to a down day. The January crude-oil futures contract fell 91 cents to $25.96 a barrel. The
Philadelphia Stock Exchange Oil Service Index
Gold mining stocks were decimated as the price of gold tumbled in the wake of the
Bank of England's
auction of 25 tons of the precious metal, which didn't enjoy the frenzy of buyers that September's auction did. The
Philadelphia Stock Exchange Gold and Silver Index
On the plus side, retailers did well today. The
S&P Retail Index
New York Stock Exchange
trading, 870 million shares were exchanged while declining stocks beat advancers 2,126 to 989. On the
Nasdaq Stock Market
, 1.533 billion shares changed hands while losers beat winners 2,334 to 1,797. New 52-week lows beat new highs 373 to 54 on the Big Board, while new highs beat new lows 256 to 78 in over-the-counter trading.
Among other indices, the
Dow Jones Utility Average
continued its abysmal performance and hit a 52-week low today at 274.76 before closing a little off that level. It tumbled 4.43, or 1.6%, to 276.94. Elsewhere, the
Dow Jones Transportation Average
slipped 8.97, or 0.3%, to 2900.19, and the
American Stock Exchange Composite Index
advanced 1.72, or 0.2%, to 832.12.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
fell 117.84, or 1.5%, to 7772.10 and the
Mexican Stock Exchange IPC Index
lost 34.35, 0.5%, to 6303.10.
Monday'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.
Few sectors were spared from the selling pressure today, but financial stocks were hit especially hard as the yield on the benchmark 30-year Treasury climbed to 6.3%, amid weakness in the dollar against the yen. American Express lost 4 13/16 to 147 13/16, while
fell 2 1/16 to 131 1/2, weighing on the Dow.
Meanwhile, AT&T was doing its best to lift the Dow in the opposite direction, rising 2 7/16 to 59 7/8, after Salomon Smith Barney upped its rating to buy from hold and set a 12-month price target of 75 after a detailed analysis of the company.
Mergers, acquisitions and joint ventures
fell 1 3/4, or 11.9%, to 13 after it agreed to merge with
Endo Pharmaceuticals Holdings
in an all-stock deal. The agreement, which should be completed by the second quarter of 2000, calls for Algos to merge with a division of Endo with Algos holders receiving one share of Endo for every share they own. The merged company will be publicly traded and take Endo as its name.
added 2, or 8.6%, to 25 3/16 after it said it is negotiating a $1 billion agreement to purchase the testing facilities of
. According to Amkor, the transaction would call for it to pay roughly $800 million for three Anam packaging and testing facilities in Korea and $500 million to $600 million for newly issued Anam shares.
Carnegie Investment Management
upped its offer for a 3% interest in
to $15.75 a share from $14.35. Carnegie set a tender offer for 11.34 million Mattel shares on Nov. 1, while the stock was trading at $13.50 a share. Shares of Mattel slipped 1/8 to 14 15/16.
fell 1/4 to 32 1/2 after it set a pact to buy 14.9% of
from an institutional investor. Shorewood climbed 1 5/8, or 11.5%, to 15 3/4. The transaction calls for Chesapeake to pay $17.25 a share for 4.1 million shares of Shorewood.
climbed 1 to 39 3/8 after saying it will buy 35 radio stations from
, in a cash deal valued at $242 million.
gained 1 3/8 to 79 3/8 after
The Wall Street Journal
reported its $79.75 billion merger with
is expected to be approved by the
Federal Trade Commission
, possibly by tomorrow. Mobil climbed 9/16 to 103 1/2. The FTC is expected to call for the divestiture of certain gas stations, a refinery and other assets.
Royal Bank of Scotland
has launched a hostile bid of 15.90 pounds a share for
National Westminster Bank
after NatWest rejected a late-Friday friendly bid from the bank. NatWest dropped 9 7/8, or 6.7%, to 137. The latest offer comes in slightly ahead of the separate
Bank of Scotland
previous hostile bid of 15.77 pounds a share (including a special dividend). Royal Bank Deputy CEO Fred Goodwin said in an interview with
that the company expects the $42.51 billion offer for NatWest would add to EPS starting in the first year, excluding write-offs and restructuring charges.
climbed 13 1/2, or 9.9%, to 150 after it agreed to buy
, a maker of optical networking equipment and software, for $4.3 billion. The transaction calls for Redback to issue 31.3 million shares for all outstanding shares, options and warrants of Siara, with the combined company maintaining the Redback Networks name.
Walker Interactive Systems
jumped 6 3/32, or 180.5%, to 9 1/2 after it set a joint marketing and development partnership with stock market highflier
Commerce One climbed 8 1/8 to 323 3/4.
fell 1/4 to 29 3/4 after it announced its plans to purchase privately-held
, for an undisclosed amount. The deal should be completed by the end of the year.
Earnings/revenue reports and previews
Value City Department Stores
added 7/8, or 5.6%, to 16 5/8 after it posted third-quarter earnings of 23 cents a share, above the five-analyst estimate of 19 cents and the year-ago 12 cents a share.
lost 3/8 to 226 1/8 after it said that Friday's shopping volume rose 400% from last year.
Offerings and stock actions
rose 5/8, or 6%, to 11 after it set a repurchasing program to buy back 11.9 million shares, or roughly 10% of its stock.
slipped 1/4 to 26 1/2 after it set a $1 billion share-buyback plan.
gained 1 9/16, or 6.9%, to 24 1/2 after saying it cannot explain the recent decline in its stock price and that it has met its financial goals.
lost 4 1/4 to 97 3/4 after it said stockholders are selling 26 million shares, or 12.9% of the total. Those shareholders include the
and some private equity funds handled by
Morgan Stanley Dean Witter Capital Partners
New York Stock Exchange
said it has suspended and will move to delist the ADRs of
as part of a merger deal with France's
inched up 1/16 to 7 11/16 after it said it has finished the refinancing of its current $300 million accounts-receivable securitization facility with
added 4 3/16, or 10.2%, to 45 7/16 after setting a 2-for-1 stock split, which would be paid on Dec. 20 to shareholders of record Dec. 15.
upped its price target on
to 62 to66 from 55 and raised its third-quarter 2000 EPS estimates to 50 cents from 48 cents a share. Shares of Adaptec fell 1 1/2 to 53 15/16.
raised its intermediate-term rating on
to buy from accumulate. Shares of AMR climbed 1 3/8 to 60 3/16.
Donaldson Lufkin & Jenrette
initiated coverage of
with a buy rating and a price target of 70. Shares of Be Free mounted 11 1/2, or 33%, to 46 3/8.
Warburg Dillon Read
upped its price target for
to 91 from 72. Celestica added 1 9/16 to 74 7/16.
Credit Suisse First Boston
reinstated coverage of
with a buy rating and a price target of 105. Clarent advanced 1 9/16 to 85 7/16.
Merrill Lynch rolled out coverage of
with an intermediate long-term buy rating and a price target of 225. Shares of DoubleClick retreated 6 to 170 5/8.
Merrill Lynch upped its intermediate-term buy rating for
. Shares of Hadco advanced 1 3/8 to 47.
Merrill Lynch rolled out coverage of
with an accumulate rating and a long-term price objective of 46. ImClone Systems dwindled 3 3/16, or 7.7%, to 38.
on its recommended list. Shares of Ahold hopped 1 13/16, or 5.8%, to 32 15/16.
Morgan Stanley Dean Witter raised its price target for
to 90 from 80. Shares of Merck added 7/16 to 80 5/16.
raised its rating on
to trading buy from market outperformer. Shares of Metal USA gained 1 3/16, or 15.7%, to 8 3/4.
Warburg Dillon Read raised its price target on
to 58 from 42. National Semiconductor shares mounted 1 3/4 to 43 1/4.
Merrill Lynch downgraded shares of
to a long-term accumulate from buy. Northwest Airlines slipped 13/16 to 23 3/16.
raised its rating on
to strong buy from buy. Shares of Open Market bounced 5 9/16, or 18.9%, to 34 15/16.
Salomon Smith Barney
raised its rating on
to buy from neutral, based on the expectation that it will win the
merger dispute. Pfizer advanced 1 1/2 to 37 1/2, while Warner Lambert popped 2 3/8 to 91 3/8.
Goldman Sachs moved
to its recommended list from market performer. Portal Software rose 4 5/16 to 119 7/8.
Goldman Sachs said it added
to its recommended list. Shares of SPX edged up 1/16 to 77 1/4.
Merrill Lynch sliced its intermediate- and long-term ratings on
to neutral and accumulate from accumulate and buy. US Airways fell 1/4 to 28.
Merrill Lynch upped its price objective range for
to 110 to 120 from 85 to 90 while maintaining its buy rating. Shares of Xilinx climbed 6 3/4, or 7.5%, to 95 5/8.
Unauthorized trading losses at
Plains All American Pipeline
spooked investors today, sending the stock plummeting 9 1/8, or 46.8%, to 10 3/8.
, the parent of
Plains All American
, a master limited partnership that controls Plains All American Pipeline, said today that unauthorized trading activity by an employee in the pipeline company's crude oil trading division may yield losses estimated at $160 million for the year. As a result of the expected losses, the pipeline company and certain affiliates (not including Plains Resources) are in default on certain covenants under existing credit facilities.
The pipeline company is talking to its lenders about the problems, and Plains Resources has said it will provide up to $64 million in cash to Plains All American.
The companies said the pipeline company's "operating results for 1999 will be adversely affected,", and previous financial results may have to be restated. The companies have authorized a full investigation by outside counsel and
, while an additional investigation may be conducted by
on behalf of Plains' lenders.
Trading in Plains Resources, which owns 54% of the master limited partnership that controls Plains All American Pipeline, has not yet opened. The unauthorized trading at the pipeline company does not affect Plains' Resources upstream, or exploratory operations.
The bulk of the unauthorized trading took place between April and November, but may have started as early as January. "It appears that the trader in question violated Plains All American's policy of maintaining a position that is substantially balanced between crude oil purchases and sales or future delivery obligations," the company said in a statement. The trader has been fired.
joint newsroom covered the Plains mess in a
lost 3 1/2 to 79 7/8 after it said more than 4 million AOL members shopped online Thanksgiving week, tripling last year's numbers.
will probably set major plans for its small-car strategy, which could produce new models and a possible pact with another carmaker,
The Wall Street Journal
reported. According to the
, the plan could be the company's largest effort since its merger. Shares of DaimlerChrysler stumbled 1 9/16 to 68 1/8.
Delta Air Lines
slid 1/2 to 48 5/8 after it said it is offering discounted December travel to those who make their reservations online this week. Delta offered discounts of up to 5% off any fare that has an advance purchase requirement of three days or more for travel to all U.S. destinations the airline serves between Dec. 2 and Jan. 1.
tacked on 11/16 to 15 1/4 after it said its board elected Rudy Graf as CEO. Graf is currently president and COO of
was unchanged at 34 5/8 after it named Richard Booth as president and CEO.
Toy Story 2
raked in roughly $80.8 million in ticket sales since Wednesday, setting Thanksgiving-weekend movie records. Shares of Pixar skidded 2 5/16 to 44 3/16, while Disney gained 7/8 to 28 7/16.
climbed 1/4 to 15 3/16 after it announced its plans for at least a 5% price hike on all of its tube products, as of Wednesday.