Market Gets Split Decision as Net Stocks Cruise, Blue-Chips Lose - TheStreet

Market Gets Split Decision as Net Stocks Cruise, Blue-Chips Lose

Skittishness ahead of tomorrow's September jobs numbers and cheers at Yahoo!'s earnings led to a mixed market day.
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For a day where not much was supposed to happen, it sure seemed like there was an awful lot going on.

While the

Dow Jones Industrial Average

dipped 51.29, or 0.5%, to 10,537.05, most of the day's focus was on several skyrocketing names in the tech-heavy

Nasdaq Composite Index

.

But volume was relatively brisk ahead of tomorrow morning's release of the September employment numbers. (

TheStreet.com

previewed the release in a

story today.)

"We saw some skittishness today regarding what tomorrow's numbers will be," said Lisa Cullen, equity strategist for

Merrill Lynch

. "Ahead of the number, it looks to us as if some of the larger-cap techs are looking weak and financials are also looking weak."

Several of the big names helped drag down the Dow today, including

IBM

(IBM) - Get Report

, off 2 13/16, or 2.1%, to 116 3/8;

General Electric

(GE) - Get Report

, down 1 13/16, or 1.5%, to 121 7/8 and

Chevron

(CHV)

, lower by 1 13/16, or 2.1%, to 85 13/16.

While the Nasdaq Comp -- up and down all day -- inched up 3.49 to 2860.70,

Yahoo!

(YHOO)

continued to forge higher following its release late yesterday of better-than-expected third-quarter results.

Yahoo! was clearly the shining star of the tech sector today as the Internet company's shares rose 14 5/8, or 8.3%, to 190 3/16. The company reported third-quarter EPS of 14 cents, beating the

First Call/Thomson Financial

estimate of 9 cents.

In a research note published this morning,

Bear Stearns'

Internet analyst, Scott Ehrens, raised his fourth-quarter 1999 estimate for Yahoo! to 15 cents a share from 10 cents and boosted his 2000 view to 68 cents from 52 cents.

Several other analysts also proclaimed Yahoo!'s strengths with an abundance of upgrades, price-target boosts and general happy talk. For more on Yahoo! and the rest of the Net's winners and (as if!) losers, take a gander at

Nothing but Net.

Meanwhile,

TheStreet.com Internet Sector

index leapt 14.48, or 2%, to 723.22, benefiting from Yahoo!'s bounce.

In other company news,

American Home Products

(AHP)

and lawyers for former users of the fen-phen diet drug mix announced they had signed a memo of understanding under which the drug maker would pay about $5 billion over 16 years as part of a national settlement of thousands of liability lawsuits. AHP shares closed up 7.9%.

In today's most closely watched economic release, the number of Americans filing new claims for unemployment benefits rose by 10,000 last week, boosted by disruptions related to Hurricane Floyd, the

Labor Department

said. Jobless claims rose to 312,000 in the week ended Oct. 2 from an upwardly revised 302,000 in the prior week. Claims, which were up for the second week in a row, hit their highest level since July 17.

Meanwhile, on the downside, oil service stocks slumped. The

Philadelphia Stock Exchange Oil Service Index

was down 3%. The

Chicago Board Options Exchange Oil Index

was off 1.3%.

Forest and paper stocks improved, as the

Philadelphia Stock Exchange Forest and Paper Product Index

posted a 1.4% rise.

The

Philadelphia Stock Exchange Semiconductor Index

was down 4%, while the

Philadelphia Stock Exchange Computer Box Maker Index

was off 2.4%.

Cullen said that Merrill Lynch continues to be bullish about the telecom companies as a part of the tech sector and said she believes the recent merger news has affirmed those views.

MCI WorldCom

(WCOM)

continued its rebound from some of its merger-inspired losses, rising 7%. In

New York Stock Exchange

trading, WorldCom's proposed merger partner,

Sprint

(FON)

, gained 0.9%.

The

Russell 2000

dipped 1.65 to 428.11.

Among IPOs,

Goldman Sachs

priced

Calico Commerce's

(CLIC)

4 million-share IPO top-range at $14 a share. The shares ended the day up 301.3%.

Goldman also priced

PlanetRx.com's

(PLRX)

6 million-share IPO top-range at $16.

TheStreet.com

wrote about PlanetRx.com

this morning. Shares of PlanetRx.com surged 62.9%.

In NYSE trading 807.8 million shares were exchanged while decliners led advancers 1,725 to 1,220. In

Nasdaq Stock Market

action, 1.22 billion shares traded while decliners led 2,018 to 1,844. New 52-week lows outpaced new highs 124 to 44 on the Big Board while new highs won the day by a count of 118 to 103 in over-the-counter trading.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

rose 37.99, or 0.5%, to 7063.50 and the

Mexican Stock Exchange IPC Index

gained 67.43, or 1.3%, to 5183.68.

Thursday's Company Report

By Eileen Kinsella
Staff Reporter

(

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.

)

American Home Products rose 3 9/16, or 7.9%, to 48 11/16 after the drug maker said it would pay $4.83 billion over a period of up to 16 years as part of a national settlement of thousands of liability lawsuits, relating to its diet-drug cocktail fen-phen. The proposed settlement must be approved by the U.S. district court judge in Philadelphia who is overseeing thousands of nationwide fen-phen lawsuits. AHP said it doesn't believe the settlement will curtail company growth or change its standing with Wall Street credit rating firms.

Shares of Calico Commerce did a brisk first day of business. Shares of the e-commerce software company shot up 42 3/16, or 301.3%, to 56 after being priced last night at $14.

Shares of IPO PlanetRx.com also took off, closing up 10 1/16, or 62.9%, to 26 after being priced top-range at $16. The company is an online destination for prescription drugs, herbs and other medical supplies.

TheStreet.com

wrote about PlanetRx.com in a story

this morning.

Two more major online brokerages --

Fidelity

and

DLJdirect

(DIR)

-- said they'd be joining the after-hours trading party in the not-too-distant future.

Both Fidelity, the brokerage unit of the mutual fund giant, and DLJdirect, a unit of investment bank

Donaldson Lufkin & Jenrette

(DLJ)

, plan to trade Nasdaq and some listed stocks through the

REDIbook

electronic communication network, in which they and

Charles Schwab

(SCH)

each hold 25% stakes.

Spear Leeds & Kellogg

owns the remaining 25%.

Fidelity's hours for retail trading will now include a 4:30 p.m. through 8 p.m. EDT session. DLJdirect is planning trading for both the morning from 8 a.m. to 9:15 a.m. and the evening from 4:15 p.m. to 7 p.m. Schwab

earlier this week said it would trade from 4:30 p.m. to 7 p.m. on the REDIbook network.

DLJdirect improved 7/16 to 16 5/16.

--

Caroline Humer

Mergers, acquisitions and joint ventures

American Standard

(ASD)

rose 1 7/8 to 40 after saying it is selling off its medical diagnostic business to concentrate on traditional product areas. The company also announced that Chairman and CEO Emmanuel Kampouris will retire at the end of the year and will be replaced by Frederic Poses, currently president and COO of

AlliedSignal

(ALD)

.

Bell Atlantic

(BEL)

lost 1/4 to 66 7/16 after saying it is acquiring $550 million of

Metromedia Fiber Network's

(MFNX)

optic infrastructure. Metromedia moved up climbed 5 1/8, or 5.2%, to 32 7/8. Bell Atlantic will invest about $700 million to purchase about 9.9% of the equity of MFN via the purchase of newly issued shares at $28 a share. Also, Bell Atlantic will buy about $975 million in debt securities convertible into common stock at a conversion price of $34 per share, boosting Bell Atlantic's potential equity investment in MFN to about 19% of the company.

Intuit

(INTU) - Get Report

fell 3 1/8, or 10.4%, to 27 after agreeing to buy online mortgage company

Rock Financial

(RCCK)

for about $370 million in stock.

Macromedia

(MACR)

lost 3 9/16, or 6.5%, to 51 7/16 after agreeing to acquire privately held

Andromedia

, a supplier of Internet marketing software, in a stock deal worth about $275 million. Macromedia also unveiled alliances with

USWeb/CKS

(USWB)

, which closed down 1 1/4 to 30, and

BroadVision

(BVSN) - Get Report

, which gained 2 3/4 to 163 3/4. Macromedia said it plans to issue about 5 million shares of stock in the connection with the acquisition and take one-time charges of up to $5 million in its current quarter.

Nortel Networks

(NT)

inched up 13/16 to a record 54 5/8 after inking a deal to build a wireless network in Mexico for a subsidiary of

Unefon

, estimated at about $480 million.

Earnings/revenue reports and previews

Advanced Micro Devices

(AMD) - Get Report

fell 11/16 to 18 3/4 after last night reporting a third-quarter loss of 72 cents a share, narrower than the 18-analyst estimate of a loss of 97 cents but worse than the year-ago earnings of 1 cent.

Costco

(COST) - Get Report

edged down 11/16 to 78 1/8 after posting fourth-quarter earnings of 79 cents a share, beating the 22-analyst estimate of 76 cents and the year-ago 65 cents.

Dell

(DELL) - Get Report

climbed 1 1/16 to 44 3/8 after saying it does not expect the financial performance to be affected by the earthquake in Taiwan last month.

General Electric fell 1 13/16 to 121 7/8 despite posting third-quarter earnings of 80 cents a share, a penny ahead of the 13-analyst estimate and up from the year-ago 69 cents. Revenue jumped to a record $27.2 billion, a 13% increase over the year-ago period.

Goody's Family Clothing

(GDYS)

rose 1 1/4, or 15%, to 9 5/8 after it said September same-store sales rose 4.8%.

In Focus Systems

(INFS)

tacked on 3, or 16.4%, to 21 3/8 after posting third-quarter earnings of 31 cents a share, beating the seven-analyst estimate of 23 cents and the year-ago 8 cents.

MBNA

(KRB)

lost 1/4 to 24 5/8 despite reporting third-quarter earnings of 34 cents a share, a penny better than the 22-analyst estimate and up from a year-ago 27 cents.

Ohio Casualty

(OCAS)

rose 5/8 to 15 13/16 after it warned third-quarter earnings would be hit by $18 million to $20 million in net losses from Hurricane Floyd. The company estimated the loss would cut after-tax earnings by 19 cents to 21 cents a share, which could send the company into a loss for the quarter. The two-analyst estimate calls for earnings of 19 cents.

Sears

(S) - Get Report

lost 1 5/16 to 32 1/2 despite posting a 4.1% increase in September same-store sales.

Yahoo! bounded up 14 5/8, or 8.3%, to 190 1/4 after last night reporting third-quarter earnings of 14 cents a share before charges, ahead of the 26-analyst estimate of 9 cents a share, and up from the year-ago 2 cents before items.

Deutsche Banc Alex. Brown

,

U.S. Bancorp Piper Jaffray

and

Lehman Brothers

all raised ratings and/or earnings expectations on Yahoo!.

Offerings and stock actions

Webvan: Join the discussion on

TSC

Message Boards.

In response to

Securities and Exchange Commission

concerns,

Webvan

(WBVN)

said it is postponing its initial public offering, originally slated for this week. According to a report in Thursday's editions of

The Wall Street Journal

, the SEC is worried about Webvan's possible failure to observe quiet-period restrictions in giving pre-IPO interviews to

Business Week

and

Forbes

as well as its dissemination during road-show presentations of information not included in its prospectus. Details of the road show were brought to light by

Adam Lashinsky's

column yesterday, which earned mention in today's

Journal

.

Electronics Boutique

(ELBO)

lost 7/8 to 22 1/8 after it filed to sell 3.5 million shares.

Jupiter Communications

(JPTR)

said the projected price range of its 3.1 million share IPO was raised to $18 to $20 a share from $15 to $17 a share.

Neuberger Berman

(NEU) - Get Report

lost 1/2 to 31 1/2 on its first day of trading, after being priced at $32 a share by Goldman.

Shaw Group

(SGR)

closed flat at 30 3/4 after it announced plans for a 2.5 million-share secondary offering.

Ultrapar

(UGP) - Get Report

dropped 2 1/2, or 18.5%, to 11, after

Morgan Stanley Dean Witter

priced 11.9 million ADRs at $13.50 each, the bottom of the estimated range. One ADR is equal to five ordinary shares.

Analyst actions

American Airlines

parent

AMR

(AMR)

lost 3/16 to 61 3/8 despite an upgrade from Deutsche Banc to a strong buy rating from market perform.

Barnes & Noble

(BKS) - Get Report

fell 3, or 11.3%, to 23 1/2 after

J.P. Morgan

lowered its rating to market perform from long-term buy.

Concentric Network

(CNCX)

climbed 1 1/4, or 7.3%, to 18 1/2 after

PaineWebber

initiated coverage with a neutral rating.

Digex

(DIGX)

gained 2 3/4, or 11.2%, to 27 3/8 after PaineWebber initiated coverage with a buy rating.

eBay

(EBAY) - Get Report

slipped 1 9/16 to 150 1/8 despite a hand from Deutsche Banc which raised its price target to 175 a share.

First Health Group

(FHCC)

inched up 1/4 to 22 11/32 after Merrill Lynch raised its rating to accumulate from intermediate-term neutral.

Globix

(GBIX)

gave up 32 7/8, or 5%, to 46 1/8 after PaineWebber initiated coverage with a neutral rating.

Health Management Associates

(HMA)

slipped 1/8 to 7 5/8 after Merrill upped its intermediate-term opinion to accumulate from neutral.

Ingersoll-Rand

(IR) - Get Report

edged up 3/4 to 56 13/16 after Merrill raised its rating to intermediate-term buy from accumulate.

Service Corp.

(SRV) - Get Report

slipped 3/4, or 8.7%, to 7 7/8 after J.P. Morgan cut its rating to market perform from buy.

Verio

(VRIO)

rose 3 1/16, or 9.6%, to 35 after PaineWebber initiated coverage with an attractive rating.

Miscellany

Aetna

(AET)

rose 3/16 to 52 11/16 despite news that a group of anti-tobacco lawyers in Mississippi filed a federal racketeering suit against its health maintenance unit. The suit alleges that Aetna systematically limited, delayed, or denied medical care to its 18 million HMO enrollees.

Brunswick

(BC) - Get Report

fell 3/8 to 24 1/4 after saying it would take an after-tax charge of $31 million, or 33 cents a share. The company settled three lawsuits relating to the sale of its boat engines.

Oakley

(OO)

closed flat at 6 after Chairman and CEO Bill Schmidt resigned after less than six months in the post. Schmidt also quit as a board member and will be replaced by Jim Jannard, who founded the company in 1975.

Sabratek

(SBTK)

said it will further delay the filing of its second-quarter earnings report and may be delisted if Nasdaq does not grant it an extension.