It looks like the bull is holding down the fort on Wall Street, with investors maintaining their positive outlook on the market. Tech fever managed to burn all the way through yesterday's trading session, helping the
Nasdaq Composite Index
finish over the
3000 mark. Despite rocky third-quarter earnings and Y2K issues looming, tech stocks are still on a hot streak, almost stealing the glory from the
, which has made some substantial gains of its own.
Meanwhile, market players are reeling from the news of a surprise bid from
Before last week's
Employment Cost Index
report, which signaled to the
that labor costs were rising more slowly than expected, investors hesitated to jump head first into a market.
Today's Market: Join the discussion on
"There is a seasonal issue that always plagues October. As a result, you had a lot of people on the sidelines, mutual funds on the sidelines and they were all replete with investable cash," said Ronny Kraft, hedge fund manager at
Gotham Capital Management
. "And then we had the watershed event, the ECI came in at .83 and change. The report, which was roughly .006 of a percent below expectations resulted in Thursday and Friday's 66.22-point runup in the S&P."
Last week's "return of the bull" gave a jolt to the tech sector after many third-quarter disappointments. According to Kraft, who
two weeks ago expressed concern over tech's outlook, mutual funds are playing major role in techs' resurgence.
"Companies aren't being rewarded for their earnings, but mutual funds are rewarding themselves," said Kraft. "With 70% of mutual funds ending their fiscal year in October, I call into question the activity of those funds at the end of the year. They came in and they rocked the market in those two days. Mutual fund companies want people to turn on the 6:30 news and see the Dow, Nasdaq and S&P up."
However, the market's heyday can't totally be attributed to mutual funds desire up end their fiscal year on an up note. Even Kraft allowed that the advanced/decline line was appearing more positive, "but that has been a pattern with the advance/decline line," he said. "It looks strong early in the day and then tapers off as the day proceeds."
While investors revel in Nasdaq 3000 euphoria, they are keeping one eye open for the outcome of tomorrow's October
. "Tomorrow is another one of these watershed events in the employment report," said Kraft. "The Street is looking for 313,000. Notably, there are a number of well-regarded economists looking for higher than that. If it's above 313,000, they're going to sell this market."
Although tomorrow's jobs report could put a dent in the recent Nasdaq buying spree, its not the only catalyst concerning investors. According to Kraft, Y2K issues are not going away, they're just moving closer as the new year approaches. "Chief officers at major corporations aren't going to be purchasing the new
Microsoft Office 2000
or the newest speedy Intel chip until they see the fall out from Y2K," said Kraft. "If Y2K is benign, then it would be more fair to assume that tech buyers will return in the first quarter of 2000."
In tech news, the Nasdaq Composite Index was advancing 16, or 0.5%, to 3044. Networking stocks were taking the lead in Nasdaq trading, with
Optical Coating Laboratory
, soaring 50 9/16, or 42.5%, to 169 11/16 on news of its merger with
The Dow Jones Industrial Average was bouncing 39, or 0.4%, to 10,649, with
, leaping 2 9/16, or 3.5%, to 75 15/16.
was also enjoying the ride, up 3 3/4, or 2.9%, to 132 7/8.
New York Stock Exchange
, financials were buoying up the Big Board with
climbing 4 7/16, or 6.4%, to 74 1/4, while
Morgan Stanley Dean Witter
was hopping 4 1/4, or 3.9%, to 113 1/8.
Other major indices were also in the green, with the broad S&P 500 bouncing 6, or 0.5%, to 1361, while the small-cap
was gaining 1 to 440.
TheStreet.com Internet Sector
index was climbing 17, or 2.2%, to 787.
, up 2 11/16 to 183 3/8, was pumping up the index after announcing a marketing deal with
On the Big Board, advancers were leveling decliners 1,574 to 1,338 on 645 million shares, while on the Nasdaq, laggards were edging out leaders 1,871 to 1,841 on 897 million shares. New 52-week highs were leading new lows on the NYSE, 83 to 66, while on the Nasdaq, highs were beating out lows 191 to 70.
On the bond front, the benchmark 30-year Treasury was up 15/32 to 100 9/32, with its yield at 6.10%. (For more on the fixed-income market, see today's early
Thursday's Midday Watchlist
In a surprise move, Pfizer has made an $82.4 billion offer to acquire Warner-Lambert. The offer values Warner-Lambert at $96.40 a share.
Join the discussion on
American Home Products
agreed to a $72 billion merger of equals, and it was not immediately clear whether Pfizer's bid would scuttle that pact.
All three stocks were halted at 12:49 p.m. EST, with Pfizer down 9/16 to 38, Warner-Lambert up 1 3/16 to 85 and American Home down 2 1/4 to 53 3/4.
The American Home Products/Warner-Lambert merger would create the world's biggest pharmaceutical company. The merged company is to be known as
and will rake in $26 billion in annual sales. The companies said AmericanWarner's 20-member board will consist of 10 appointees from AHP, with the remainder selected by Warner-Lambert. AHP Chairman and CEO John Stafford has been tapped as AmericanWarner chairman, while Warner-Lambert Chairman, President and CEO Lodewijk de Vink is slated as the company CEO.
wrote a story on the merger
Optical Coating Laboratory was flying 50 9/16, or 42.5%, to 169 11/16, after JDS Uniphase said it was buying it for $2.8 billion in stock. At midday, Optical, which makes thin film coatings and components, was the top gainer on the Nasdaq. Meanwhile
Morgan Stanley Dean Witter
started coverage of JDS with an outperform rating and a price target of 225. The stock was rising 1 11/16 to 193 1/8.
Mergers, acquisitions and joint ventures
Republic New York
jumped 3 5/8, or 5.6%, to 68 5/16 after
The Wall Street Journal
is close to forging a delayed deal to buy the bank, citing people familiar with the matter.
said they have entered a $75 million e-commerce pact with
. Xoom.com was lately down 1/4 to 63 3/4.
Viewer's Choice LLC
announced plans to forge a joint business with
to offer customers interactive features such as instant replays and statistics. ACTV was unchanged at 17, while Liberty Digital gained 1 7/8, or 5.8%, to 34 1/8.
Yahoo! gained 3 3/4 to 184 3/8 and NorthPoint climbed 2 3/4, or 10.6%, to 28 7/8 after saying they inked a marketing and distribution agreement.
Earnings/revenue reports and previews
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
gained 2 3/16, or 11.8%, to 20 11/16 after it posted third-quarter earnings of 37 cents a share, beating the 10-analyst estimate of 31 cents but down from the year-ago 55 cents.
rose 1 7/16, or 13.5%, to 12 1/8 after it reported a third-quarter loss of 71 cents a share, compared with a year-ago loss of 25 cents a share. A report on
said the First Call/Thomson Financial lone-analyst estimate of a 41-cent loss was incorrect and that the company actually beat estimates. Bluefly.com said gross quarterly revenues increased by over 17% and said it completed a number of initiatives designed to increase capacity for the holiday shopping season.
rose 1 3/4 to 83 after it posted a 14% increase in October same-store sales.
inched up 1/4 to 17 7/16 after it reported a third-quarter loss of 3 cents a share, in line with the four-analyst estimate but down from the year-ago 26-cent profit.
reported third-quarter earnings of 29 cents a share, in line with the 14-analyst estimate and up from a year-ago 24 cents.
rose 5/16 to 8 1/2 after it reported third-quarter earnings of 13 cents a share, which includes the beneficial effect of the premium deficiency recorded in the first quarter. The report beat the 17-analyst estimate of 11 cents and the year-ago 18-cent loss.
gained 7/16 to 31 5/8 after it posted third-quarter earnings of 37 cents a share, beating the 10-analyst estimate of 35 cents and the year-ago 33 cents.
slipped 1/4 to 38 1/16 despite boasting an 8% rise in October same-store sales.
fell 3 1/4, or 9%, to 32 15/16 after it posted third-quarter earnings of 91 cents a share, missing the nine-analyst estimate by a penny and up from the year-ago 76 cents.
climbed 2 5/8, or 5.2%, to 53 1/4 after it said October same-store sales rose 11.6%.
joint newsroom covered October same-store sales in a
story this morning.
Offerings and stock actions
is set to price a 4 million-share IPO for
at $7 to $9 a share.
Morgan Stanley Dean Witter
priced a 13 million-share offering for
at $43 a share. Shares of Covad rose 7/8 to 45 1/16.
jumped 7 3/8, or 16.2%, to 52 7/8 after saying its board approved the repurchase of up to 12 million shares.
jumped 12, or 7%, to 184 3/4 after saying it set a 2-for-1 stock split.
is expected to price a 25 million-share IPO for
today between $11 to $13 a share
Morgan Stanley sliced its rating on
to neutral from outperform. Albertson's fell 15/16 to 33 3/8.
Warburg Dillon Read
started coverage of
with a buy rating. Laboratory was unchanged at 2 15/16.
Deutsche Banc Alex Brown
narrowed its fourth-quarter loss estimate for
to 5 cents from 7 cents. Jupiter jumped 3 3/4, or 10.4%, to 39 13/16.
Credit Suisse First Boston
upped its fiscal 2001 earnings estimates on
to 86 cents a share from 79 cents and maintained a strong buy rating. Shares of Micromuse were hopping 18 13/16, or 18.8%, to 119.
started coverage of
New York Times
with buy ratings. New York Times, which also received a price target of 50, gained 1/8 to 38 1/8, while Scripps, whose target was set at 73, added 1/2 to 46 3/16.
Credit Lyonnais also started
as a hold due to its price. Time was rising 1 5/16 to 66 5/16.