Surprise, surprise, surprise. In a day
would love (and not because of its melodic qualities), stocks overcame early jitters as fears about a Brazilian devaluation faded.
But it was far from
on Wall Street, as secondary names lagged blue-chips for the first time in recent memory. Big names in technology, finance and retailing led an advance notable mainly for its lack of pizzazz.
Dow Jones Industrial Average
dipped as low as 8328.71 in its initial move, but soon recovered and spent most of the day in modestly positive ground. The index rose as high as 8432.98 before closing up 5.93, or 0.1%, to 8371.97.
The blue-chip proxy was restrained by
, which fell 4.5% in the wake of a critical
Wall Street Journal
Nasdaq Composite Index
was the session's biggest gainer, rising as high as 1738.37 before closing up 19.72, or 1.2%, to 1737.35. Tech stalwarts
were on the rise, sending the
up 1.7%. Big Board tech denizens gained as well, helping the
Morgan Stanley High-Tech 35
Additionally, Internet names were also higher following
last night's bullish profit report from
, which gained 1.8%. The
American Stock Exchange Inter@ctive Week Internet Index
rose 2.75, or 0.3%, to 1068.09, while the
fell 0.03, or 0.01%, to 371.47.
New York Stock Exchange
trading a modest 679.5 million shares were exchanged while declining stocks led 1,522 to 1,442. In
Nasdaq Stock Market
action, 785.9 million shares traded while advancers led 2,085 to 1,904. New 52-week highs led new lows 29 to 22 on the Big Board but new lows led 82 to 29 in over-the-counter trading.
Traders weren't overly disconcerted by the inability of the Dow and the S&P to sustain intraday highs.
"I think what's going on is a consolidation of the gains we've made in last two or three weeks," said Ned Collins, executive vice president of U.S. stocks at
Daiwa Securities America
. "We had an impressive, powerful move across the board and stocks performed so well they got ahead of themselves."
The action in financial stocks today was "encouraging," Collins said, but he rebutted the notion the worst is behind the overall market. "We're going to have volatility and backing and filling while people try to determine whether we've seen the lows or this is a very impressive rally in a bear market," the trader said. "No one has a real good handle on that yet."
Don't cry for me ... Brazil?
The details of President
Fernando Henrique Cardoso's
$23.5 billion austerity plan were unveiled today with nary a mention of devaluation.
Yesterday, Brazilian officials denied speculation such action is forthcoming. The effort to curb inflation via spending cuts and tax hikes is expected to pave the way for some $30 billion of assistance from the world community, the bulk from the
International Monetary Fund
Brazilian traders hardly embraced the plan, however, as the
fell 0.6%. In New York, ADRs of
, which has a big exposure to Latin America, slid 3.9% on a day when most financial names rallied.
The situation with Brazil the past few days reflects that international markets still have the power to roil Wall Street. But barring a true calamity, the overriding optimism that has reemerged here is not easily shaken.
"I think the global situation is not going to clear up anytime soon, and you're going to continue to hear horror stories," said Bruce Bittles, market strategist at
in Nashville, Tenn. "But if the market sells off it will be a buying opportunity now that the
has taken the posture it has."
A bear returns to the bullish fold
Bittles, who turned negative on the market last spring -- before it became fashionable -- became bullish again on
Oct. 15, when the Fed issued its intermeeting ease. On that day, his asset allocation model was revised to 50% each for stocks and bonds from 50% bonds, 40% stocks and 10% cash previously.
"I think the way the Fed did it -- late in the day,
which squeezed the shorts -- said they were going to do whatever it takes" to keep the market afloat, the strategist said. "I think eventually
major averages will work their way up to old highs. Whether they hit new highs or not depends on how corporate earnings will hold up in this environment of slower growth. But I think interest rates are going to be more important than earnings for a time."
Bittles declined to discuss individual stocks but favors small- and medium-sized companies because "they'd gotten so out of line of historic performance." He attributed their relative weakness today to the fact this is the last week of the month for mutual funds to engage in any "tax-loss selling" not already completed.
In terms of groups, the strategist favors financial stocks and retailers, which both rebounded from yesterday's weakness.
With financial giants
up 1.7% and
higher by 2.4%. to lead the way, the
Philadelphia Stock Exchange/KBW Bank Index
gained 1.2% while the
American Stock Exchange Broker/Dealer Index
rose 2.5% and
climbed 3.8% to help push the
American Stock Exchange Retailing Index
Among other indices, the
Dow Jones Transportation Average
fell 15.43, or 0.6%, to 2750.24; the
Dow Jones Utility Average
gained 1.98, or 0.7%, to 300.28; and the
American Stock Exchange Composite Index
rose 2.14, or 0.3%, to 634.52.
The price of the 30-year Treasury bond fell 19/32 to 105 19/32, sending its yield up to 5.13%.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
rose 37.02, or 0.6%, to 6033.79 and the
Mexican Stock Exchange IPC Index
tumbled 73.78, or 1.9%, to 3843.67.
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last night, America Online picked up 2 1/8 to 124 1/8 while
slipped 2 9/16 to 80.
Earnings/revenue reports and previews
tanked 5 7/16, or 23.3%, to 17 15/16 despite late yesterday reporting third-quarter net profits of $1.38 a share, up from 99 cents a year ago. Today, analysts told
the company's quarter operating figure was below the seven-analyst consensus for $1.35.
shot up 1 7/16, or 23%, to 7 11/16 after reporting third-quarter earnings of 9 cents a share, up from 7 cents a year ago. The company also forecast its fourth-quarter results could be up as much as 100% sequentially. No estimates were available.
hopped 1 3/4, or 16.1%, to 12 5/8 after posting third-quarter earnings of 28 cents a share, in line with estimates, yesterday.
skidded 11/16, or 14.5%, to 4 3/16 after posting a third-quarter loss of 27 cents a share, reversing a profit of 2 cents a year ago and well shy of the 15-cent profit expected by the five-analyst consensus. The loss includes $21.4 million in pretax charges; results excluding the charges were not provided.
shaved off 7 5/8, or 30.2%, to 17 3/4 after late yesterday reporting a third-quarter loss of $2.42 a share, well in excess of the 16-analyst consensus for a shortfall of $2.08 and year-ago loss of $1.62.
lowered its long-term rating to accumulate from buy and its near-term rating to neutral from buy.
removed the stock from its recommended list, dropping it to market perform.
collapsed 1 1/8, or 42.9%, to 1 1/2, matching an all-time low, after late yesterday posting a third-quarter loss of 83 cents a share, wider than the 49-cent loss of a year ago and well shy of the three-analyst consensus of a nickel profit. Interplay warned that its fourth-quarter results would be shy of expectations, currently at profits of 20 cents. The company said it has engaged
to help it pursue strategic alternatives. Today,
dropped it to neutral from buy.
slouched 3 7/8, or 27.2%, to 10 3/8 after saying late yesterday it expects third-quarter earnings to come in at 13 cents to 15 cents a share. The two-analyst forecast called for earnings of 38 cents vs. the year-ago 7 cents.
BT Alex. Brown
lowered the stock to market perform from buy and
Morgan Stanley Dean Witter
cut its view to neutral from strong buy.
Lernout & Hauspie
lowered 6 3/4, or 14.9%, to 38 9/16 despite late yesterday reporting third-quarter earnings of 22 cents a share, a penny ahead of the five-analyst view and up from 13 cents a year ago. The speech technology company said it will have to reduce write-offs for acquisitions taken previously due to new
Securities & Exchange Commission
guidelines. The reduction will result in a corresponding increase in good will.
took a closer look at the report in a
shed 1 13/16, or 36.3%, to an annual low of 3 3/16 after posting second-quarter earnings of 3 cents per share, down from 14 cents a year ago and 11 cents shy of the five-analyst forecast. The company forecast weaker-than-expected third-quarter results, currently expected to be 18 cents a share.
grew 3 1/4, or 13.3%, to 27 7/8 although its third-quarter report last night included a profit of 25 cents a share, a penny shy of the six-analyst consensus and flat from year-ago results.
Old Republic International
slipped 4, or 18.2%, to 18 after missing third-quarter earnings forecasts by 3 cents a share yesterday.
gave up 1, or 9.4%, to 9 5/8 after late yesterday posting third-quarter profits of 21 cents a share, 3 cents shy of the five-analyst consensus and flat from year-ago results.
slid 1 7/16, or 8.4%, to 15 3/4 after warning its third-quarter earnings will be hurt by damage sustained to oil rigs during tropical storms. The 10-analyst view is currently for a loss of 23 cents in the quarter.
hopped 1 3/8, or 25.6%, to 6 7/8 after posting third-quarter profits of 16 cents a share, reversing a loss of 12 cents in the prior year. No estimates were available.
jumped 1 5/16, or 13.6%, to 11 after late yesterday reporting first-quarter profits of 16 cents a share, 2 cents ahead of the four-analyst consensus and well above year-ago results of 4 cents.
lost 3 5/16, or 14.9%, to 19 1/16 despite late yesterday reporting third-quarter results of 18 cents a share, 3 cents ahead of the five-analyst consensus and up from 11 cents a year ago.
fell 3 11/16, or 13.5%, to 23 3/4 even after beating the five-analyst consensus of 47 cents a share by a nickel with its third-quarter profits last night.
dropped 3 1/2, or 12.6%, to 24 1/4 after it reported third-quarter earnings flat from year-ago levels and 4 cents shy estimates last night. Today, BT Alex. Brown cut it to buy from strong buy.
Additional earnings news is compiled in a separate table
Mergers, acquisitions and joint ventures
powered up 2 3/8, or 42.2%, to 8 1/16 after
agreed to acquire the unit of
for $36.3 million in cash. International Technology grew 1, or 12.9%, to 8 3/4 and Fluor added 1/8 to 38 1/2 on the news.
sank 6 7/16, or 17.4%, to 30 9/16 after agreeing to be acquired by
in a stock swap worth $230 million. Interstate shares had risen sharply in anticipation of a buyout. Wachovia took in 2 5/8 to 85 3/8.
Offerings and stock actions
lifted 1 1/2, or 15.8%, to 11 after the company approved the buyback of up to 800,000 shares.
lost 1/4 to 77 1/4 even after
Credit Suisse First Boston
upped it to buy from hold.
scored 2 1/8, or 44.7%, to 6 15/16 after being upgraded to strong buy from hold at
added 2 5/16 to 74 7/8 after Goldman Sachs added the stock to its recommended list, raising it from market outperform.
surged 1 9/16 to 38 1/16 after Bear Stearns initiated coverage with a buy.
fell 4 3/16, or 23.3%, to an all-time low of 13 7/8 after
Deutsche Bank Securities
slashed it to accumulate from buy.