Market Limps to Mainly Positive Closes on Poor Breadth, Volume
A late flurry of buying helped lift most major market gauges to close in the green, but for the market in general it was a hollow victory, considering -- here comes a phrase you've heard a billion times lately -- the market's breadth was slimily negative.
Major market barometers failed to move much during the session and traded in a narrow range around unchanged. With no economic data and many desks understaffed because of Yom Kippur, activity was painfully light as the
New York Stock Exchange
couldn't even muster volume of 600 million shares. In fact, volume on the Big Board was the lightest this year.
The
Nasdaq Composite Index
advanced 16.53, or 0.6%, to 2886.15, a hair shy of its all-time closing high of 2887.06. Shares of computer-related concerns rose solidly. Tech giant
Sun Microsystems
(SUNW) - Get Report
-- which announced a 2-for-1 stock split after the close Friday -- was just one of the components of the
Philadelphia Stock Exchange Computer Box Maker Index
that enjoyed a nice upside pop, hopping 4.1%.
The biggest point gainer on the Nasdaq was nuclear-fueled
Commerce One
(CMRC)
, a business-to-business e-commerce software concern, which soared 24.8% to 124 7/8. Commerce One's IPO was priced this summer at $21 a share.
Meanwhile, the blue-chip
Dow Jones Industrial Average
added 20.27, or 0.2%, to 10,823.90.
Positively influencing the average the most was
IBM
(IBM) - Get Report
, which rebounded from the thumping it endured Friday. Other notable winners in the venerable blue-chip gauge were
Hewlett-Packard
(HWP)
,
American Express
(AXP) - Get Report
and
General Electric
(GE) - Get Report
.
Merrill Lynch
named GE a Focus One selection and said it believes the stock could reach 150 next year.
Elsewhere, the
S&P 500
rose 0.11, or 0.01%, to 1335.53.
The
Russell 2000
shed 1.25, or 0.3%, to 433.20.
TheStreet.com Internet Sector
index gained a respectable 8.44, or 1.4%, to 629.00. DOT component
BroadVision
(BVSN) - Get Report
soared 10% after
Deutsche Banc Alex. Brown
started coverage of it with a buy rating. Elsewhere,
CMGI
(CMGI)
, also a DOT component, sported a solid advance. The Net giant said it's buying
AdForce
(ADFC)
.
The pummeling of
eBay
(EBAY) - Get Report
-- which is not a DOT component -- continued as
Microsoft
(MSFT) - Get Report
,
Excite@Home
(ATHM) - Get Report
and
Ticketmaster Online-CitySearch
(TMCS)
announced their newly formed online auction network,
FairMarket
, to compete against eBay, the online auction titan.
As for the market in general, John Lynch, director of investment strategy at
IJL Wachovia
in Charlotte, N.C., thinks it's going to "sit tight" for a couple of weeks.
Lynch thinks the Fed isn't going to do anything in October and that, coupled with significant earnings growth for the third quarter will bring the market to new highs.
The strategist thinks a lot of the financials and nondurables look good right now. Lynch said he still likes the tech sector long term, however, he said -- with a little chuckle -- investors aren't going to find the value in tech you're finding in the nondurables.
In fixed income, the benchmark 30-year Treasury bond slipped 5/32 to 100 26/32, yielding 6.065%.
In the world of oil,
OPEC
oil ministers are getting together in Vienna this week. Expectations are that OPEC will not raise output targets. In trading today, crude oil futures slumped. Oil and oil service stocks got hammered. The
Chicago Board Options Exchange Oil Index
said goodbye to 1%, while the
Philadelphia Stock Exchange Oil Service Index
swooned 4.3%.
Market watchers are waiting to see what comes out of the policy setting committee of the
Bank of Japan
, which may decide to ease monetary policy. As for the dollar vs. the yen today, the greenback weakened against the Japanese currency as joint intervention speculation cooled.
Louis Todd, head of equities trading at
J.C. Bradford
, said the dollar isn't the primary concern for the market right now, however, he did say people will be watching it with care. He said the primary concern for the market is the Fed and interest rates.
On the NYSE, decliners thumped advancers 1,749 to 1,160 on 568 million shares. On the
Nasdaq Stock Market
, losers outpaced winners 2,150 to 1,647 on 806.8 million shares.
On the NYSE, 172 issues set new 52-week lows while 44 touched new highs. On the Nasdaq, 117 issues set new 52-week highs while new lows totaled 71.
On the Big Board,
America Online
(AOL)
was most active with 16 million shares changing hands. It fell 3 to 86.
On the Nasdaq, Microsoft was most active with 24.1 million shares changing hands.
Among other indices, the
Dow Jones Transportation Average
said toodles to 20.49, or 0.7%, to 2979.30 (setting a new closing low for 1999); the
Dow Jones Utility Average
surrendered 2.12, or 0.7%, to 308.66; and the
American Stock Exchange Composite Index
lost 1.59, or 0.2%, to 792.85.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
fell 13.23 to 7049.10 and the
Mexican Stock Exchange IPC Index
rose 47.15 to 4998.83.
Monday's Company Report
By
Eileen Kinsella
Staff Reporter
(
Earnings estimates from First Call/Thomson Financial; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.
)
A jumble of technology deals powered up computer and Internet stocks. Lately it was Hewlett-Packard that got a boot-up from investors. The stock moved up 3 7/16 to 104 1/16 after the company announced plans to sell
Oracle's
(ORCL) - Get Report
customer relationship management software. H-P CEO Carly Fiorina and Oracle Chairman Larry Ellison will formally announce the deal during a press conference in Palo Alto, Calif., tomorrow morning. Oracle climbed 1 9/16 to 45 1/8.
Investors also cheered CMGI's decision to buy online advertising network AdForce for $500 million in stock, in a deal that further strengthens CMGI's advertising company holdings. CMGI tacked on 3 1/2, or 4.4%, to 83 7/16, while AdForce added 13/16 to 20 1/4.
Meanwhile, a story in the
The Wall Street Journal
that said Microsoft and
Ford
(F) - Get Report
are expected to forge a joint business that would allow Ford to make cars in answer to online orders, elicited a corpse-like response. Ford was unchanged at 49 15/16, while Microsoft, also in on the eBay gang-up, rose 1 1/16 to 97 9/16.
Mergers, acquisitions and joint ventures
Amazon.com
(AMZN) - Get Report
lost 1 1/16 to 62 3/4 after
TheStreet.com
broke the news today that it was in talks with
Home Depot
(HD) - Get Report
about a so-called
click-and-mortar joint venture raising the possibility that even Amazon cannot live by virtual business alone.
Insurance underwriter
Jefferson-Pilot
(JP) - Get Report
lost 1 11/16 to 65 13/16 after the company inked an agreement to buy
Guarantee Life
(GUAR)
for about $296 million, in an effort to strengthen its group life and disability insurance operations. Guarantee added 1 3/8 to 30 3/8. Jefferson-Pilot will pay $32 a share for Guarantee, in the half-stock, half-cash deal, which also includes the assumption of about $115 million in debt.
Microsoft, Excite@Home and Ticketmaster Online-CitySearch announced their newly formed online auction network,
FairMarket
, which will compete with the No. 1 online auction site, eBay. Investors seemed less than thrilled, with Excite down 3/4 to 37 11/16, while Ticketmaster Online added 9/16 to 26 1/2 . eBay however, was quaking in its boots, as frightened investors pushed the stock down as much as 5% in earlier trading.
FairMarket said the network could connect with more than 46 million visitors, or 73.3% of all Internet users. Among other participants in the new venture,
Lycos
(LCOS)
lost 5/8 to 43 3/4,
Xoom.com
(XMCM)
climbed 1 1/2 to 39 3/8,
ZDNet
(ZDZ)
zoomed 3 5/16, or 18.3%, to 21 7/16 and
Dell
(DELL) - Get Report
was unchanged at 48 7/8.
Ogden
(OG)
lost 1 5/16, or 10.3%, to 11 7/16 after the company announced plans to sell its entertainment and aviation divisions as an alternative to a spinoff, the
The Wall Street Journal
reported.
PSINet
(PSIX)
added 1 to 41 5/8 after it announced its acquisition of four Internet service providers: Brazil's
ServNet Servicos de Informatica e Communicacao
, Hong Kong-based
Vision Network
and Spain's
Infase Comubicaciones
and
Ciberia Internet
.
German drug maker
Schering
said it would buy New Hampshire-based
Diatide
(DITI)
, for $9.50 a share, or about $100 million. Schering said its goal is to become active in the radiopharmaceutical business, which involves the use of radioactive chemicals to test the location, size or function of tissues, organs and blood vessels. Diatide lifted 1 17/32, or 20.1%, to 9 5/32.
Suez-Lyonnaise
energy division
ELYO
said it has made a $22 a share, or about $129 million bid for the remaining interest of its majority-owned unit
Trigen Energy
(TGN)
. Trigen, which rose 2 15/16, or 15.3%, to 22 3/16, said it is considering the offer.
Sonera
authorized
VoiceStream's
(VSTR)
proposed merger with
Aerial
(AERL)
, in which Sonera has a major interest. VoiceStream steamed up 5 15/16, or 10.6%, to a record 61 15/16, while Aerial flew 6 5/8, or 33.2%, to an all-time high of 26 5/8. Meanwhile, Aerial's majority shareholder,
Telephone & Data Systems
(TDS) - Get Report
added 4 1/4, or 5.6%, to 79 3/4 after saying it canceled plans to spin off the digital cellular phone company in light of the VoiceStream merger. TDS said it would tender its 59.1 million-share stake to VoiceStream.
Earnings/revenue reports and previews
A.G. Edwards
(AGE) - Get Report
added 1/8 to 24 7/8 after the company posted better-than-expected second-quarter results of 86 cents a share, compared with the two-analyst estimate of 81 cents, and up from a year-ago 74 cents.
Consol Energy
(CNX) - Get Report
lost 5/16 to 13 3/16 after the company lowered earnings expectations for the quarter and the year, citing lower prices for bituminous coal. Consol said it expects results for the current quarter to be 12 cents to 18 cents a share, while the single-analyst estimate calls for earnings of 51 cents a share.
Dole Food
(DOL) - Get Report
slipped 2 3/4, or 11.5%, to 21 1/4 after it warned investors it would post third-quarter break-even results or a possible loss, missing the four-analyst estimate of 13 cents a share.
Offerings and stock actions
Best Buy
(BBY) - Get Report
climbed 3 1/16, or 5.4%, to 59 5/16 after it set a stock buyback plan worth $200 million. The retailer said it finished a $100 million repurchasing plan last October and now has roughly 205 million outstanding shares.
Cost Plus
(CPWM)
fell 1 3/8 to 45 3/4 after it set a 3-for-2 stock split.
iGo
announced plans for a 5 million-share initial public offering set to price in an estimated range of $9 to $11 a share.
BancBoston Robertson Stephens
,
Hambrecht & Quist
and
Thomas Weisel Partners
are serving as underwriters for the deal.
Analyst actions
ASM Lithography
(ASML) - Get Report
added 5/8 to 65 3/8 after
Credit Suisse First Boston
raised its fiscal 1999 and 2000 earnings estimates to 62 cents and $2.25 a share, respectively.
Complete Business Solutions
(CBSI)
lost 1 5/16 to 13 15/16 after
Donaldson Lufkin & Jenrette
sliced its rating to buy from top pick.
Duke Energy
(DUK) - Get Report
climbed 9/16 to 56 7/16 after First Boston upgraded the stock to buy from hold, and raised 2000 earnings estimates to $3.95 a share, from $3.85 and 2001 earnings-per-share estimates to $4.29 from $4.12.
General Electric
(GE) - Get Report
tacked on 2 to 122 after
Merrill Lynch
added the stock to its Focus One list, and said it could hit 150 by next year.
MedQuist
(MEDQ)
lost 2 9/16 to 32 7/8 despite a shot in the arm from First Boston, which upped its rating to strong buy from buy.
Paychex
(PAYX) - Get Report
lost 1/8 to 32 5/8 after
Warburg Dillon Read
upgraded the stock to buy from hold.
priceline.com
(PCLN)
powered up 5 11/16, or 9.7%, to 64 3/16 after Warburg Dillon Read upped its rating on the stock to strong buy from buy.
RealNetworks
(RNWK) - Get Report
climbed 7 3/16, or 7.7%, to 100 13/16 after
CIBC World Markets
initiated coverage with a buy rating and set a price target of 120.
Starbucks
(SBUX) - Get Report
slipped 15/16 to 21 1/16 after
Morgan Stanley Dean Witter
analyst Robby Ohmes sliced his first-quarter estimates to 16 cents from 18 cents a share and raised third-quarter EPS numbers by 1 cent to 17 cents a share.
UnitedHealth
(UNH) - Get Report
lost 2 15/16 to 58 , despite First Boston's optimism about its net pricing yields and an increased 2000 earnings estimates to $3.55 a share from $3.00.
U S West
(USW)
lost 15/16 to 56 after Morgan Stanley rolled out coverage with an outperform rating and set a price target of 69.
VeriSign
(VRSN) - Get Report
climbed up 6 3/8, or 5.8%, to 116, after Credit Suisse First Boston started coverage with a buy rating.
Miscellany
American Home Products
(AHP)
added 1/2 to 46 1/2, shrugging off a story in
The New York Times
that said Wall Street analysts fear the planned fen-phen settlement may go too far to accommodate plaintiffs, leaving the drugmaker open to lengthy legal proceedings. According to the
Times
, the company and plaintiffs agreed to an initial draft of a memorandum of understanding, which has American Home Products handing over $4 billion to former fen-phen users. Despite the doubts,
Salomon Smith Barney
analyst Christina Heuer raised her rating on the stock to outperform from neutral, citing strategic events including the settlement and potential merger and acquisition activity.
Asarco
(AR) - Get Report
was unchanged at 21 5/16 after it filed a complaint in federal court in Manhattan alleging that
Phelps Dodge's
(PD) - Get Report
unsolicited bid for it and
Cyprus Amax
(CYM)
is a violation of U.S. antitrust laws.Cyprus fell 1/4 to 17 5/16, while Phelps Dodge lost 5/8 to 57 3/8. Asarco is seeking damages for what it says is Phelps' wrongful interference with Asarco's proposed merger with Cyprus. Phelps Dodge said it would "vigorously contest" Asarco's legal actions and added it is confident it will receive regulatory approval for the three-way merger.
The
New York Stock Exchange
said
BFGoodrich
(GR)
would not explain its shares' 15% price decline on heavy volume. Today, the stock closed down 5 7/8, or 15%, to 31.
Shares of Commerce One traded at an all-time high of 128 9/16, and ended the day at a record 124 7/8, up 24 13/16, or 24.8%, amid positive analyst comments and increasing interest in the business-to-business sector of the Internet, which some researchers say will be far bigger than the business to consumer area. Commerce One, which helps businesses automate more of their purchases online, recently introduced new product and service offerings that will help it grow revenues and potentially take a leading position in the field.
DaimlerChrysler
(DCX)
climbed 7/16 to 71 11/16 after
The Wall Street Journal
reported the head of the commercial-vehicle division, Kurt Lauk, resigned from the company's management board. The story also said Thomas Stallkamp's role as Chrysler's president is in jeopardy.
Separately, the
United Auto Workers
union said a U.S. DaimlerChrysler assembler will receive more than $29,300 in economic gains over a new four-year contract. The union said that DaimlerChrysler inked a new plant closing memorandum letter, vowing not to shut down or spin-off any of its facilities. In addition, the deal calls for a 3% base wage increase for all hourly workers in each of the contract's for years and $1,350 up-front payment.
IBM rose 4 3/4 to 130 1/8 after announcing that as of Oct. 1, computer services executive Sam Palmisano would replace retiring
IBM Server Group
head Robert Stephenson.
Salomon Smith Barney
upped its fiscal 1999 and year 2000 estimates on oil to average $18.50 a barrel from $17.75 a barrel and $19 from $18 a barrel respectively. The revision comes one week before OPEC ministers assemble in Vienna.
USFreightways
(USFC)
said it couldn't explain why its share price was falling during today's trading session. Spokesperson Kenneth Ball said that there is not any news that contributed to the decline. USFreightways finished the session off 2 1/2, or 5.4%, to 43 5/16.
Uniholding
(UHLD)
said that Nasdaq has delisted its shares after it failed to issue its annual financial report on time. The company said that its stock would trade on the pink sheets until it issues the report later this week.
Wal-Mart
(WMT) - Get Report
slipped 7/16 to 46 3/16 after the
Journal
said it unveiled plans to launch 10 trial
Computer Doctor
centers in its stores to service computers and install software.
