Market Rallies Yet Again as Fed Worries Recede Further

Financials joined tech in the vanguard as Wall Street embraced the idea that the Fed will remain on hold Nov. 16.
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SAN FRANCISCO -- Seems the only thing the stock market has to fear from the

Federal Reserve

now is its own exuberance (irrational or otherwise). Maybe that was on traders' minds as they reeled in the initial euphoria over an inflation friendly

employment report

. Still, major proxies ended a mainly positive week with decent gains, highlighted by another round of records among tech gauges.

The

Labor Department

reported 310,000 nonfarm jobs were created in October, roughly in line with the official consensus and well below the 500,000 figure predicted by some economists. Moreover, the average hourly earning component rose just 0.1% vs. a forecast of a 0.3% gain. The unemployment rate dipped to 4.1%.

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Message Boards.

In reaction, the price of the 30-year Treasury bond rose 23/32 to 100 3/32, its yield declining to 6.04%. The dollar rose to 106.10 yen vs. 104.94 late yesterday

Major stock averages leapt at the open in the wake of the jobs report, then retreated steadily as the day progressed before finding support in the final 30 minutes of the session. Furthermore, no hesitancy was evident in the performance of IPOs

Cobalt Networks

(COBT)

, up 482%,

Wireless Facilities

(WFII)

, up 322%, and

Webvan Group

(WBVN)

, which rose 65% from its offering price.

The

Nasdaq Composite Index

eclipsed its previous record for the sixth-consecutive session, closing up 46.34, or 1.5%, to 3102.29 after trading as high as 3118.06. Internet favorites were also on the rise, sending

TheStreet.com Internet Sector

index up 18.06, or 2.3%, to 814.87, its second consecutive record close.

TheStreet.com

Red Hots index leapt 12.97, or 4.8%, to 281.75. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.

The

Philadelphia Stock Exchange Semiconductor

had another stellar session, rising 2.9% to an all-time best 621.11. In addition to its over-the-counter components, the SOX got a big boost from

Motorola

(MOT)

, up 7.3% to an all-time high of 114 1/4 after executives made positive comments about its chip business in a conference call with analysts.

Among traditional bellwethers, strong gains were again registered by the likes of

MCI WorldCom

(WCOM)

,

Sun Microsystems

(SUNW) - Get Report

, and

Cisco

(CSCO) - Get Report

. Additionally,

Qualcomm

(QCOM) - Get Report

gained another 11.5%, helping the

Nasdaq 100

gained 1.9% to a record 2755.56.

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Along with

Dell

(DELL) - Get Report

and

IBM

(IBM) - Get Report

,

Microsoft

(MSFT) - Get Report

was among a select few tech bellwethers in retreat. The software colossus dipped a fraction ahead of the findings-of-fact ruling in the government's antitrust trial, which will be released at 6:30 p.m. EST.

Once as high as 10,842.72, the

Dow Jones Industrial Average

closed up 64.84, or 0.6%, to 10,704.48. The

S&P 500

gained 7.59, or 0.6%, to 1370.23 after trading as high as 1387.48. The

Russell 2000

rose 2.50, or 0.6%, to 442.40.

"This is really good action," said one previously skeptical equity trader. "I still don't think they punch through to new

Dow highs, but if they continue this action for the next few days, there's a chance sooner than later."

In

New York Stock Exchange

trading, just over 1 billion shares were exchanged while advancers bested declining stocks 1,745 to 1,300. In

Nasdaq Stock Market

action 1.33 billion shares traded -- the sixth-busiest session in Nasdaq history -- while gainers led 2,196 to 1,806. New 52-week highs outpaced lows 95 to 92 on the Big Board and by 203 to 76 in over-the-counter trading.

Financials In, Oil Out

The Dow got its biggest boost from financials

J.P. Morgan

(JPM) - Get Report

and

American Express

(AXP) - Get Report

, as well as

Wal-Mart

(WMT) - Get Report

, up 3.7%. Weakness in

Disney

(DIS) - Get Report

-- down 8.3% after posting less-than-stellar earnings and making cautious comments about next year -- and

Exxon

(XON) - Get Report

-- off 3.3% -- restrained the index.

"

Goldman Sachs

said 'sell the oils and buy the financials' and it looks like people are listening," said Arthur Hogan, chief market analyst at

Jefferies

in Boston. "The oils are getting tattooed pretty good."

Indeed, Exxon was not alone on the downside among energy plays; the

American Stock Exchange Oil & Gas Index

shed 2.1% while, the

Philadelphia Stock Exchange/KBW Bank Index

rose 1.4%.

Hogan agreed the trend in oil and financials supports the growing sense inflation is not a threat, today's jobs report being just the latest in a string of recent reports suggesting as much.

"I would say we're making a pretty large wager nothing happens Nov. 16," the strategist said. "We've made some pretty significant moves on the long side in both the equity and bond markets. If something does happen, you're setting yourself up for a pretty big disappointment."

However, Hogan does not believe the Fed will tighten at its November meeting and agreed (as do most on Wall Street) a 25-basis-point hike will not unseat the market's renewed forward thrust.

"I don't think it's going to be very difficult to get through

Dow 11,000 heading close to 12,000" by year-end, he said. And "we definitely see upside potential for the S&P 500. At some point the 'Nifty 20' names are going get a little tired and in terms of valuation, you're going to find more bargains in the S&P 500. The catalyst is going to be consolidation in just about every sector."

Financials being a big beneficiary of that trend, Hogan recommends "overlooked" or beaten-down names such as

Knight/Trimark Group

(NITE)

,

Providian Financial

(PVN)

and

Imperial Bancorp

(IMP)

. He also recommends telecommunications network builder

MasTec

(MTZ) - Get Report

.

Jefferies has done no underwriting for the aforementioned, although it was lead underwriter for Hogan's other recommendation,

ZipLink

(ZIPL)

.

Among other indices, the

Dow Jones Transportation Average

rose 34.79, or 1.2%, to 3003.99; the

Dow Jones Utility Average

slid 0.74, or 0.2%, to 303.27; and the

American Stock Exchange Composite Index

dipped 0.73, or 0.1%, to 806.74.

For the week, the Dow dipped 0.2%, the S&P added 0.5%, the Nasdaq jumped 4.6%, the Russell rose 3.2%, the DOT jumped 8.5%, the Dow transports shed 1.8%, the Dow utilities fell 1.1%, the Amex Composite climbed 0.7% and the Red Hots rocketed 17.9%.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

gained 36.13, or 0.5%, to 7297.6 and the

Mexican Stock Exchange IPC Index

jumped 102.93. or 1.8%, to 5919.97. For the week, the TSE was up 0.6%, while the IPC rose 8.6%.

Friday'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.

)

A benign October employment started things off on the right foot this morning and major proxies, especially the Nasdaq Composite, managed to keep a firm grip on their gains. Benefiting from the overall tech frenzy were a number of initial public offerings.

Cobalt Networks, a server appliances provider soared 106 1/16, or 482.1%, to 128 1/8 after being priced last night at $22 a share. Wireless Facilities, which, appropriately enough, is a wireless equipment provider, shot up 48 5/16, or 322%, to 62. Meanwhile the much-anticipated offering of Webvan was finally delivered, though investors' appetites proved less ravenous than usual when it comes to dot com offerings. Shares rose 9 13/16, or 65%, to 24 7/8.

Mergers, acquisitions and joint ventures

Warner-Lambert

(WLA)

fell 1/16 to 89 15/16 after saying it would not pursue

Pfizer's

(PFE) - Get Report

unsolicited $79.7 billion rival bid for the company. Pfizer launched the offer in response to a planned merger between

American Home Products

(AHP)

and Warner. Shares of American slipped 3/4 to 54 1/4 while Pfizer dropped 3, or 8.1%, to 34 1/4.

Although the Warner-Lambert board said its proposed merger with AHP is in the best interest of shareholders, it did not say it was refusing Pfizer's bid. Warner also said it would defend its actions in legal proceedings brought on by Pfizer, calling the claims "totally without merit." Credit Suisse First Boston cut its rating on Warner Lambert to hold from a buy, while

Deutsche Banc Alex. Brown

trimmed Pfizer to an underperform from a buy.

Gruntal

also sliced its intermediate rating on Pfizer to market performer from outperformer.

TheStreet.com

wrote about Pfizer's bid in a story

last night. American Home also reiterated its intent to complete the merger with Warner, calling Pfizer's bid illusory and incapable of being completed. AHP also said it would vigorously fight Pfizer's lawsuit.

In other AHP news, a

U.S. Food and Drug Administration

advisory panel said it supports the approval of American Home Product's

Prevenar

vaccine, which stops children from catching pneumonia and meningitis. The panel, which found the vaccine to be safe and effective in children, is recommending that it receive FDA authorization. Pharmaceutical analysts see the vaccine as an important product for AHP.

AlliedSignal

(ALD)

rose 5/8 to 55 5/8 after saying it has begun a $9.50 a share tender offer for

TriStar Aerospace

(TSX)

, which it said TriStar's board has approved. TriStar inched up 1/8 to 9 1/8.

Medtronic

(MDT) - Get Report

rose 3/16 to 37 7/8 and

Xomed Surgical

(XOMD)

edged up 5/8 to 66 3/16 after both companies received shareholder approval for Medtronic's purchase of Xomed, and the deal was closed.

Synthetic Industries

(SIND)

jumped 3 3/4, or 13.2%, to 32 7/16 after it said it would be sold to a unit of

Investcorp

and other investors, in a deal valued at $535 million. The transaction, which calls for Synthetic to be bought for $33 a share, is set to close in mid December.

Teligent

(TGNT)

flew 14 5/8, or 29.8%, to 63 7/8 after saying it has raised $500 million in new capital to expand its buildout of local broadband networks, with the investor group led by

Microsoft

(MSFT) - Get Report

and private equity firm

Hicks Muse Tate & Furst

Shares of Microsoft slipped lost 1/8 to 91 9/16.

TheStreet.com/nytimes.com

joint newsroom covered the Teligent news in a

story today.

In other Microsoft news, a crucial ruling, the "findings of fact," is expected today in the Microsoft antitrust trial.

Earnings/revenue reports and previews

Coventry Healthcare

(CVTY)

inched up 1/32 to 7 after it said it plans to take a $2 million charge in the fourth quarter and exit the Indiana market by the end of the second quarter in 2000. The company said Indiana's health plan in the state was not profitable and not demonstrating good prospects for future growth.

Great Lakes REIT

(GL) - Get Report

rose 1/8 to 15 1/4 after it posted third-quarter funds from operations of 50 cents a share, beating the three-analyst estimate of 47 cents and up from the year-ago 44 cents.

iVillage

(IVIL)

slipped 7/16 to 25 15/16 after it posted a third-quarter loss of $1.12 a share, narrower than the three-analyst estimate of a $1.39 loss and the year-ago $1.92 loss.

Speedway Motorsports

(TRK) - Get Report

shed 17 7/16, or 40%, to 28 1/2 after it warned it expects to post a loss for the third quarter. The 11-analyst estimate currently calls for the company to earn 3 cents a share. The company said it expects to generate a profit in the fourth quarter, however it said it is likely net earnings will be $3 million less than expected.

Offerings and stock actions

Temple-Inland

(TIN)

rose 1 7/16 to 63 1/8 after it said it set up a repurchasing program of up to 6 million shares.

Xircom

(XIRC)

rose 1 5/8 to 55 1/2 after it announced plans for a 3.5 million-share secondary offering.

Analyst actions

Warburg Dillon Read

cut its rating on

Aflac

(AFL) - Get Report

to hold from strong buy. Shares of Aflac hopped 3/16 to 52 5/16.

Lehman Brothers

upped its price target on

Altera

(ALTR) - Get Report

to 70 from 60. Shares of Altera jumped 3 1/16, or 5.6%, to 57 1/2.

Warburg Dillon Read sliced its rating on

Cinergy

(CIN)

to a hold from a buy. Cinergy hopped 1/8 to 27 1/8.

Paine Webber

cut its rating on

Consolidated Natural Gas

(CNG)

to neutral from attractive. Consolidated Natural Gas fell 1/4 to 64 1/8.

PaineWebber

upped its price target on

Digex

(DIGX)

to 42 from 35. Shares of Digex added 4 1/8, or 12%, to 38 5/16.

Morgan Stanley Dean Witter

sliced its rating on

Eastern Enterprises

(EFU) - Get Report

to neutral from outperform. Eastern Enterprises was unchanged at 56 1/4.

Morgan Stanley rolled out coverage of

LTX

(LTXX)

with an outperform rating and set a price target of 25 on the stock. LTX bounced 1 1/4, or 7.2%, to 18 1/2.

Prudential Securities

raised the price target for

Network Solutions

(NSOL)

to 225 a share. Network Solutions gained 4 7/16 to 142 7/8.

Goldman Sachs

initiated coverage of

NTL

(NTLI)

, including it on its recommended list. NTL jumped 4 5/8, or 5.7%, to 84 9/16.

Salomon Smith Barney

boosted its rating on

Partner Re

(PRE)

to buy from outperform. Partner Re advanced 2 3/4, or 8.8%, to 34.

Deutsche Banc Alex. Brown

boosted its price target on

Qualcomm

(QCOM) - Get Report

to 320 from 250. Qualcomm soared 30 3/8, or 11.5%, to 294 3/8.

U.S. Bancorp Piper Jaffray

boosted its price target on

Radware

(RDWR) - Get Report

to 68 from 55. Radware stumbled 7 1/4, or 12.8%, to 49 1/8.

Salomon Smith Barney

sliced its rating on

Speedway Motorsports

(TRK) - Get Report

to neutral from outperform. Speedway Motorsports plummeted 17 7/16, r 37.9%, to 28 1/2.

PaineWebber upgraded shares of

Staples

(SPLS)

to buy from attractive. Despite the upgrade, Staples slipped 1/2 to 17 7/8.

Three firms cut their ratings on

Starwood Hotel and Resorts

(HOT)

after the company reported third-quarter earnings and shuffled top management. Morgan Stanley cut its rating to outperform from strong buy,

ING Barings

downgraded the stock to buy from strong buy and

Credit Lyonnais

cut its price target to 36 from 40, but maintained a buy rating. Starwood said it has merged its North American sales and global sales businesses under Bob Moore, who recently joined the company as senior vice president of sales and marketing and will now be senior vice president of global sales. Starwood Hotel climbed 1 3/8, or 6.3%, to 23 1/8.

PaineWebber rolled out coverage of

Tandy

(TAN) - Get Report

with a buy rating and a price target of 82. Tandy shares bounced 3 1/4, or 5.3%, to 64 1/4.

Robertson Stephens

upped its rating on

Varian Semiconductor

(VSEA)

to strong buy from buy. Varian Semiconductor added 2 1/8, or 8.8%, to 26 1/8.

Miscellany

Cendant

(CD)

unit

Coldwell Banker Real Estate

said it forged a deal to launch franchises in 12 European countries. The deal calls for Triomphe Partners to serve as its "master franchiser." Cendant shares skidded 1/4 to 15 3/16.

The

Nasdaq Stock Market

unveiled its plans to start a pan-European stock exchange in the fourth quarter of 2000.

The Inside Wall Street column in

Business Week

, which was penned this week by Gary Weiss, offers up a positive story on

Sherwin-Williams

(SHW) - Get Report

, citing

U.S. Trust

portfolio manager David Tillson, who's been buying shares of Sherwin-Williams, in a bet that the company will soon climb out of its current troubles. Sherwin-Williams shares stumbled 5/16 to 22 1/16.

Mattel

(MAT) - Get Report

and

Philip Morris

(MO) - Get Report

Also garnered positive mention in the column, citing value investor Andrew Bischel, president of

Spare Kaplan Bischel & Associates

, who has been buying up shares of both those beaten-up stocks. Mattel retreated 5/16 to 13 3/8, while Philip Morris slid 5/8 to 25 7/16.

Elsewhere,

JDS Uniphase

(JDSU)

popped 5 1/16 to 197 on news that it is the subject of a positive item in the column with Robert Gillam, president and chief investment officer at

McKinley Capital Management

in Anchorage, Alaska, singing the stock's praises.

Yesterday, JDS Uniphase agreed to buy

Optical Coating Laboratory

(OCLI)

.

TheStreet.com/nytimes.com

joint newsroom wrote about the deal in a story

yesterday Optical Coating climbed 2 1/8 to 170 1/16.

Sysco

(SYY) - Get Report

bounced 11/16 to 39 1/8 after it said it has tapped President Charles Cotros to become its new CEO. Cotros is replacing Bill Linding, who will continue to serve as the company's chairman. Sysco also said it will double its number of authorized common shares to total $1 billion.

TheStreet.com Inc.

(TSCM)

, publisher of this Web site, fell 2 1/16, or 11.2%, to 16 7/16 after saying chairman and CEO Kevin English has resigned effective immediately. President and COO Thomas Clarke will replace him as CEO; board member Fred Wilson, managing partner at

Flatiron Partners

, will become chairman. TheStreet.com said it remains on track to meet its financial objectives.