Market Regroups With Milestone Day in the Rearview

The Dow is modestly lower on Coke's weakness, while techs and small-caps trade a bit higher.
Publish date:

Now that


over, the

Dow Jones Industrial Average

has seen fit to retreat today, as life in the stock market gets back to what sort of passes as normal on Wall Street.

The "that," of course, is the Dow closing above

10,000. No more hats flying after the closing bell on the Big Board, and no more Dow 10,000 specials.

The Dow lately was down 48, or 0.5%, to 9958, led on the downside by


(KO) - Get Report

, which shared some bad news with the Street yesterday.

Jim Herrick, managing director of trading at

Robert W. Baird

in Milwaukee, said Coca-Cola's announcement -- the company in part said yesterday it expects worldwide sales to fall up to 2% in the first quarter -- particularly hurt consumer nondurables and the news put a little drag on the market.

But Herrick said the market is fairly resilient today despite blue-chip Coca-Cola's sales announcement.

The Dow fell about 132 points in its first 15 minutes before bouncing off its intraday bottom.

Even without multinational titan Coca-Cola, the venerable gauge would still be in the red, a surprise to few after the Dow

yesterday closed up 184.54, or 1.9%, to 10,006.78.

Tim Hayes, senior equity strategist at

Ned Davis Research

in Nokomis, Fla., said after yesterday's run and close above 10,000 it is to be expected that the market would pull back today.

While both the Dow and the

S&P 500

were still under water, the

Nasdaq Composite Index

and the small-cap

Russell 2000

shook off some early weakness and managed to climb into positive territory at midsession.

The S&P 500 was down 4, or 0.3%, to 1307.

The Nasdaq Comp was up 5 to 2498. Tech bellwethers


(CSCO) - Get Report



(INTC) - Get Report



(MSFT) - Get Report



(DELL) - Get Report

helped the Comp's cause. Dell was most active on the

Nasdaq Stock Market

, with 21.1 million shares changing hands.

Among some tech gauges, the

Philadelphia Stock Exchange Semiconductor Index

rose 0.6%, while the

Nasdaq 100

gained 0.2%. The Nasdaq 100 has hit an all-time intraday high today, peaking at 2158.30. Elsewhere, the

Morgan Stanley High-Tech 35

has added 0.8%.

The Russell 2000 was up a fraction to 400.

Net stocks were mixed. Internet Sector

index tacked on 5, or 0.8%, to 659, while E-Commerce Index

has surrendered 1, or 1.2%, to 111.

Selected Net stocks soared.




(AMZN) - Get Report

and the granddaddy of cyberspace,

America Online


, all gained sharply. AOL was also most active on the

New York Stock Exchange

, with 21.6 million shares changing hands.

Transportation stocks were sharply higher. The

Dow Jones Transportation Average

was up 2.2%.

As for the Treasury market, the 30-year Treasury bond was up 16/32 to 94 27/32, yielding 5.61%. (For more on the fixed-income market, see today's early

Bond Focus.)

Meanwhile, the

Federal Open Market Committee

is meeting in Washington. The FOMC is widely expected to stand pat on rates.

While Dow 10,000 was wonderful and all that, and many reveled in the day, some aren't basking in the afterglow of the milestone because, well, frankly, they think there's too much to worry about.

"I'm not very confident" about the market, said Hayes.

He said his upside target for most of this year is 10,200 on the Dow. "I don't see anything to change that," he said.

He noted that the market got a little oversold on a short-term basis and that aided the Dow's move through 10,000.

Hayes said the No. 1 negative for the market now is the ratio of the bond yield to the earnings yield on the S&P 500, with the bond yield twice as high as the earnings yield, meaning stocks overall are overvalued. "Very rarely do you get to that point," he said.

His asset allocation model is now 45% stocks, 35% bonds and 20% cash. The allocation has been that way since March 5, he said.

As for the rest of the week, Herrick expects more window-dressing which will end tomorrow, the last day of the month.

Quarter-end window-dressing by portfolio managers has helped lift the market lately as money managers poured money into winning stocks to be fully invested.

Herrick also noted he's expecting light volume overall on Thursday ahead of the long weekend. The stock market will be closed for Good Friday.

Oil stocks retreated after yesterday's

BP Amoco



Atlantic Richfield

(ARC) - Get Report

merger talk induced rally. The

American Stock Exchange Oil & Gas Index

was down 1.1%. BP Amoco was off 1 9/16 to 103 7/16, while Arco slumped 1 to 73 1/16.

On the Big Board, decliners were beating advancers 1,580 to 1,203 on 401 million shares. On the Nasdaq Stock Market losers were beating winners 2,028 to 1,601 on 497 million shares.

On the NYSE, 67 issues had set new 52-week lows while 31 had touched new highs. On the Nasdaq, 66 issues had set new lows while new highs totaled 63.

Meanwhile, among other indices, the

Dow Jones Utility Average

was down 1.7%. The

American Stock Exchange Composite Index

was down 0.4%.

Tuesday's Midday Movers

By Heather Moore
Staff Reporter

Coca-Cola was off 1 15/16 to 62 7/8 after last night saying it expects worldwide sales to drop up to 2% in the first quarter and that it doesn't expect to meet its 7% to 8% annual volume growth target in 1999. The company blamed weak customer demand in Latin America and increased volatility in Russia. Today,

Morgan Stanley Dean Witter

lowered its 1999 earnings estimate for Coke to $1.39 from $1.45 a share and its 2000 view to $1.58 from $1.64 a share.

Lehman Brothers

cut its 1999 estimate to $1.45 from $1.50 and its 2000 figure to $1.65 from $1.75.

Goldman Sachs

dropped the stock from its recommended list, rating it a market performer.

Tomorrow is the last day of the quarter, so what better for a money manager to do than bulk up on the best buys (and sells) of the last three months? Not surprisingly, Internet stocks were among those most helped by such window dressing. The "safe" Internet stock, AOL, was up 12 3/4, or 9.7%, to 145 1/16 after


reiterated its buy and upped its 12-month price target to 215 from 125 a share. Newly issued


was up 11 11/16, or 18.3%, to 75 1/2., which launched its online auction site today, was up 9 1/16, or 6.1%, to 158 3/4. And



was up 6 15/16 to 183.


started trading around 12:30 p.m., and what a start it was. The stock, which Morgan Stanley Dean Witter last night priced above range at $16 a share, opened at 81 and lately was up 66, or 412%, to 82. In

stories last week,

questioned the treatment of the offering on the company's Web site.

In other news:

AboveNet Communications was up 25 3/4, or 32%, to 106 3/4 after setting a 2-for-1 stock split.

Avid Technology

(AVID) - Get Report

was down 5 13/16, or 25.3%, to 17 1/4 after

Prudential Securities

downgraded it to hold from accumulate.

Binks Sames


was up 2 3/8, or 14.7%, to 18 1/2 after last night saying it has received unsolicited inquiries from parties interested in acquiring part or all of the company.

Central European Media Enterprises

(CETV) - Get Report

doubled, up 4 5/16 to 12 3/4, after last night

SBS Broadcasting System


agreed to acquire the company in a $615 million deal. SBS Broadcasting was up 1/8 to 31 1/8.

Prodigy Communications


was up 2 5/8, or 7.1%, to 39 3/4 after

BancBoston Robertson Stephens

initiated coverage at buy. BancBoston was an underwriter on Prodigy's IPO in February.



was up 6 1/2, or 10.2%, to 70 9/16 after last night announcing it will acquire


, an Internet consulting firm, in a stock transaction valued at $50.6 million.

Earnings/revenue movers

Cyberian Outpost


was down 1 9/16, or 7.2%, to 20 1/16 after last night reporting a fourth-quarter loss of 34 cents a share, a nickel narrower than the three-analyst forecast and narrower than the year-ago loss of 48 cents.



was down 2 1/8, or 6.7%, to 29 9/16 after last night saying it expects third-quarter earnings of 50 cents to 54 cents a share because of the slowdown in Asia and Latin America. The six-analyst projection called for earnings of 60 cents vs. the year-ago 75 cents.



was up 3 15/16, or 9.5%, to 45 1/2 after posting first-quarter earnings of 67 cents a share, beating the four-analyst consensus by 3 cents and moving up from the year-ago 64 cents.



was down 1 13/16, or 11.8%, to 13 1/2 after saying it sees first-quarter earnings of 4 cents and 8 cents a share because of higher labor costs and a squeeze on its margins. The single-analyst view called for a repeat of the year-ago profit of 30 cents.


(ICLR) - Get Report

halved, down 14 1/4 to 12 1/8, after warning that for year ending May 31 its earnings will rise more than 30%, which is short of the 40% growth expected by analysts. The company also reported third-quarter earnings of 19 cents a share, beating the four-analyst estimate by a penny and moving up from the year-ago 13 cents.

USA Floral Products


was down 5 3/16, or 47.7%, to 5 3/4 after last night saying it sees first-quarter earnings of 21 cents to 24 cents a share due to weak Valentine's Day sales and the euro. The six-analyst forecast called for 47 cents vs. the year-ago 31 cents.