Publish date:

Market Romps in Gap Between Fed Decision and Jobs Data

Traders are abandoning their caution, at least for a day, as major indices gain ground ahead of Friday's employment news.

Stocks enjoyed a solid bounce as the market digested the


decision to leave rates alone for the time being but adopt a tightening bias. Traders decided there was just enough free time for a little play before Friday's

employment report

and the next batch of earnings.

Led by financial and technology stocks, major proxies were trending steadily higher. The

Dow Jones Industrial Average

was up 118, or 1.1%, to 10,518, while the tech-heavy

Nasdaq Composite Index

was up 52, or 1.8%, to 2852. Internet Sector

index was also enjoying a pop thanks to


(EBAY) - Get Report

, up 5.7% after a hand from

Lehman Brothers

, which started the stock at a buy.

The bond market was rebounding nicely after yesterday's nasty selloff, deciding that, after all, a bias does not a rate hike make. The benchmark 30-year Treasury was up 5/32 to 99 14/32, its yield easing to 6.17%. (For more on the fixed-income market, see today's early

Bond Focus.)

"After the initial shock, people pretty much saw that the writing was already on the wall," said Ross Kopfer, vice president of trading at

Robert W. Baird

. All the action and the selloff had been an anticipation of the Fed news, he said.

Recently battered financial stocks were getting a rest. The

Philadelphia Stock Exchange/KBW Bank Index

looked healthier and happier than it has in the past week, up 1.9%, with help from

J.P. Morgan

(JPM) - Get Report

, up 2.5%, and


(C) - Get Report

, up 2.6%.

Despite the short-term jump, overall expectations remain low that the market will soon bounce outside the trading range its been stuck in for the last few weeks. "I don't think anything has changed. We seem to hit a bit of a ceiling around 10,500 on the Dow," said Brian Belski, chief investment strategist at

George K. Baum

in Kansas City, Mo. "We're not seeing the type of broader participation that is evident on the upswing."

Earnings will dominate the landscape for the next couple of weeks, predicted Belski, with various strong reports providing a periodic jostle higher, but he expects more volatility with a bias to the downside in the near term. His fourth-quarter outlook is brighter, however, particularly where tech and financials are concerned.

On the

New York Stock Exchange

advancers were leading decliners 1,614 to 1,209 on 502 million shares, while on the

Nasdaq Stock Market

, leaders were beating laggards 1,953 to 1,680 on 642 million shares. New 52-week lows were outpacing new highs 95 to 36 on the Big Board, while new highs were leading new lows 92 to 74 on the Nasdaq.


Russell 2000

was up 3 to 429, while the

S&P 500

was up 19, or 0.4%, to 1320.

Wednesday's Midday Watchlist

By Tara Murphy
Staff Reporter


Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.


Leo Hindery

, head of Internet initiatives at


(T) - Get Report

, is departing from the company to pursue other interests. The long-distance behemoth said plans to launch new broadband services, including cable telephony pilots in eight cities by year's end, nonetheless remain on target. AT&T said CFO Daniel Somers would fill Hindery's post until a permanent replacement is found. Shares of AT&T were up 1 to 46.

Separately, AT&T and

Dobson Communications

, through a joint venture, are buying

American Cellular

for $2.32 billion.

In addition, AT&T and


(IBM) - Get Report

said they were teaming up to create e-business solutions for small and midsize businesses. Shares of IBM were slipping 1 1/16 to 120 15/16.

Mergers, acquisitions and joint ventures


(AR) - Get Report

was up 13/16 to 27 9/16 after it accepted a juicier $1.12 billion buyout offer from

Phelps Dodge

(PD) - Get Report

, which was off 1 11/16 to 51 7/8. Phelps Dodge reached a pact last week to acquire

Cyprus Amax Minerals




(CVS) - Get Report

, which was hopping 4 7/8, or 12.9%, to 41 15/16, and


(MRK) - Get Report

pharmacy benefits division,


, set a pact between their Internet sites. Shares of Merck were mounting 1 7/8 to 72.


(MSFT) - Get Report

, which was climbing 1 1/4 to 99 1/8, along with

British Telecommunications


, which was bouncing 4 to 158 1/2, unveiled plans to launch wireless Internet service, starting with a three-month test run involving 1,000 mobile-phone users. The test will enable employees from five major corporations, including the



Credit Suisse First Boston


Nortel Networks


, to use their phones to check their email and other content on the Internet that can be adapted to fit a small mobile-phone screen. If all goes as planned, the companies will offer the service in early 2000.

Although German insurer


buyout talks with

Pimco Advisors Holdings


have reached an advanced stage, the negotiations could still fail,


reported, citing a source familiar with details of the talks. Pimco was adding 2 11/16, or 8.2%, to 35 7/16.

Earnings/revenue reports and previews


(AA) - Get Report

was sliding 3 5/8, or 5.5%, to 60 9/16 after it reported third-quarter earnings of 69 cents a share, in line with the 16-analyst estimate of 69 cents and the year-ago 61 cents.


(PEP) - Get Report

was mounting 1 3/16 to 32 9/16 after it posted third-quarter pro forma earnings of 34 cents a share, a penny ahead of the 16-analyst estimate but down from the year-ago 37 cents.

Structural Dynamics Research


was falling 2 7/8, or 18.5%, to 12 5/8 after it warned third-quarter revenue will be about $109 million, less than the current analysts' consensus estimate of $116 million. The company said earnings, not including nonrecurring, acquisition-related charges, will come in around 12 cents a share, well below the six-analyst estimate of 30 cents.

Tenet Healthcare

(THC) - Get Report

was skidding 1/16 to 19 11/16 after it posted first-quarter earnings of 39 cents a share, beating the 16-analyst estimate of 38 cents and the year-ago 44 cents. The company also said that it has inked a deal to sell 10 hospitals.


(WIN) - Get Report

was declining 1/16 to 29 5/8 after it reported first-quarter earnings of 15 cents a share, greatly missing the six-analyst estimate of 23 cents but up from the year-ago 10 cents.

Offerings and stock actions

(BOUT) - Get Report

was stumbling 3 1/8, or 5.25, to 57 5/16 after it said it had filed with the

Securites and Exchange Commission

TheStreet Recommends

for a 3.5 million-share offering.



was climbing 1 1/2 to 35 1/2 after it said it set a $1 billion share repurchasing program.

Analyst actions


(CIEN) - Get Report

was bouncing 2 1/8, or 6.1%, to 36 7/8 after

Warburg Dillon Read

raised its rating on the shares to buy from hold.

Computer Sciences


was jumping 2 15/16 to 63 1/2 after

Donaldson Lufkin & Jenrette

upped its rating on the stock to buy from market perform. CS First Boston also raised the shares to a buy from a hold.

DTE Energy

(DTE) - Get Report

was declining 3/16 to 33 after

ABN Amro

upgraded shares of the stock to buy from outperform.

DuPont Photomasks


was up 5/16 to 49 3/16 after

CIBC World Markets

rolled out coverage of the stock with a strong buy rating.


(EBAY) - Get Report

was soaring 8 1/2, or 5.9%, to 149 11/16 after

Lehman Brothers

initiated coverage of the stock with a buy.

Florida Rock


was sliding 5/16 to 33 3/16 after Warburg Dillon Read started coverage of the shares with a hold rating.



was leaping 7 3/4, or 23.95, to 40 13/16 after


upped its rating on the shares to buy from attractive.

Merrill Lynch

also raised its rating on the shares to an intermediate buy from accumulate, while First Boston cut the stock to a buy from a strong buy.


(HAL) - Get Report

was advancing 1 1/8 to 35 5/8 after Warburg Dillon Read upped its rating on the shares to a strong buy, while Credit Suisse First Boston raised the shares to a buy from hold.



was falling 1 11/16, or 6%, to 26 1/16 after

Morgan Stanley Dean Witter

lowered its rating on the shares to outperform from strong buy.

Jones Pharma


was climbing 3/16 to 33 while



was off 1/16 to 4 11/16 after Warburg Dillon Read initiated coverage of the stocks with buy ratings.

Salomon Smith Barney

raised its fourth quarter and fiscal 1999 estimates on



to 80 cents from 70 cents a share and $2.41 to $2.31 per share respectively. The firm also upped it fiscal 2000 estimate to $3.25 from $2.75 a share. Lexmark shares were jumping 4 15/16, or 5%, to 101 13/16.

Martin Marietta

(MLM) - Get Report

was mounting 13/16 to 40 11/16 after Warburg Dillon Read initiated coverage of the stock with a strong buy rating.



was slipping 15/16 to 76 3/16 after CIBC World Markets cut its rating on the shares to a buy from a strong buy.

Public Storage

(PSA) - Get Report

was decling 1/16 to 24 11/16 after PaineWebber sliced its rating on the shares to attractive from buy.

Quintiles Transnational


was climbing 1/16 to 17 7/16 after Warburg Dillon Read cut its rating on the stock to hold from strong buy.



was slipping 5/8, or 5%, to 11 5/8 after

Goldman Sachs

lowered its rating on the stock to market performer from market outperformer.


was popping 3 7/8, or 6.5%, to 62 3/4 after

Deutsche Banc Alex. Brown

lowered its rating on the shares to market perform from market out perform

Sunrise Assisted Living


was plummeting 11 11/16, or 47.75, to 12 7/8 after PaineWebber lowered its rating on the shares to neutral from buy.

J.P. Morgan

also downgraded the shares to market perform from a buy, while DLJ and Merrill Lynch also cut the shares.


(VRTS) - Get Report

was unchanged at 85, while



was climbing 2 9/16, or 5.6%, to 47 7/8, after Merrill Lynch initiated coverage of the stocks with near-term accumulate ratings.

Vulcan Materials

(VMC) - Get Report

was up 15/16 to 36 13/16 after Warburg Dillon Read rolled out coverage of the shares with a buy rating.




was hopping 1 7/16 to 51 15/16 after its Chairman and CEO Richard Huber said industry leaders and corporate customers will meet to discuss an approach to handling HMO lawsuits,

The Wall Street Journal


America Online


was jumping 4 3/8 to 117 15/16 after it said it would create a custom AOL message service for



. Lycos shares were mounting 4 13/16, or 8.4%, to 61 9/16.

General Motors

(GM) - Get Report

was up 1/8 to 65 1/2 after its Vice Chairman Harry Pearce refuted analysts reports that the company has plans to break off its

Hughes Electronics


division in the near future, the




(QCOM) - Get Report

was up 11 1/8, or 5.7%, to 205 15/16 on word of regulatory approvals on four continents for its satellite phones.


(WMT) - Get Report

was down 1/16 to 51 1/16 after it announced plans to launch the Wal-Mart credit card, which will be administered through

GE Capital

, in September.