Market Shrugs Off Weighty Concerns and Floats Into Weekend

Ignoring the Kosovo conflict and boldly going long ahead of the jobs report, traders finished the week on the upside.
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Ignoring the conflict in Kosovo and weakness in the bond market, stock proxies rode off into the sunset of the long weekend on their high horse.

The stock market is closed tomorrow in observance of Good Friday and many traders left early to prepare for Easter or observe Passover. Meanwhile, atheists and non-Judeo-Christians enjoyed the opportunity to make a quick exit. But this was not an average pre-holiday session, as decent trading volumes indicate, thanks mainly to takeovers.

Chief among them,

BP Amoco

(BPA)

confirmed it will buy

Atlantic Richfield

(ARC) - Get Report

for $26.8 billion. The deal was widely discussed

Monday and helped the

Dow Jones Industrial Average

secure its first-ever close above 10,000 that day.

The Dow managed its first advance since that session, rising 46.35, or 0.5%, to 9832.51. The index closed nearing its early high of 9840 after spending much of the session huddled on either side of break-even.

American Express

(AXP) - Get Report

was the Dow's best performer while

Chevron

(CHV)

was its biggest drag.

Energy names in general sagged along with crude prices; BP Amoco fell 5.1% and Arco dipped 0.4%. The

American Stock Exchange Oil & Gas Index

fell 1.1% while the

Philadelphia Stock Exchange Oil Service Index

lost 4.4%.

The

S&P 500

, initially restrained by energy stocks, closed up 7.35, or 0.6%, to 1293.72, thanks largely to strength in technology, notwithstanding a profit warning

last night by

Silicon Graphics

(SGI)

, which fell 21.5%.

The

Nasdaq Composite Index

rose as high as 2502.46 and closed up 31.97, or 1.3%, to 2493.37. Strength in Net favorites, as well as traditional bellwethers

Microsoft

(MSFT) - Get Report

,

Intel

(INTC) - Get Report

, and

Sun Microsystems

(SUNW) - Get Report

, fueled the index.

Chip and equipment makers were solid performers amid speculation of a merger between

Lam Research

(LRCX) - Get Report

and

Novellus Systems

(NVLS)

, which rose 16% and 6.4%, respectively. The

Philadelphia Stock Exchange Semiconductor Index

rose 4.5%.

In Net land, confirmation that

Yahoo!

(YHOO)

will buy

broadcast.com

(BCST)

for $5.7 billion ignited shares of the participants; Yahoo! gained 6.9% and broadcast.com rose 9.9%. Additionally, broadcast.com rival

RealNetworks

(RNWK) - Get Report

soared 29%.

TheStreet.com Internet Sector

index rose 14.42, or 2.2%, to 657.43.

TheStreet.com E-Commerce Index

moved up 2.68, or 2.4%, to 116.12.

Other Net plays were initially muted, perhaps because investors were cowed by the anticipation of having to hear,

ad infinitum

, about how

CNBC's

Steve Frank

broke the Yahoo!-broadcast.com story. But Frank mercifully avoided

David Faber

-esque self-aggrandizement today, and the sector regained its footing.

To wit, the (seemingly) unstoppable force known as

America Online

(AOL)

rose 2% to 150 after falling as low as 144 1/16.

The

Russell 2000

rose 1.28, or 0.3%, to 398.74.

Not everyone was enamored with the market's performance, however.

"It's worrisome to me that people are ignoring two important issues -- the bond market

and the Kosovo situation," said Tony Dwyer, chief market strategist at

Ladenburg Thalmann

. "When you're at these higher valuation levels, without having gone through a deeper correction, the risk may be greater than your reward."

The price of the 30-year Treasury bond fell 24/32 to 93 26/32, its yield rising to 5.68%, ahead of tomorrow's March employment data. Selling was exacerbated by a surprisingly strong

National Association of Purchasing Management

report. (For more, see today's late

Bond Focus.)

Strong economic data and a

Morgan Stanley Dean Witter

upgrade of papermaker

Mead

(MEA)

, which jumped 7.5%, aided cyclical stocks.

Goodyear

(GT) - Get Report

and

3M

(MMM) - Get Report

were big Dow gainers.

Dwyer, meanwhile, remains defensive on big-cap technology -- a stance he took

Feb. 1, when the Nasdaq last reached a new high -- its gains today and of late notwithstanding.

"I think a lot of gains are end-of-quarter type gains," he said, reiterating repeatedly that he's not a bear and believes long-term fundamentals remain intact. "Since I turned negative, net-net, the Nasdaq is still down. I'm not saying that to say 'I'm still right,' but saying that to say it's a narrow market and we've failed to make new highs. I may be early,

but at current valuation levels, I'm hard-pressed to make an investment case for big-cap tech stocks.

"The indexes could rally further to new highs based on the momentum of a few stocks, but I think it be a limited rally -- under 5%, whereas I see 10% risk to the downside," he continued. "That suggests you wait for the correction and embrace it."

In

New York Stock Exchange

trading, 707.9 million shares were exchanged while gainers led losers 1,513 to 1,443. In

Nasdaq Stock Market

activity 858.6 million shares were exchanged while declining issues led 2,119 to 1,873. New 52-week lows bested new highs 92 to 29 on the Big Board and by 161 to 76 in over-the-counter trading.

Reload and Go Higher

In the day's other big deal,

CBS

(CBS) - Get Report

agreed to buy

King World Productions

(KWP)

in a stock swap valued at $2.5 billion.

"This event probably put some added interest

in broadcasters but as part of an ongoing uptrend," said Eugene Peroni, director of technical research and portfolio manager at

Janney Montgomery Scott

in Philadelphia. One of Peroni's favorites,

Clear Channel Communications

(CCU) - Get Report

, rose 3.3% to an all-time high of 69 1/4, but it's an "erratic stock" and "you can't chase it on strength," he warned.

As for the broader market, the technician said today's action was a "resumption of the market's trading range movement into higher territory."

For the time being, the technician sees the Dow trading between 9500 and 10,400. He concedes 10,000 has "presented an obstacle" but views that as "healthy."

"Having paused and retreated is a better alternative to plowing through

10,000 in a straight line," he added.

Among other indices, the

Dow Jones Transportation Average

rose 10.12, or 0.3%, to 3309.16; the

Dow Jones Utility Average

gained 2.73, or 0.9%, to 295.01; and the

American Stock Exchange Composite Index

gained 1, or 0.1%, to 711.30.

For the Dow 10,000-punctuated, holiday week, the Dow industrials rose a scant 10.27, or 0.1%; the S&P 500 gained 10.97, 0.9%; the Nasdaq Comp climbed 74.54, or 3.1%; the Russell 2000 fell 4.82, or 1.2%; TheStreet.com Internet index climbed 27.85, or 4.4%; TheStreet.com E-Commerce Index gained 4.59, or 4.1%; the Dow transports added 45.16, or 1.4%; the Dow utilities shed 4.76, or 1.6%; and the Amex Composite slid 7.44, or 1%.

Elsewhere in North American equities today, the

Toronto Stock Exchange 300

rose 27.02 to 6624.81 and the

Mexican Stock Exchange IPC Index

hopped 48.37, or 1%, to 4930.37. For the week, the TSE 300 lost 10.39, or 0.2%, and the IPC leapt 193.79, or 4.1%.

Thursday's Company Report

By Heather Moore
Staff Reporter

(

Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.

)

As noted above, broadcast.com lifted 11 11/16, or 9.9%, to 130 after Yahoo! agreed to buy it for $5.7 billion. Under terms of the deal, Yahoo! will issue 0.77 of a share for each broadcast.com share. Yahoo! expects to take a charge in the third quarter to cover acquisition expenses.

J.P. Morgan

upgraded Yahoo!, which climbed 11 9/16, or 6.9%, to 179 3/4, to buy from long-term buy and set a 12-month price target of 250 a share. Elsewhere benefiting from news of the deal were RealNetworks, which rose 35 7/16, or 29%, to an all-time high of 157 7/8;

audiohighway.com

(AHWY)

, which rose 1 11/6, or 15.3%, to 12 3/4; and

Visual Data

(VDAT)

, which rose 2 13/16, or 21.6%, to 15 13/16.

TheStreet.com

wrote about what the takeover could mean for Yahoo! in a story

last night.

BP Amoco confirmed it will buy Arco for $26.8 billion in stock, or 0.82 of a BP Amoco American depositary share for each Arco share. With the takeover, BP Amoco will gain entry to West Coast retail markets where Arco has a leading market share in five states and owns two refineries, BP Amoco said. The stocks didn't gain much on the news, as rumors of the deal nestled their way into the stocks earlier this week. BPA lost 5 3/16, or 5.1%, to 95 13/16; and Arco fell 11/16 to 72 7/16. Last night,

TSC

took a

look at what the then-potential deal might mean for

Vastar Resources

(VRI)

, which slipped 7/8 to 46 7/8.

CBS skidded 11/16 to 40 1/8 after agreeing to buy King World, distributor of

The Oprah Winfrey Show

,

Wheel of Fortune

,

Jeopardy!

and

Hollywood Squares

, in a stock swap valued at $2.5 billion. Shareholders of King World, which added 9/16 to 31 1/8, will receive 0.81 of a CBS share for each King World share. CBS said the acquisition will be immediately accretive to cash flow.

TSC

noted that the long-rumored deal probably won't do diddly to attract any new audiences to CBS.

Mergers, acquisitions and joint ventures

Bell Atlantic

(BEL)

surged 1/16 to 51 3/4 after Virginia regulators dismissed a merger petition from the company and

GTE

(GTE) - Get Report

, which Bell plans to buy for $53 billion, and asked for more information on the deal. GTE tacked on 1/4 to 60 3/4.

USX-US Steel Group

(X) - Get Report

hopped up 11/16 to 24 3/16 after last night saying it disposed of its 5.5 million-share stake in

RTI International Metals

(RTI)

and that it will record a first-quarter charge of $14 million due to the transaction. RTI International dropped 5/8, or 6.3%, to 9 3/8.

Earnings/revenue reports and previews

Antec

(ANTC)

climbed 3 1/8, or 14.5%, to 24 3/4 after

last night saying it's comfortable with the nine-analyst estimate calling for first-quarter earnings of 13 cents a share vs. the year-ago loss of 14 cents. The company also said it completed the combination of

Arris Interactive

, its venture with

Nortel Networks

(NT)

, with Nortel's broadband technology unit.

Balance Bar

(BBAR) - Get Report

plunged 2 3/4, or 29%, to an all-time low of 6 3/4 after last night warning it sees first-quarter earnings of 5 cents to 6 cents a share due to greater-than-expected seasonality in the sale of energy bars. The four-analyst outlook called for 12 cents vs. the year-ago 11 cents.

Biosite Diagnostics

(BSTE)

picked up 3/16 to 10 1/4 after last night saying it expects first-quarter gross margins to be within the range of 55% to 62%, which is less than expected, due to inefficiencies in production of its Triage Cardiac System. The five-analyst forecast calls for a quarter loss of 3 cents a share vs. the year-ago loss of 4 cents. The company also said it will take a $972,000 charge in the fourth quarter that just passed to cover a patent lawsuit settlement.

Documentum

(DCTM)

tanked 7 1/4, or 41.7%, to an all-time low of 10 1/8 after saying it expects to post a "significant" first-quarter loss due to an industry slowdown in customer license sales for enterprise software applications. The nine-analyst forecast called for earnings of 14 cents a share vs. the year-ago profit of 3 cents.

Hie

(HDIE)

skidded 31/32, or 23%, to 3 5/16 after last night saying it sees a first-quarter loss of 5 cents to 7 cents a share due to a shortfall at its health-care software business. The two-analyst view called for earnings of 2 cents vs. the year-ago loss of 2 cents.

Ireland's

Iona Technologies

(IONA)

halved, falling 15 1/4 to 14 15/16, after saying it sees first-quarter results as low as a loss of 3 cents a share. The five-analyst prediction called for earnings of 18 cents vs. the year-ago profit of 10 cents.

Lone Star Steakhouse

(STAR) - Get Report

swelled 1 1/8, or 11%, to 11 3/8 after reporting first-quarter earnings of 21 cents a share, 6 cents higher than the six-analyst estimate but a penny behind the year-ago 22 cents.

Miller Exploration

(MEXP)

plummeted 2 5/16, or 75.5%, to an all-time low of 3/4 after last night saying it will record a 1998 write-down of $35 million due to depressed commodity prices and that it's in talks about a potential recapitalization. Today,

Raymond James

dropped the stock to underperform from buy.

NovaCare

(NOV) - Get Report

shed 9/16, or 32.1%, to 1 3/16 after last night saying it sees its third-quarter loss coming in three times wider -- ouch! -- than the five-analyst estimate of a 9-cent loss. The company cited continued weakness in its long-term care services business, due to a decline in rehabilitation caseload at long-term facilities, and contract cancellations. NovaCare earned 20 cents in the year-ago period.

1-800 Contacts

(CTAC) - Get Report

soared 6 7/8, or 64%, to 17 3/4 after last night saying revenue from Internet sales will push its first-quarter results above previous estimates. The company now expects a break-even quarter or a profit. The two-analyst view called for a loss of 12 cents vs. the year-ago profit of 8 cents.

Recovery Engineering

(REIN)

vaulted 1 5/8, or 17.3%, to 11 after last night saying it expects first-quarter earnings to top the two-analyst outlook for a loss of 9 cents a share thanks to strong demand. The company lost 23 cents in the year-ago period.

Secure Computing

(SCUR)

collapsed 5 3/4, or 49.7%, to an annual low of 5 7/8 after last night saying it expects to report a first-quarter loss of 30 cents a share because of lower revenue. The seven-analyst prediction called for earnings of 10 cents vs. the year-ago loss of 46 cents. Today,

PaineWebber

cut the stock to neutral from buy.

Silicon Graphics tumbled 3 9/16, or 21.5%, to 13 after last night warning of a third-quarter loss 20 cents to 25 cents a share wider than the 14-analyst forecast for a loss of 7 cents. The company, which blamed transition in its principal product lines for the news, lost 36 cents in the year-ago period.

ThrustMaster

(TMSR) - Get Report

jumped 1 7/16, or 9.7%, to 16 1/4 after saying it sees a first-quarter loss of 3 cents to 7 cents a share, narrower than expected. The single-analyst view called for a loss of 10 cents vs. the year-ago loss of 29 cents.

Offerings and stock actions

Trendwest Resorts

(TWRI)

rung in 1 5/16, or 9.3%, to 15 7/16 after setting a buyback program of up to 500,000 shares.

Analyst actions

Ameritech

(AIT) - Get Report

rose 2 5/8 to 60 1/4 and

SBC Communications

(SBC)

rose 2 9/16, or 5.4%, to 49 3/4 after

Lehman Brothers

raised the merger partners to buy. Ameritech had been rated an outperform, SBC a neutral.

Apex Mortgage

(AXM)

sliced off 1, or 7.4%, to 12 1/2 after PaineWebber lowered it to attractive from buy.

Brigham Exploration

(BEXP)

shaved off 7/8, or 33.3%, to an all-time low of 1 7/8 after

Bear Stearns

cut it to neutral from buy.

Cal Dive

(CDIS)

flourished 2 3/16, or 10.7%, to 22 3/4 after Morgan Stanley Dean Witter raised it to strong buy from outperform.

Cumulus Media

(CMLS) - Get Report

surged 1 9/16, or 13.5%, to 13 1/4 after Morgan Stanley Dean Witter initiated coverage with a strong buy.

Doral Financial

(DORL)

gave up 1, or 5.4%, to 17 3/8 after

BT Alex. Brown

started coverage with a buy.

Lam Research shot up 4 5/8, or 16%, to 33 13/16 after

Merrill Lynch

issued a report saying the company might merge with Novellus Systems. Novellus tacked on 3 1/2, or 6.4%, to 58 5/8.

Mead excelled 2 5/16, or 7.5%, to 33 1/16 after Morgan Stanley Dean Witter lifted it to strong buy from outperform.

Rare Hospitality

(RARE) - Get Report

advanced 1 1/16, or 7.8%, to 14 13/16 after Raymond James upped it to buy from neutral.

Unisys

(UIS) - Get Report

climbed 2 1/8, or 7.7%, to 29 13/16 after

Salomon Smith Barney

pushed up the stock to buy from outperform.

Miscellany

BioTime

(BTIM)

vaulted 1 1/4, or 7.8%, to 17 1/2 after receiving approval from the

Food and Drug Administration

to market its new blood plasma volume expander used to treat blood loss during surgery.

Vencor

(VC) - Get Report

crumbled down 3/8, or 28.6%, to 15/16 after last night saying its annual report to the

Securities and Exchange Commission

will be delayed because it's revaluing long-lived assets after significant operating losses in the fourth quarter and lower expectations of future operating results and cash flows.

Similarly,

Western Resources

(WR)

fell 1 3/16 to an annual low of 25 1/2 after filing for a 15-day extension for its 1998 annual report due to a delay announced by its 85% owned subsidiary

Protection One

(POI)

. Protection One plunged 2 1/4, or 36%, to an all-time low of 4.