SAN FRANCISCO -- A stronger-than-expected July
produced somewhat unexpected results on Wall Street today. The final result was pretty predictable as major equities finished another rough week on a down note. But while bonds plummeted in the wake of the job data, which confirmed to most that additional
rate tightening is unavoidable, selling in equities was not nearly so harsh.
The price of the 30-year Treasury bond fell 1 6/32 to 87 26/32, its yield rising to 6.15% as some bearish players speculated the central bank might consider a 50 basis point rate hike at its Aug. 24 meeting.
Before the market opened, the
reported nonfarm payrolls grew by 310,000 in July and average hourly earnings rose 0.5%, both in excess of expectations. (The unemployment rate was unchanged at 4.3%, as expected.) Nonetheless, stock proxies opened higher. But that proved to be the mother of all head fakes (unless you consider
"This is an unpleasant market," said Doug Myers, vice president of equity trading at
in Atlanta. "That's what Southerners used to say about the Civil War. They called it 'the recent unpleasantness.'"
Dow Jones Industrial Average
rose as high as 10,818.20 around 10 a.m. EDT in its initial defiance of the employment report. But the blue chip proxy tumbled soon thereafter, trading as low as 10,653.25 before closing off 79.79, or 0.7%, to 10,714.03. The index is now 4.4% off its all-time high of 11,209.84, set
followed a similar path, closing down 13.42, or 1%, to 1300.29 after trading as high as 1316.74 and as low as 1293.19. The index is down 8.4% from its July 16 record. The
fell 1.71, or 0.4%, to 428.04.
Among tech gauges,
TheStreet.com Internet Sector
index regurgitated about two-thirds of yesterday's bounce, falling 15.16, or 3%, to 498.49. The
Nasdaq Composite Index
continued its correction, falling 17.86, or 0.7%, to 2547.97, climbing off its session low of 2535.63 but ending far from its early best of 2592.33.
Among individual tech names,
found itself in the unwanted spotlight, falling 10.5% after experiencing another site outage.
rose 12.3% and
gained 10.3% after
signed distribution and co-branding agreements for its instant messaging software with the Internet service providers. AOL rose 0.9%.
Although some market players expressed pleasant surprise that losses weren't worse, Myers found it hard to be optimistic.
"All the stocks are grinding down," he said. "And when they grind down 1, 3, 9 points at a time it really hurts."
That view was reflected in market internals, which sagged again.
New York Stock Exchange
trading, 698.9 million shares were exchanged while declining stocks led advancers 1,969 to 966. In
Nasdaq Stock Market
action 817.2 million shares traded while losers led 2,178 to 1,694. New 52-week lows bested new highs 192 to 41 on the Big Board and by 89 to 35 in over-the-counter trading.
August (24th) and Everything (After)
However, "the market did put up a pretty good showing," countered Jim Volk, co-director of institutional trading at
in Portland, Ore. "I think the economic numbers are another excuse to continue to correct the market to levels where people feel more comfortable. Add to that the summer doldrums in a market that's already correcting and that's why you got more. But there was no panic today, obviously."
Volk noted there was some "bargain hunting" in big names such as
, which rose 2%. Moreover, there was out-and-out strength in chip names such as
due to reports of strongly rising DRAM prices. Micron gained 7.3% today, leading the
Philadelphia Stock Exchange Semiconductor Index
The "reason the
broader market continued to act poorly is not because they expect the Fed to increase rates," the trader continued. Today's data are "another reason for them to go for a third hike, which is really spooking people. People are looking ahead" to the Fed's meeting Oct. 5.
Rao Chalasani, chief investment strategist at
in Chicago, is one who is looking ahead to that October meeting, but for reasons that put him in a distinct minority on Wall Street.
"I don't believe the Fed is going to do anything in August," he said. "I think they'll tighten in October. My feeling is now that the long bond yield is above 6%, the bond market is doing the job for the Federal Reserve. There's no reason for the Fed to move until October."
Still, Chalasani does not believe the stock market will be able to make much forward progress.
"On a short-term basis I believe the movement of the stock market is no longer on the upside," he said, showing a flair for the obvious. "Net-net, with the threat of the Fed moving in August or October, the market will be slow to move on the upside even though it doesn't seem to have a lot of downward momentum."
Among other indices, the
Dow Jones Transportation Average
fell 63.13, or 1.9%, to 3220.03; the
Dow Jones Utility Average
gained 0.66, or 0.2%, to 318.38; and the
American Stock Exchange Composite Index
managed to rise 1.83, or 0.2%, to 777.92.
For the week, the Dow industrials added 58.88, or 0.6%; the S&P 500 shed 28.43, or 2.1%; the Comp surrendered 90.52, or 3.4%; the Russell 2000 fell 16.73, or 3.8%; while the DOT plunged 57.60, or 10.4%. Additionally, the Dow transports tumbled 113.21, or 3.4%; the Dow utilities rose 3.72, or 1.2%; and the Amex Composite fell 10.31, or 1.3%.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
fell 27.75, to 6878.80 and the
Mexican Stock Exchange IPC Index
lost 121.13, or 2.35% to 5029.66. For the week, the TSE fell 202.23, or 2.9% and the IPC shed 230.69, or 4.4%.
Friday's Company Report
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.
American Home Products
dropped 6 1/16, or 11.9%, to 44 7/8 after a jury awarded a heavy $23 million to a Texas woman who said the diet-drug combination fen-phen had caused her heart valve damage. The company said it would appeal the verdict.
Mergers, acquisitions and joint ventures
took the unusual step of publicly denying rumors it is acquiring
Oxford Health Plans
, citing extremely ominous-sounding reasons like "some online stuff," and "rumors in the marketplace." The company also announced it completed its $1 billion acquisition of
. Shares of Aetna fell 2 7/8 to 81 9/16 while shares of Oxford edged up 1/4 to 16 1/2.
America Online gained 11/16 to 84 5/8 after it signed distribution and co-branding agreements for its instant messaging software with Internet service providers EarthLink and MindSpring. EarthLink ascended 4 9/16, or 12.3%, to 41 9/16 on the news, while MindSpring hopped up 2 11/16, or 10.3%, to 28 13/16.
added 3/8 to 95 13/16 after the company said it was in talks with
and four West African countries to build a pipeline to supply Nigerian gas to the region.
Century South Banks
inched up 7/8 to 22 1/4 after it said it would acquire
in a $26.7 million stock deal. Haywood jumped 5 3/16, or 36.3%, on the news.
slipped 11/16 to 40 1/16 after it confirmed plans to buy U.K. mobile telephone firm
Cable & Wireless
for about $11.2 billion. Telekom will also assume about $2.4 billion in One2One debt. Cable & Wireless rose 1 5/16 to 36 15/16, but MediaOne lost 1/8 to 70 5/8.
, the parent company of
, lost 5/8 to 42 7/16 after it agreed to acquire the assets of privately held
Air Services unit for $116 million.
a bank processing service, added 2 1/8, or 9.9%, to 23 7/8 after agreeing to buy rival
to beef up its Internet banking service.
added 1/4 to 81 11/16 after the company said it was in talks to sell its
unit, which makes mobile phone battery chargers, as part of its plan to focus on core telecommunications and Internet technologies.
added 5/8 to 23 after last night posting a narrower-than-expected second-quarter loss. The company said it lost 45 cents a share for the quarter, 2 cents thinner than the five-analyst consensus.
American depository receipts of Swedish truckmaker
climbed 7 3/16, or 23.8% after rival
made a bid to acquire the 78.4% of the company it doesn't already own. Volvo -- which was down 2 9/16, or 8.5%, to 27 1/2,on the news -- is offering nearly $39 (315 kronor) in cash for each Scania share or a stock swap of six new Volvo shares for every five Scania shares.
, Scania's controlling shareholder, has agreed to sell its stake.
Earnings/revenue reports and previews
lost 1/16 to 30 9/16 after reporting third-quarter earnings of 14 cents a share, surpassing the lone-analyst estimate of 4 cents.
lost 1 9/16 to 51 7/8 despite posting fourth-quarter earnings of 60 cents a share last night, 3 cents above the 19-analyst estimate and up from the year-ago 54 cents.
raised the stock to buy from neutral today, and the company said it expects higher profits in 2000, but that wasn't helping matters any.
ADRs of U.K. cable firm
fell 2 7/8, or 7%, to 38 5/8 after the company said yesterday that its second-quarter loss had widened 56% because of higher accounting charges and interest payments for acquisitions. Telewest said it expects its losses to peak early next year as it launches its high-speed Internet and multimedia services
jumped 4 5/8, or 18.8%, to 27 5/16 after the company said last night that it had received an unsolicited merger offer and retained
Donaldson Lufkin & Jenrette
to help it consider its alternatives. The news came as Terra Nova reported lower-than-expected second-quarter earnings of 68 cents a share, worse than the four-analyst estimate of 71 cents and a penny less than the year-ago 69 cents. The company also said last night that it is in the final stage of talks to acquire a U.S. company.
dual ADRs fell in New York even after the company posted an 8% rise in second-quarter pretax profit. Unilever is a joint venture of the Netherlands'
and the U.K.'s
-- the Dutch ADRs were down 2 to 72, while the British ones lost 1 9/16 to 38 3/4.
Credit Suisse First Boston
reiterated its hold rating on Unilever today.
Offerings and stock actions
lost 1/8 to 11 15/16 in its first day of trading, having been priced last night at $12 a share by lead underwriter
E-commerce investment group
jumped 5 7/8, or 24.1%, to 30 5/16 on the day after its trading debut.
said it plans to raise $115 million in an IPO.
Morgan Stanley Dean Witter
Dain Rauscher Wessels
will underwrite the offering.
Diversified holding company
gained 1 1/2, to 72 1/2 after
raised it to near-term buy from neutral.
Natural gas and electricity company
slipped 3/16 to 18 7/16 after
Deutsche Banc Alex. Brown
cut it to market perform from buy.
shaved off 1 7/16 to 126 5/16 after
raised it to its recommended list from market outperformer. The upgrade comes at a time when Yahoo! is trading at about a 45% discount to its 12-month intraday high of 244, set back on April 6.
an online health service and unit of
alleging breach of contract and copyright and trademark infringement. Shares of A.D.A.M. lost 9/16 to 15 1/4 while shares of drkoop fell 1 7/16, or 8.4%, to 15 3/4.
was hit 6 1/2, or 17.8%, to 30 after it said it will recall its Rotablator RotaLink Advancer and RotaLink Plus rotational atherectomy systems, which, when they work, open constricted blood vessels by drilling away plaque from the vessel walls. Boston Scientific has sold about $60 million worth of those two products in the first half of this year.
fell 1 1/2 after the company said it would realign its units to form an investment management and private banking arm.
Decking products maker
was banging a gong this morning ahead of its earnings report on Monday. Trex lately rose 1 13/16, or 7.8%, to 25 3/4.
Eric Gillin and senior writer
Justin Lahart contributed to this story.