Skip to main content's MIDDAY UPDATE

February 18, 2000

Market Data as of 2/18/00, 1:12 PM ET:

o Dow Jones Industrial Average: 10,343.62 down 170.95, -1.63%

o Nasdaq Composite Index: 4,535.49 down 13.43, -0.30%

o S&P 500: 1,366.39 down 21.86, -1.57%

o TSC Internet: 1,122.05 down 22.44, -1.96%

o Russell 2000: 551.11 down 7.31, -1.31%

o 30-Year Treasury: 101 08/32 up 29/32, yield 6.153%

In Today's Bulletin:

o Midday Musings: Baby, It's Cold Outside -- Especially for the Dow
o Herb on TheStreet: Investors Get Carried Away With Cell Pathways (Among Others)

Special times this weekend for "" on Fox News Channel

Due to coverage of the South Carolina primary, "" will air on Fox News Channel at 10 a.m. ET Saturday, Feb. 19, and again at 11 a.m. ET Sunday, Feb. 20. The show will return to its normal times of 10 a.m. and 6 p.m. Saturday and 10 a.m. Sunday (all times Eastern) next weekend.

Also on

Wrong! Rear Echelon Revelations: A Tired Kind of Friday

TheStreet Recommends

Just forget it. It's expiration. The trader's just seeing a bunch of minus signs.

Options Buzz: Expiration Watch Keen on Dell Options

And hedging plays move toward special names.

European Markets Update: European Closing Update: Stocks Show Sympathy Pains For Wall St.

London and Paris sell off. Frankfurt stocks muddle through.

Fixed-Income Forum: Did My Muni Bond Really Lose 20% of Its Value?

It appears to have done exactly that. Its long maturity and high quality didn't help.

Midday Musings: Baby, It's Cold Outside -- Especially for the Dow


Brian Louis

Staff Reporter

2/18/00 12:58 PM ET

The ugliness was widespread on Wall Street early this afternoon as traders weren't showing any enthusiasm for buying stock ahead of the long weekend.

The losses in the market came despite favorable news on the inflation front for the second day in a row and some modest strength in the bond market. However, a lingering hangover from



Alan Greenspan's


testimony yesterday, and a reluctance to go


long into the weekend had traders and investors paring back positions.


Dow Jones Industrial Average

was off 142.72, or 1.36%, to 10,371.85.

American Express

(AXP) - Get American Express Company Report

was the biggest drag on the Dow and was lately off 4.6%.

Ricky Harrington, chief technical analyst at

Wachovia Securities

in Charlotte, N.C., pointed out that the Dow has support from 10,200 down to 10,000. Of what he took out of Greenspan's appearance before the

House Banking Committee

yesterday, Harrington said that Greenspan "all but said" he's going to raise rates until the economy cools off or until the stock market does.


S&P 500

was down 17.85, or 1.29%, to 1370.40.


Nasdaq Composite Index

was last measured down 13.43, or 0.3%, to 4535.49. However, time has stood still for the Comp lately. The Comp isn't updating due to a computer problem. So take that quote with the requisite grain of salt.

Internet and networkers were among the notable losers weighing on the Comp. Not helping was modest weakness in index heavyweights


(MSFT) - Get Microsoft Corporation Report



(CSCO) - Get Cisco Systems, Inc. Report


Sun Microsystems

(SUNW) - Get Sunworks, Inc. Report


MCI WorldCom




(INTC) - Get Intel Corporation Report



Nasdaq 100

was down 58 to 4067.

The small-cap

Russell 2000

was down 4.9, or 0.9%, to 553.52. The

American Stock Exchange Biotechnology Index

was down 1.6%. Internet Sector

index was down 15.15, or 1.32%, to 1129.34, with

(AMZN) - Get, Inc. Report




among the downside leaders in the DOT.

Today is also the double-expiration of some stock and futures options, which some said is playing into the market's movements today.

Peter Cardillo, chief strategist at

Westfalia Investments

, said the decline in the Russell 2000 and the Nasdaq Comp was due to profit taking ahead of the long weekend. He also pointed out that the financials and the so-called "old economy" stocks continued to be under pressure today.

Cardillo said he's seeing a lot of the microcap stocks continuing to do well, an area of the market that has been forgotten for some time. He said the buying in that area of the market shows that people aren't afraid of the stock market. He did note, however, that within the small-cap world, the buying interest has been selective and honed in on technology and biotech stocks.

Breadth was decidedly negative. (see below)

Yesterday, for the first time ever, more than 2 billion shares changed hands on the

Nasdaq Stock Market

. Daily volume on the Nasdaq this year has averaged 1.679 billion shares, according to Nasdaq.

"This market is getting more and more irrational," said Harrington. He pointed out that over the last 23 sessions, the Dow has been down more than 10%, while the Nasdaq, over the last 14 sessions, has been up 21%.

With the weakness in basic industry stocks, along with softness in commodity-related issues like paper and chemical stocks, the market is telling him that the economy is going to slow down, probably dramatically before the end of the year.

Conversely, while those stocks languish, Harrington pointed to the recent strength in tech and biotech stocks, which he said was all about "money flow." With cash flowing into tech and biotech funds, money managers have to put that cash to work. Harrington said that those stocks are going up for liquidity reasons than fundamental ones. That liquidity situation, he added is "a dangerous situation" for investors because it can change quickly and dramatically.

In the Treasury market, the 30-year Treasury bond was up 29/32 to 101 8/32, yielding 6.158%. The 10-year Treasury note was up 15/32 to 100 1/32 to yield 6.502%. (For more on Treasuries, please look at



Bond Focus column.)

On the economic front, the

Labor Department

said the overall

Consumer Price Index

for January rose a lower-than-expected 0.2%, while excluding food and energy prices, the so-called core CPI, rose 0.2%. Economists polled by


expected overall CPI to rise 0.3%, while the core was projected to rise 0.2%.

Overall, the mostly-as-expected results in the CPI neither increase nor lessen pressure on the Fed to raise interest rates to cool the economy.

Among other indices, the

Dow Jones Utility Average

was down 1.6%; the

Dow Jones Transportation Average

was down 1.2%; and the

American Stock Exchange Composite Index

was down 0.3%.

Market Internals

New York Stock Exchange:

821 advancers, 2,033 decliners, 561 million shares. 27 new 52-week highs, 175 new lows.

Nasdaq Stock Market:

1,641 advancers, 2,310 decliners, 1.076 billion shares. 302 new highs, 81 new lows.

For a look at stocks in the midsession news, see Midday Movers, now published separately.

Herb on TheStreet: Investors Get Carried Away With Cell Pathways (Among Others)


Herb Greenberg

Senior Columnist

2/18/00 6:30 AM ET

Fried-Day (And I Do Mean It!)

Biotech boondoggle:

Haven't used


line for nearly 10 years, but biotechs are back, investors are tripping over themselves to buy them and I have a job to do.

With that in mind, not every company that is rising with the biotech tide is really a biotech company. Take

Cell Pathways


. It was up 24% yesterday, but has been rising since a story in the Feb. 21 issue of

Business Week

said it's likely to get


approval for


, which -- if approved -- will be used to help prevent precancerous cells that lead to colon cancer.

First, it's not a biotech drug; it's the derivative of a drug that has existed for decades. (But, hey, but do you really think most of today's biotech investors know the difference between a genome and fenome?) And who is to say it will be approved? Stephen Sabba, a physician who is also research chief at

Sturza's Institutional Research

in New York, says, "I don't believe it will be approved, and even if it were, it's such a tiny niche indication."

Indeed, the size of the market is believed to be less than 14,000 patients who will each spend $2,500 a year on the drug. That would be $35 mil in rev for a company that, as of Thursday, had a market cap of about $1.5 billion. However, that would be generous considering that


(MTC) - Get MMTec, Inc. Report

was recently cleared by the FDA to use a rival drug,


, to treat the same condition. (This is a new application for what many know as an arthritis drug.)

Cell Pathways Chief Counsel Richard Troy wouldn't discuss the market potential, but he did say that the company hopes the drug eventually will win approval for other ailments.

That's what they always say. Easier said than done.

Speaking of biotech:

Veteran biotech watcher Jim McCamant of the

Medical Technology Stock Letter

(who actually believes Cell Pathways could get approval for its drug) says it's only one of many stocks that could be considered overvalued. But then again, he points out, some Internet stocks rose 10 times before they got whacked. "We're starting to see the same thing in biotech," he says. "But there will be a sharp correction along the way. I'm scared," he adds, "because it has never been this easy to make money before."

Time out!:

This is it for the regular column for a few days. Vay-kay time. See ya in a week. Meanwhile, later today look for the second in what I hope will be a series of

"Tips for the Timid" on how to spot trouble before it occurs -- this time culled from readers.

Herb Greenberg writes daily for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.

Copyright 2000,