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February 24, 2000

Market Data as of 2/24/00, 1:35 PM ET:

o Dow Jones Industrial Average: 10,025.62 down 200.11, -1.96%

o Nasdaq Composite Index: 4,567.46 up 17.13, 0.38%

o S&P 500: 1,342.72 down 17.97, -1.32%

o TSC Internet: 1,174.43 up 6.95, 0.60%

o Russell 2000: 552.38 up 2.47, 0.45%

o 30-Year Treasury: 102 01/32 up 10/32, yield 6.088%

In Today's Bulletin:

o Midday Musings: Continuing Dow Selloff Has Players Weighing Importance of 10,000
o Wrong! Rear Echelon Revelations: A Reversal of Fortune

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Midday Musings: Continuing Dow Selloff Has Players Weighing Importance of 10,000


Tara Murphy

Staff Reporter

2/24/00 1:23 PM ET

It was a gory scene during morning and early-afternoon trading. Wall Street was showing no mercy as investors went on a selling spree, knocking the

Dow Jones Industrial Average

, at one point, below the 10,000 level and leaving the

Nasdaq Composite Index

off its highs after

yesterday's record-breaking session.

Today, investors are continuing to route cash toward the high-priced tech stocks that boast extreme valuations, leaving the Dow cyclicals slumping. So why are these "value" stocks so neglected? Many money managers can't seem to put their finger on it.

"It's very strange," said Brian Gilmartin, portfolio manager at

Trinity Asset Management

. "With strong earnings the Dow 30 are still experiencing sharp selloffs. The decline in the price of companies such as


(PG) - Get Procter & Gamble Company (The) Report



(WMT) - Get Walmart Inc. Report

do not indicate a corresponding deterioration in the fundamentals."

Lately, the Dow was plummeting 198, or 1.9%, to 10,027, with its interest-rate-sensitive financial components, including

American Express

(AXP) - Get American Express Company Report


J.P. Morgan

(JPM) - Get JP Morgan Chase & Co. Report

, pulling the index down.

The Dow's dip below the 10,000 support level made for some uneasy trading, as market players looked for buyers to hold the line.

"I think the key support level will be more important at today's close," said John Manahan, head trader at

Brown Brothers Harriman

. "Hopefully, they're going to make a stand here and get buyers in, but it seems if it's not a four-letter stock, no one wants to buy it."

But others dismiss the 10,000 level as psychological, because the randomness of the index doesn't seem to accurately represent today's market. "If it wasn't for

Robby Stephens



(INTC) - Get Intel Corporation Report

, it could have been worse, said Bill Meehan, chief market analyst at

Cantor Fitzgerald

, referring to the tech heavyweight's presence in the Dow. "What's going on in the Nasdaq and


is where all the action is. Maybe

Dow Jones


should have added in


(CSCO) - Get Cisco Systems Inc. Report



(AMGN) - Get Amgen Inc. Report


"Some insiders put targets on the Dow last year," Meehan went on. "When 13% of its components changed, I don't recall the insiders changing their targets. It was as if they expected Intel and Microsoft to behave the same way as


(GT) - Get The Goodyear Tire & Rubber Company Report


Union Carbide



Lately, the Nasdaq was up 6, or 0.1%, to 4557, clinging to the plus side despite some profit-taking after yesterday posting its largest point gain ever. In

Nasdaq Stock Market


Research in Motion


was hitting a new high, up 19, or 16.1%, to 137 1/4, while


(QCOM) - Get QUALCOMM Incorporated Report

was falling 9 15/16, or 6.8%, to 136 15/16, after China delayed approval for a mobile phone network that would use its technology.



Alan Greenspan's

recent rate-hike warnings have not sent tech buyers running scared. Tech investors have conviction that interest won't dent their investments, which rely mainly on capital in earned in the stock market instead of credit. According to Meehan, however, this belief could be a huge investor oversight.

"It's further proof that we're in a mania right now," he said. "Tech doesn't tap into credit market when it can get free money in the equity market. However, the improvement in productivity is a function of selling technology to companies, such as banks, manufacturers and retailers, that are affected by interest rates. The rate that they will invest will be impacted if interest rates rise, and that will impact tech companies."

Elsewhere in techland, Internet Sector

index was up a fraction to 1168.


(BVSN) - Get BroadVision Inc. Report

was doing its part to keep the measure in positive territory, bouncing 17 1/4, or 8.3%, to 225.

The broad S&P 500 was down 20, or 1.5%, to 1341, while the small-cap

Russell 2000

was up 2 to 551.

Market Internals

Breadth was negative on heavy volume.

New York Stock Exchange:

908 advancers, 1,963 decliners, 680 million shares. 44 new 52-week highs, 268 new lows.

Nasdaq Stock Market:

1,703 advancers, 2,300 decliners, 1.2 billion shares. 228 new highs, 98 new lows.

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

Wrong! Rear Echelon Revelations: A Reversal of Fortune


James J. Cramer

2/24/00 8:55 AM ET How incredibly inconsistent is this market? Consider a phone call I had with my partner, Jeff Berkowitz, yesterday morning before I prepared to spend a day playing "Keep Away" and "Monkey in the Middle" with my girls at Long Boat Key, Fla.

I had checked in because, these days, anybody who has ever owned a stock loves to ask me about it, whether I am at the Manatee preserve or poolside at the hotel. All I heard Monday was fretting from holders of


stocks, as, one by one, people unburdened to me about their four-letter sob stories. So, even though I vowed not to read the paper and I had not brought my PC, I took a peek and saw the previous day's carnage.

Candidly, I hate it when I don't know what's going on.

Jeff discussed how all of the names -- that's our shorthand for the heavy volatility


names, courtesy of

Matt Jacobs

, who introduced most of them to us -- took their toll on Tuesday's run. (Run is synonymous with report card in our business; it is the word that means all of your positions, as summed up by the margin run that you received in the morning.)

Offhandedly, he mentioned that maybe some of these names would get a boost from the Heard on the Street article about the

Merrill Lynch


high-tech baskets being put together. Otherwise, he was worried. I was worried.

We hate to lose money on anything. But when you own these stocks, you lose a lot of money when things go bad. (Remember, in the professional business, you speak of losing money whether you take the trade off the table or not, because you are marked to market in our business.) We talked about whether we had too much

B2B and too much


(CSCO) - Get Cisco Systems Inc. Report

and too much

America Online


and too much


(EBAY) - Get eBay Inc. Report

. The latter three stocks seemed to be the shorthand for our predicament.

My wife, who was working out at the time of the reality check, could detect the glumness the moment she walked in the room. To her "What's the matter?" I said, simply, "The guys had a tough day. Could be another one ahead."

She reminded me I was on vacation and it was my job to come back fresh. Meaning: no more checking in. I spent much of the day having fun, but in the back of my mind, it was nagging me that we were wrongly positioned going into the day after a tough day. I could just imagine the trashing I was getting on all of the boards, from our own to

Silicon Investor




, about my last piece posted:

Cramer's Not Writing the Obituary. As if some press hounds weren't yapping enough about


these days.

So I was good to my word. I didn't call back. In fact, the closest I came to talking about the market was chatting with some of the good folks who work at the Mar Vista, the best seafood I have had in years, many of whom love


But when I got in the car on the way to the airport for my flight back, I couldn't resist seeing if anybody was around at 6:30 p.m. at our office. Both

Melissa "Genome" Kasper

and were in. I braced myself. "How did it go, Matt?" "Sick," he said, which is 20s-speak for "fantastic," just in case you are as out of it as I was before meeting Matt. "We killed 'em today."

"Really?" I asked.

"Yeah, Cisco was up 14 and America Online up 7, and Blodget put eBay on the buy list at Merrill. It was the sickest day."

Hmmm, good to be sick, I thought to myself.

I said that was terrific -- I still use words that mean what they meant when I was growing up. I told him I looked forward to seeing him early in the a.m. --


forbidding -- and I rang off. (No luck -- plane was 2 1/2 hours late, so I didn't get in till late in the a.m.)

I then sat back to ponder the sheer irony of the past 12 hours, uninvestable irony, but certainly more ironic than my

Dean Koontz

novel, which I expected to see me through the next four hours. Cisco, AOL and eBay, the three goats of the game Tuesday, starred in Wednesday's action.

We had a great day. My mind shot to that premature passing of the Nasdaq column, the anti-obituary, and I had a quick laugh to myself about how silly the naysayers and anti-Cramer chatterers must have seemed at the end of yesterday's session. Sweet.

And I pondered what a sick time I had in Florida while the team held up its end in New York.

But now it's good to be back.

Random musings:

You hang around long enough in this market and even the scammers can make you money. As one of the people who was faked out by the phony



bid story that ran on a faux-


page last year, I see if I had held on instead of taking the loss, I could have made a pretty penny. ... I can't tell you how many people complain to me about the very brokers that always get hyped by


, my former employer, or


, that one-man judge and jury who, to me, doesn't know as much as our readers. So, this is your chance, readers. Fill out the

broker survey and tell everybody what you tell me. This survey is so important because it is the only one where individuals decide, not the deacons of our business, all of whom are compromised in one form or another. Go tell the truth.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long Cisco, America Online, eBay, Yahoo! and, and Cramer was long Cramer's fund may be long or short certain stocks in his biotech or B2B rotisserie leagues or New Tech 30 index. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

"The" on the Fox News Channel

You've got questions about your favorite stocks? Jim Cramer's got answers. Call him this Friday, Feb. 25, at 6:45 p.m. EST at 1-888-TELLFOX (1-888-835-5369). Your stock questions will be asked and answered on "" show on the Fox News Channel this weekend, but you have to call during our taping Friday to take part.

Also this week on "," we'll be talking about the Dow free fall, the Net sector and more with Jim Cramer, Adam Lashinsky, Dave Kansas and guest Scott Reamer, managing director of Internet research at SG Cowen.

"" on Fox News Channel airs Saturdays at 10 a.m. and 6 p.m. EST and Sundays at 10 a.m. EST. FNC is Fox's 24-hour cable news channel. To find Fox News Channel in your area, call your local cable operator or see our"TSC on Fox TV" page at

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