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February 25, 2000

Market Data as of 2/25/00, 1:49 PM ET:

o Dow Jones Industrial Average: 9,919.20 down 173.43, -1.72%

o Nasdaq Composite Index: 4,601.58 down 16.07, -0.35%

o S&P 500: 1,336.47 down 16.96, -1.25%

o TSC Internet: 1,175.06 down 9.50, -0.80%

o Russell 2000: 558.38 up 4.34, 0.78%

o 30-Year Treasury: 101 02/32 down 15/32, yield 6.171%

In Today's Bulletin:

o Midday Musings: How Do You Spell Bifurcation? D-O-W-&-N-A-S-D-A-Q
o Wrong! Tactics and Strategies: The Significance of 'Raising the Bar'

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Midday Musings: How Do You Spell Bifurcation? D-O-W-&-N-A-S-D-A-Q


Brian Louis

Staff Reporter

2/25/00 1:24 PM ET

In case you stepped away for a while -- or a few weeks or months perhaps-- the divided market is still intact.

Amid lunch hour on Wall Street, major stock proxies were turning in a mixed performance, with the

Dow Jones Industrial Average

bumping above and below the 10,000 level but consistently lower on the session. Not surprisingly, the

Nasdaq Composite Index

and the

Russell 2000

were both in positive territory.

John Hughes, technical analyst at


, pointed out today's action is not that different from that of the last few weeks and "really since the year began," where "you have technology and everything else." The market's been seeing value money managers faced with redemptions, forcing them to sell their holdings, which are already depressed. And the money coming out of value is going into tech where money managers then buy the market's winners, he said. Hughes likened it to pouring water from one glass into another.

Not providing a lot of help to the market was this morning's revised fourth-quarter

gross domestic product

report. The fourth-quarter rate of GDP was revised upward to 6.9% from an original 5.8%. The revision was due to stronger-than-expected government and consumer spending, as well as higher exports in the December trade figures. It is the strongest rate of GDP since the second quarter of 1996. Economists were looking for a 6.4% rate, according to a


poll. That growth rate is not the stuff that makes lower interest rates.

On the plus side, the report's inflationary component, the implicit price deflator, was unchanged at 2%, good news for stocks and bonds. Economists were expecting a 2.2% deflator, according to the



As for the Dow, well, it can't catch a break. The blue-chip average was off 112, or 1.1%, to 9980. Weighing on the Dow the most were

General Electric

(GE) - Get General Electric Company (GE) Report



(IBM) - Get International Business Machines (IBM) Report



(MMM) - Get 3M Company Report


The Dow held in above 10,000 for a good portion of the morning. However, around 11:20 a.m. EST, the Dow took a big tumble and slumped below 10K. It has since bounced above and below that level.

Elsewhere, the

S&P 500

was down 7, or 0.5%, to 1346.

The Nasdaq Comp was up 26, or 0.6%, to 4643. The Comp closed yesterday at an all-time high, its second in a row and the 11th record close of the year. The

Nasdaq 100

was off slightly.

Hughes said he "wouldn't be surprised" to see the Comp go to 5000. He said the move there might be gradual. But he said he'd be careful of an exhaustive move up, like a four, five-day push of euphoria. He said if that was a scenario that unfolded, that would concern him.

Elsewhere, the small-cap

Russell 2000

was up 7, or 1.2%, to 561.

The market's divergence between technology, telecom and biotech stocks and everything else has more than a few people concerned.

"I think this market is just sort of spooky," said Peter Coolidge, managing director of equity trading at

Brean Murray Foster Securities

. He said the bifurcation in the market "doesn't instill confidence."

The divergence has investors and traders wondering how it will end, he said, noting that the gap is continuing today. The trader said it's a case where people are selling the losers and buying the winners, having a piling-on effect, and exacerbating moves in both directions.

"It's really disconcerting," he said. "These gyrations don't instill confidence. It's a crazy kind of market." Internet Sector

index was down 1, or 0.1%, to 1184.


(EBAY) - Get eBay Inc. Report



(RNWK) - Get RealNetworks, Inc. Report

were prime drags on the DOT.

Sectorwise, banks and oil stocks were showing a bit of strength as were biotech issues. The

Philadelphia Stock Exchange/KBW Bank Index

was up 0.8%, as was the

Chicago Board Options Exchange Oil Index

. The

Nasdaq Biotechnology Index

was up 2.2%.

In the Treasury market, the 10-year Treasury note was down 3/32 to 100 28/32 to yield 6.38%. The 30-year Treasury bond was down 21/32 to 100 28/32, yielding 6.19%. (For more on Treasuries, see



Bond Focus column.)

Among other indices, the

Dow Jones Utility Average

was down 0.9%; the

Dow Jones Transportation Average

was down 0.2%; and the

American Stock Exchange Composite Index

was up 1%.

Market Internals

New York Stock Exchange:

1,295 advancers, 1,527 decliners, 640 million shares. 40 new 52-week highs, 149 new lows.

Nasdaq Stock Market:

2,014 advancers, 1,971 decliners, 1.1 billion shares. 278 new highs, 79 new lows.

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

Wrong! Tactics and Strategies: The Significance of 'Raising the Bar'


James J. Cramer

2/25/00 7:40 AM ET Raising the bar. These are three little words that have taken on a currency, a virtual life of their own in this market. You have to know and understand the power of these words because, in many ways, they have become the determinant of the next 10 points in a stock.

When a company issues a quarterly report, it then presents expectations for the future. In the New Economy, a company that sits still, or doesn't raise the bar, gets pummeled. But a company that raises the bar, or sets new, higher expectations, is a company on the move.

Everybody in the know knows this lingo. It is incredible how often it comes up. Why did

BEA Systems


not go up after its blowout quarter? The company didn't raise the bar high enough. Why did



go up so big?

The bar was raised high. No matter that BEA Systems may have just been conservative, if that bar doesn't go up, there is all heck to pay.

Why does this matter? Because it is quite different from the old paradigm, which said that if a company beat the "whisper number," its stock went up. That went out of fashion as a primary method when


began reporting the whisper number. Funny thing about whisper numbers. When they are shouted, they are no longer whispers.

The difficult thing for fundamental, nonchartist individual investors is that you can't find if the bar was really raised unless you are on those conference calls, many of which are closed. That these key sessions, where major material information is released, including how high the bar has been raised -- or worse, whether it has been lowered -- is such a fundamental injustice as to be nothing but wrong.

Get used to this phrase. I have tried avoiding its use because jargon doesn't illuminate. But it is being used way too often not to give it to you as a piece of the puzzle.

Random musings:

Don't forget to fill out our

broker survey. This one has heft to it, and we need your input. We are bent on creating the largest online survey ever. ...


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gets hit with a negative


article and then issues a secondary. Probably set up for a run after those whackings. ... Great article about false negatives today in the right-hand column of

The Wall Street Journal

. ... Tip-of-the-chapeau department: My hat is off to

James Padinha

, who correctly predicted the


rally (see Heard on the Street today in the C section of the


) ahead of its occurrence. Could have saved desks billions. There is no love between us, but you have to praise a home run call like that.

James J. Cramer is manager of a hedge fund and co-founder of At time of publication, his fund was long Portal Software. 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.

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