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midday03-02-00's MIDDAY UPDATE

March 2, 2000

Market Data as of 3/2/00, 1:30 PM ET:

o Dow Jones Industrial Average: 10,148.79 up 10.86, 0.11%

o Nasdaq Composite Index: 4,735.77 down 48.31, -1.01%

o S&P 500: 1,375.03 down 4.16, -0.30%

o TSC Internet: 1,164.73 down 34.80, -2.90%

o Russell 2000: 581.49 down 6.86, -1.17%

o 30-Year Treasury: 101 14/32 up 6/32, yield 6.158%

In Today's Bulletin:

o Midday Musings: Strong Palm Can't Hold Nasdaq Up
o Herb on TheStreet: Going for the Mo: Where Will Investors Go Next?

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Midday Musings: Strong Palm Can't Hold Nasdaq Up


Tara Murphy

Staff Reporter

3/2/00 1:44 PM ETMaybe it'll be the next Bond movie:

The Palm Is Not Enough


Despite the continued strong performance of the



IPO, the market has hit a rough patch this afternoon. Tech was seeing the most serious bloodletting, with Palm parent


(COMS) - Get ComSovereign Holding Corp. Report

taking a particular drubbing.

Palm lately was up 68, or 178%, to 106, giving it a market capitalization of $59.5 billion. The handheld computer maker's 23 million-share IPO was priced late yesterday at $38 a share, above the expected range of $30 to $32.

Brian Gilmartin, portfolio manager for

Trinity Asset Management

, noted that Palm's move owed a lot to the very limited float. The company has a total of 562.2 million shares outstanding, and 3Com holds 96% of them. "The smaller the float," he said, "the tighter the squeeze on the price."

3Com was off 16 1/8, or 15.4%, to 88 -- giving it a market cap of just $30.1 billion -- as investors leapt out of the shares after Palm started trading. 3Com plans to spin the rest of Palm off to shareholders within the next two quarters. A 3Com spokeswoman said the exchange ratio and exact record date haven't been determined yet, but shareholders who bought earlier today would be eligible.

The hype surrounding the much-anticipated IPO kept all eyes on the

Nasdaq Composite Index

, which continued to be lifted higher by small- and mid-cap communications and biotech stocks. "If you can combine wireless data, mobility and Internet connectivity, you have yourself a nosebleed valuation."

Lately, the Nasdaq was down 42, or 0.9%, to 4742, after pushing past the 4700 mark yesterday on record volume of 2.2 billion shares.

In Nasdaq trading,



shares were flying after it said it inked an e-commerce deal with


(MSFT) - Get Microsoft Corporation Report

and positive comments from

Credit Suisse First Boston


HNC Software


a bounce.

Sharing in the Nasdaq's decline, Internet Index

was falling 35, or 2.9%, to 1165, with


(BVSN) - Get BroadVision Inc. Report





The usually hot

Nasdaq Biotechnology Index

was looking cool, off 2.1%.

Despite today's losses, savvy investors can't dispute the strong performance in the stocks that have worked and feel compelled to get on board. "I feel as if I have to," said Gilmartin, whose portfolio is heavily weighted in large-cap, traditional tech names. "If you're a large-cap growth investor, you need a momentum component in your portfolio. We've seen a shift from large-cap tech to

Russell 1000

names like


(JNPR) - Get Juniper Networks Inc. Report






Dow Jones Industrial Average

was in positive territory, up 11 to 10,149, with


(T) - Get AT&T Inc. Report

and Microsoft contributing gains to the index that is signature if the old economy.


New home sales

might be giving investors a ray of hope that the


might be less aggressive in raising rates," said Peter Cardillo, chief strategist at

Westfalia Investments

. "But that all could change tomorrow if the labor cost and unemployment data show any signs of inflation. That could bring an end to the rally in the Dow and we could test last Friday's lows."

Telecom was booming on the

New York Stock Exchange

, with

British Telecom




(NOK) - Get Nokia Corporation Sponsored American Depositary Shares Report


Deutsche Telekom

(DT) - Get Dynatrace Inc. Report

all on the upside.

Crude oil's $30-plus price tag has started a buzz of inflation concerns on Wall Street. According to Cardillo, oil's high prices pose a threat to not only the economy, but also to oil producers. "Oil prices are going to be heading down," he said. "


has already made a statement that it would raise output, the question is by how much. High prices for oil are a negative for both the global economies and producing nations. Any other substantial rise in oil prices would mean higher inflation, high interest rates, a global economic slowdown and oil prices would collapse."

The broad

S&P 500

was down 3 to 1376, while the small-cap

Russell 2000

was down 7, or 1.1%, to 582, after setting a record yesterday.

Market Internals

Breadth was negative on fairly heavy volume.

New York Stock Exchange:

1,150 advancers, 1,707 decliners, 785 million shares. 92 new 52-week highs, 125 new lows.

Nasdaq Stock Market:

1,867 advancers, 2,219 decliners, 1.4 billion shares. 370 new highs, 73 new lows.

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

Herb on TheStreet: Going for the Mo: Where Will Investors Go Next?


Herb Greenberg

Senior Columnist

3/2/00 6:30 AM ET

Yep, it's the new me. Mr. Mo. Looking for the next h-h-hot sector. Yeeeaah, baby! We're rockin', now. No more gloom and doom, only stocks with room to BOOM!

OK, a little overboard -- I know! But now that I have your attention, let's call in this column's hot hand, Scott Turkel of

TCM Partners

in Connecticut, whose prior picks here (

TSI International Software











) have been nothing short of phenomenal. Caught up with him at the

Robertson Stephens'

technology conference, where he has been wowed by database companies.

His purchases include

Centura Software











. "Every presentation I've seen out here so far this week," he says, "involves technologies that require new architecture-designed databases that store new media, rich content, streaming media, video, sound -- all of the applications that turn the Web from digital back to analog."

Another fave:



. It has already been a big winner for Turkel, but he's not budging because he believes its patented method of delivering information to cell phones and other wireless devices will result in royalty revenue that hasn't yet been valued.

As for the cheapest Internet play: Turkel thinks it's


(INTU) - Get Intuit Inc. Report

, which he bought yesterday. It took a hit because last quarter its sales-growth rate sagged, but he believes its multitiered strategy of getting revenue from software, advertising and commerce creates an opportunity.

(But this warning: Turkel has been good at spotting early risers, whose stocks have followed improving fundamentals. No guarantee he'll be right on these. I point this out because unlike


, who


his positions, it's impossible to follow up on every stock mentioned here. And, don't worry, this item has nothing to do with me throwing in the towel. I'm not!

Yesterday's column, which said I was, was a joke. So was that sarcastic intro to today's column. Turkel, however, has been good to this column's readers, and this seemed like an appropriate time to check back with him.)

Short Positions

Down the lazy river:

Who says's

(AMZN) - Get Inc. Report

biz model isn't broken? Even CEO Jeff Bezos must agree, these days, based on his comments at a conference earlier this week when he said that he now viewed Amazon as an e-business incubator.

E-business incubator?

What happened to e-tailer? Well, would you want to call yourself an e-tailer these days?

Oh, and didya see what has happened to Amazon's stock since it recently raised $681 million in convertible securities. Off 14%. Slow bleed, anyone?

Happy anniversary to me!

Today marks my second anniversary at

. Couldn't be happier. Thanks for tuning in.

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. Community:

You know's the place for great market commentary, but did you know it's also the place for intelligent investing discussion? Check out our message boards with new and improved forums and formats.

Submit your picks for Jim Cramer and Melissa "Genome" Kasper's biotech rotisserie league. Also, don't miss the conversations on our Commentary boards, including Cramer's Latest, Jim Seymour's Tech Savvy, Gary B. Smith, Ben Holmes' IPOs and others.

Also, send your suggestions for TSC's Post of the Week and help us highlight posts you think stand out from the rest. Tell us which ones you think are best and we'll give the winner a TSC prize.

TSC Message Boards:

Also, Cramer will discuss his favorite stock picks Thursday as well as his views of upcoming deals in areas such as telecom, financial services and the Internet. Join Cramer for a chat Thursday, March 2, at 5 p.m. EST on America Online (Keyword: Live).

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