TheStreet.com's MIDDAY UPDATE
March 24, 2000
Market Data as of 3/24/00, 1:54 PM ET:
o Dow Jones Industrial Average: 11,090.69 down 29.17, -0.26%
o Nasdaq Composite Index: 4,980.38 up 39.77, 0.80%
o S&P 500: 1,529.45 up 2.10, 0.14%
o TSC Internet: 1,280.26 up 26.99, 2.15%
o Russell 2000: 577.34 up 3.55, 0.62%
o 30-Year Treasury: 103 19/32 down 1 04/32, yield 5.984%
In Today's Bulletin:
o Midday Musings: What, Me Worry? Nasdaq, S&P Flirting With Record Closes
o Herb on TheStreet: Nordstrom May Finally Be Getting Its Act Together
Ask Cramer on "TheStreet.com"
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Don't miss this week's "TheStreet.com" as guest Graham Tanaka, president of Tanaka Capital Management, joins our panel of writers on the show. "TheStreet.com" can be seen on Fox News Channel at 10 a.m. and 6 p.m. ET Saturday and at 10 a.m. ET Sunday.
Also on TheStreet.com:
Wrong! Tactics and Strategies: Welcome to His World
Cramer takes you between the scenes of a recent trade, and how he avoided the opening fake.
SiliconStreet.com: Cisco Briefly Surpasses Microsoft in Value
But considering Cisco's advantage in growth, it's something that could become permanent.
Market Features: OPEC and the Deep Blue Sea
At their Monday meeting, OPEC ministers will try to figure out how to keep oil prices stable.
Fixed-Income Forum: Do Bonds Bought at a Premium Produce Capital Losses?
Taxable bonds do, but municipals don't. We'll walk you through it.
Midday Musings: What, Me Worry? Nasdaq, S&P Flirting With Record Closes
David A. Gaffen
3/24/00 1:17 PM ETSomewhere, Alfred E. Neuman is
Nasdaq Composite Index
flirting with record closing highs, it's even clearer the Comp's recent 9% decline was akin to a glutton's easing back after devouring a bucket of oysters, before moving on to a 64-ounce steak.
Like yesterday, all major indices are up strongly, with breadth about as strong as yesterday. The one difference? Today, the Comp took lead first and other indices followed. Lately, the Comp was up 90, or 1.8%, to 5031, while the S&P was up 13, or 0.9%, to 1541. The
Dow Jones Industrial Average
was up 33 to 11,153, off its intraday high of 11,234.65.
The Nasdaq is led by just about every major sector. Net stocks are soaring, bolstered by positive analyst comments, as well as reports that
have resumed merger discussions, according to London's
. eBay leapt 22 11/16, or 10.2%, to 246 1/4, while Yahoo! gained 5, or 2.6%, to 196.
TheStreet.com Internet Sector
index was lately up 39, or 3.1%, to 1292.
TheStreet.com E-Finance Index
gained 7.3% after positive comments on a couple of that index's components, including
, which rose 2 1/16, or 9.4%, to 24.
rose 6, or 8.9%, to 73 11/16 after positive comments from
Morgan Stanley Dean Witter's
Mary Meeker. The analyst announced the formation of Morgan Stanley's forthcoming Internet index, which will begin trading options in a couple of weeks.
Computer makers were strong, as the
Philadelphia Stock Exchange Computer Box Maker Index
gained 1.3%. Dow component
was one of the leaders, gaining 4 9/16, or 4%, to 119 13/16.
Philadelphia Stock Exchange Semiconductor Index
was up 2%, while the
Morgan Stanley High-Tech 35 Index
gained 1.8%. The
was lately up 6, or 1.1%, to 580.
Nasdaq Stock Market's
most actively traded was
, which will also be a component in Morgan Stanley's Net index. The stock, lately
market-cap crown, rose 2 7/16 to 80 1/4 on 43 million shares.
With investor confidence in the coming earnings season high, individual Dow components can suffer without causing widespread panic.
Johnson & Johnson's
staggering today, after the company announced a recall of a heartburn medication due to nasty side effects. J&J was off 7 3/4, or 9.7%, to 72 1/4, but it hasn't had a broader effect on the Dow (aside from taking 38 points out of the day's move).
, meanwhile, gained 4 15/16 to 91 15/16, accounting for 24 1/2 points of the Dow's gain.
"It's all based on earnings euphoria," said Peter Cardillo, chief strategist at
. "Corporate America is doing good and we have not yet gotten many disappointments."
That's also given the market resolve to control its fear of the
, despite the committee's tough-talking statement Tuesday after raising the short-term fed funds rate to 6%. In its
statement, the Fed said "economic conditions and considerations addressed by the Committee are essentially the same as when the Committee met in February", a signal that more increases could be in the offing. That's something the market accepts, however, and the sentiment among participants is that the Fed will succeed in slowing the economy enough to avoid an outbreak of inflation.
"What happened a week ago Wednesday when money started to go after the Old Economy stocks was a realization that
is not mean-spirited, and is not going to precipitate a recession under his watch," said Al Goldman, chief market strategist at
The brokerage stocks were surging. The
American Stock Exchange Broker/Dealer Index
has risen 3 15/16 to 113 7/8;
Morgan Stanley Dean Witter
rose 3/4 to 95 1/2.
To be sure, strategists also attribute some of today's gains to quarter-end window-dressing, in which professional investors tend to buy outperforming stocks to boost their quarterly performance.
New York Stock Exchange's
most active was
, which was down again, losing 1 3/8 to 28 1/2 on 26.2 million shares.
Dow Jones Transportation Average
was lately down 0.7%, as was the
Dow Jones Utility Average
The 10-year Treasury note was down 20/32 to 102 13/32, boosting the yield to 6.17%.
Breadth was positive on hefty volume.
New York Stock Exchange
: 1,492 advancers, 1,330 decliners, 634 million shares. 98 new highs, 27 new lows.
Nasdaq Stock Market
: 2,082 advancers, 1,953 decliners, 1 billion shares. 117 new highs, 40 new lows.
For a look at stocks in the midsession news, see Midday Movers, published separately.
Herb on TheStreet: Nordstrom May Finally Be Getting Its Act Together
3/24/00 6:30 AM ET
In May 1998 I wrote a column in
that was titled, "High Noon at Nordstrom." It was about how
stock could wind up on the "sale" rack if it didn't get its act together. It had become a victim of the classic "family-run business syndrome": too much growth too quickly, too few controls and too backward in technology. The stock fell then rose then
fell, as the once revered retailer suddenly struggled.
But the Seattle-based company's worst days may be behind it. It's not popular to talk about retailers in a rising interest-rate environment, but Nordstrom has been left so far in the dust that some investors who are starting to nibble at its shares think it's one of those it-has-nowhere-to-go-but-up stories. The buyers include one hedge fund manager, who specializes in retail, who has been more short Nordstrom than long Nordstrom in recent years. "I like to buy great companies at a great price and this may be a great company at a great price," the hedge fund manager says. "The stock is down 50% from its high of last April, and the stock trades at a 50% discount to the
." It closed Thursday at 27 9/16.
His reasons for once again buying the company go beyond valuation, however, and can be traced to a series of press releases in recent months. This column often warns against companies with printing presses that work overtime churning out press releases. But it depends what the releases are saying. If they're just touting another contract or a new product that hasn't been developed it's one thing; if they're talking about major changes, it's another. With Nordstrom, you wouldn't necessarily connect the significance of the press releases unless you knew what you were looking for.
One of the first important releases came Feb. 2, when Jim Nordstrom retired from the company as co-president. He was one of a handful of Nordstrom brothers/sisters/cousins who had been co-presidents. One week later the company launched its first-ever national branding campaign -- a sign that the company was breaking with its conservative roots.
Two weeks later: The remaining Nordstroms had been reassigned, leaving CEO John Whitacre -- a non-Nordstrom, but long-time Nordstrom employee -- in full control. At the same time the company announced a better-than-expected fourth quarter. And in early March, for the first time -- and without fanfare -- the company reported monthly
comparable store sales, a sign that it is getting ready to play to Wall Street. (And the sales figures were good, which is impressive considering that the compounded annual growth rate of comp-store sales for the past five years, according to a Nordstrom fan, was zero. Some analysts are starting to whisper that based on data they've been able to find, first-quarter comps may be substantially better than expected.)
Just as important, perhaps, is that the company is trying to shake its reputation, in women's fashion, of carrying mostly conservative clothing. (Go into the Nordstrom by my house and you can't help but notice the color of the first floor: bright orange. That, apparently, is part of the change -- a change that my 15-year old actually
! And that teenage market is considered crucial.)
What's more, in recent days, several analysts have started to comment on the changes, especially the change in merchandising. "Analysts love something that is open-ended," the hedge fund manager says. While the whole retail group has been quashed, he notes that Nordstrom's operating margins are still 3 to 4 percentage points below its peers. Each 1 percentage point change adds 25 cents per share to earnings. "The fact is its sales per square foot is higher than its peers, and its profits are lower," he says. "That's potentially huge leverage."
One potential negative, as this column
pointed out, is the possibility that Nordstrom joins the ranks of other retailers that surprise Wall Street with news that its dot-com business is costing more than expected. (What's more, Nordstrom is going heavily into shoes. Do women really buy "fashion" shoes online?) However, the online biz is still small relative to the rest of the company. With more aggressive merchandising there's also a chance of more "markdown" exposure. (So the Rack stores do better?)
is quietly behind many of the changes, just as it was behind the changes at
Nordstrom officials, who apparently aren't willing yet to make a big fuss about their changes, couldn't be reached for comment.
On that unusually positive note:
I'm outta here (again!) for a week. The one good part about living in the Northeast is schools have winter breaks and spring breaks. But not before tonight's taping at
Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
email@example.com. Greenberg also writes a monthly column for Fortune.
Mark Martinez assisted with the reporting of this column.
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