May 24, 2000

Market Data as of Close, 5/24/00:

o Dow Jones Industrial Average: 10,504.51 up 82.24, 0.79%

o Nasdaq Composite Index: 3,182.65 up 18.10, 0.57%

o S&P 500: 1,387.12 up 13.26, 0.97%

o TSC Internet: 744.79 down 14.02, -1.85%

o Russell 2000: 453.18 down 5.83, -1.27%

o 30-Year Treasury: 100 25/32 down 12/32, yield 6.181%

In Today's Bulletin:

o Midday Musings: Light Volume, Selling Bias Leaves Many on Market's Sidelines
o Herb Greenberg: Herb's Hotline, Part 1: The Hidden Losers in the UAL-US Air Deal

Also on

Wrong! Dispatches from the Front: It's Dot-Com Selloff Time; Do You Know Where Your Net Funds Are?

The trader has a hunch that at least one big Net-based fund is biting the dust.

Market Features: Auto Sales Still Humming, Despite Forecasts of Idling

Detroit will wait to see if the recent interest rate hikes, however, put sales in neutral.

Brokerages/Wall Street: Firms and Exchanges to Swap Views on Markets' Future

The market structure of tomorrow is up for debate at a Manhattan meeting.

Dear Dagen: How to Weigh Turnover and Expenses When Buying a Small-Cap Fund

High expenses are more of a red flag than the turnover rate.

Midday Musings: Light Volume, Selling Bias Leaves Many on Market's Sidelines


Tara Murphy

Staff Reporter

5/24/00 1:45 PM ET Even the morning's green upticks weren't immune to the vagaries of light volume, which has become a tell-tale sign that investors are preparing for another

fed funds rate hike.

Wall Street insiders have made it clear that they will stay parked behind the starting line until Greenspan gives the green flag. So, without any new economic data out today, what sparked this morning's pseudo rally?

With tech analysis out the window after yesterday's resistance level break through, some are looking back to find a way to muddle through the future market madness. "Some high P/E


companies dropped below their 200-day moving average or trend lines," said Jack Ablin, managing director at

Colonial Asset Management

, referring to how investors were relying on technical analysis to plot there investment strategy. "But I think people are using near-term history as their guide now."

Lately, the Nasdaq was off 109, or 3.4%, to 3056. The index has currently lost 37.3% from its March 10 high.

In Nasdaq trading,


(COST) - Get Report

shares had the "For Sale" sign hanging from them after the retailer warned investors that it would miss analyst expectations for the fourth quarter and fiscal 2001. Wall Street firms including

Morgan Stanley

, downgraded the stock. Costco was falling 10 9/16, or 25.9%, to 30 1/8.


S&P Retail Index

was skidding 52, or 5.9%, to 840.


(WMT) - Get Report

, was discounted almost 5%,

Home Depot

(HD) - Get Report

was down more than 11%.

Elsewhere in tech land, Internet index

stumbled 41, or 6.1%, to 713, with


(BVSN) - Get Report

losing almost 10%.


Philadelphia Stock Exchange Semiconductor Index

, down 34.9, or 3.9%, to 836, continued to suffer losses, with

Advanced Micro Devices

(AMD) - Get Report

dumping over 7.2%.

But with a lack of participation making volume much lighter than what was seen during last-year's record-breaking highs, the bumps and bounces in today's session are anything but usual. "It's not a surprise, with everything oversold," said Art Hogan, chief investment strategist at


, commenting on today's early morning rally. "But I'd like to see more volume. Everything that happens gets very exaggerated." Hogan noted that yesterday's 200-point, intra-day drop in the Nasdaq, considering recent volume, is less significant than if it were to happen during a session with heavy volume.

Lately the

Dow Jones Industrial Average

was declining 32, or 0.3%, to 10,390. Despite strength from its cyclicals, like


(KO) - Get Report



(MMM) - Get Report

, weakness from two of its tech components


(IBM) - Get Report




, was shaving 40 points off of the old economy index.

One sector that has managed to dodge the Fed's bullet has been the interest rate sensitive financials, which typically underperform in higher rate environments. "Financials have been bucking the trend," said Patrick Boyle, director of trading at

Credit Suisse First Boston

, who trades financials. "The group as a whole is pretty cheap down here. Investors having been taking money out of tech and putting it to work in this sector."

Although the

American Stock Exchange Broker/Dealer Index

is currently down 12.8, or 2.9%, to 428,

Lehman Brothers


-- who recently acquired

Robby Stephens'

tech analyst Dan Niles -- was still in the green, along with





American Stock Exchange Airline Index

, was still flying high, up 15.2, or 10.4%, to 161. The index was fueled after


(UAL) - Get Report

, parent to United Airlines said that it has agreed to acquire

US Airways

(U) - Get Report

for about $4.3 billion in cash. For more on that

story, take a look at's

joint newsroom.

The hope for a benign GDP number tomorrow just wasn't enough to keep the bids coming, as the early morning rally turned into an afternoon selloff. "There is little resistance offered in the market," said James Maguire, Jr., managing director at


. "If sellers come in, the buyers back away...we'll probably continue to see this until the Fed sounds the all clear bell."

Market Internals

Breadth was negative on both the NYSE and the Nasdaq on moderately light volume.

New York Stock Exchange:

1,065 advancers, 1,758 decliners, 686 million shares. 29 new 52-week highs, 90 new lows.

Nasdaq Stock Market:

849 advancers, 3,092 decliners, 1.242 billion shares. 8 new highs, 331 new lows.

Herb Greenberg: Herb's Hotline, Part 1: The Hidden Losers in the UAL-US Air Deal


Herb Greenberg

Senior Columnist

5/24/00 10:56 AM ET

So sorry for a lack of a morning Herb on TheStreet. Too much good info coming in, too little time to work on it. ...

Take the deal between


(UAL) - Get Report

United Airlines and

US Airways

(U) - Get Report

. (Please!) What a joke!

Two airlines that can't quite do it quite right on their own (based on customer complaints) getting hitched. The only winner, if the deal goes through (and I stress


) will be

Julian Robertson

, whose patience as a US Air investor will finally (and I do mean


) pay off. (And you thought value was dead. Unfortunately, the only thing dead, from the standpoint of his investors, was Julian's sense of timing!)

But won't a deal this big lead to higher ticket prices? Forget higher prices. The worry of


coach passenger should be seat pitch, and UAL ain't a friend of those of us in steerage. Am I right?!

Am I right?!

You betcha (three years in Minnesota and nearly 21 years married to a Minnesotan does that to you!). Every airline




American Airlines (which I'm about to become


loyal to) is fighting the trend of adding a few inches between rows.



(CAL) - Get Report

, which arguably is the best of all airlines when it comes to customer care. Yet the response when I asked Continental's PR department whether CEO Gordy Bethune (a true turnaround genius) has ever endured six hours in coach was something like, "He believes passengers prefer good value." Right ... until the guy ahead of you puts his seat

all the way back!

Especially when you're in the center seat. Moooo!

Market magic: Me, a guru? As I called myself just yesterday in

this very column? It was all in jest!


Nobody is a guru.


Correctly predicting the market is luck ... and the luck to be quoted at the right place at the right time saying the right thing. And remember, the Hotline is meant to be a midday break -- and a peek into what at times is my very scattered brain. (Not that you ever wanted to go there! I don't even want to go there!!)

On to the market: The market


my target of 3225. "Now that


has corrected more than your 38% (or whatever it was)," asks Bruce Lulla, "what do you call a greater than 38% drop?" A disaster!!! (And it was 35% ... from its all-time high!) Next stop, when the market heads down again? (And it will!) I put my money on

Gary B.

, who took grief (and suffered untold anguish) for his call of 3000. He may have been early, but watch Gary B. be right! (Or

Johnny B. Goode


And speaking of grief (my mind, it wanders): That's what I gave the

Palm Beach Post

yesterday for ripping off this column's reporting on the


informal probe into


(CYBR) - Get Report

. One


editor conceded, in a phone call yesterday, that indeed the paper's reporters didn't know the


policy of citing previously published reports. That's just what they did today (thank ya, guys!) in a story that discloses how wide the SEC's net is being spread. (Whoa, now the

Ft. Lauderdale Sun-Sentinel

is back to reporting as if


discovered it. That's just what they did today! Have they no shame?!)

And tell me this: Why is it that most of the revolts from investors in companies like Cyber-Care and

Lernout & Hauspie


are loaded with poor grammar? (Oh, I know the answer, but I'm not telling!) My favorite from today: "Nobody trust you no more!!" Whatever. But for those who do, stay tuned for Part 2 of The Hotline later today.

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,