May 26, 2000

Market Data as of 5/26/00, 1:28 PM ET:

o Dow Jones Industrial Average: 10,322.55 down 1.37, -0.01%

o Nasdaq Composite Index: 3,174.92 down 30.43, -0.95%

o S&P 500: 1,377.53 down 3.99, -0.29%

o TSC Internet: 743.21 down 3.56, -0.48%

o Russell 2000: 454.74 down 1.43, -0.31%

o 30-Year Treasury: 102 20/32 up 23/32, yield 6.052%

In Today's Bulletin:

o Midday Musings: Trading Slows to a Halt as Holiday Get Away Commences
o Herb on TheStreet: What P.F. Chang's Doesn't Disclose to Shareholders

Also on

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MarchFirst shares have plunged since its creation by merger, and management has the cash to fund a buyback.

Retail: Crunching the Growth Numbers at eBay

The stock has slid amid worries of slowing auction growth. But the picture's more complicated, the company insists.

Fixed-Income Forum: Ginnie Mae Pass-Throughs and You

Here's the lowdown on the bond investment Bill Gross has picked to win over the next several years.

Midday Musings: Trading Slows to a Halt as Holiday Get Away Commences


Kristen French

Staff Reporter

5/26/00 1:08 PM ETAfter an upward shot at the open and a pretty violent flip to the downside, the market's major indices have been floating in and out of the red and green this morning, but lately they were mostly a touch lower.

By midsession, the major indices were mixed, with the

Dow Jones Industrial Average

up 27 at 10,351, while the

Nasdaq Composite Index

was down 21 to 3184 and the

S&P 500

was up 1 to 1383.

The flip-flopping is due to several things. First, a lack of conviction after a harrowing week of 100- and 200-point swings has knocked the wind out of many Wall Streeters.

Bill Meehan, chief market analyst at

Cantor Fitzgerald

said that the market's reaction to yesterday's

Goldman Sachs

(GS) - Get Report

news, which put a serious dent in some unrelated sectors and basically took out the entire market, is a sign that "this is a very sickly market."


Merrill Lynch

analyst Judah Kraushaar lowered his estimate for Goldman's earnings and said that Goldman, itself, was uncomfortable with the Street's earnings estimates.

For more on Goldman's woes, see's



Two: not many investors are even around today as many have ducked out ahead of this Memorial Day weekend.

"We should see less and less volume as the day goes on. Volume will just sort of dry up as participants take off and do the beach thing," said Doug Myers, vice president of equity trading

IJL Wachovia


And three, this morning's data didn't really abate economic and interest-rate uncertainty. The

durable goods orders came in surprisingly cool, with orders declining at the fastest rate in more than eight years. But the numbers are a very volatile series, so it's hard to get a good read on one month's numbers. And these were countered by personal income and spending figures, up 0.7% and 0.4% in April. For more on today's durable goods orders, see this


The market probably won't get a solid indication of whether the economy has really slowed until next week's jobs numbers come in. Fears the


may still tack on another 100 basis points before the year's end are alive and kicking.

In NYSE trading, brokerage and financial stocks were rebounding after spinning lower early yesterday on the Goldman news.

Goldman Sachs was off 2 3/4, or 3.8%, to 70 1/4, after losing 7, or 8.8%, yesterday.


American Stock Exchange Broker/Dealer Index

was off 3.8% and the

Nasdaq Financial-100 Index

was off 20 to 3079.


Office Depot

(ODP) - Get Report

was taking a beating after announcing that it expects its second-quarter earnings to fall 4 cents to 6 cents below analysts' estimates. The company's shares were recently down 3, or 28%, to 7 9/16.

In tech and telecom land, some bellwethers were showing strength.


(CSCO) - Get Report



(INTC) - Get Report

were heading higher, while


(NOK) - Get Report




were countering those gains.

Other major indices were mixed, with the Internet Sector

Index off 1 to 745 and the small-cap

Russell 2000

down 1 to 455.

Market Internals

Breadth was negative, and volume weak on both the NYSE and the Nasdaq.

New York Stock Exchange:

1,363 advancers, 1,333 decliners, 432 million shares. 30 new 52-week highs, 67 new lows.

Nasdaq Stock Market:

1,475 advancers, 2,171 decliners, 622 million shares. 15 new highs, 174 new lows.

Herb on TheStreet: What P.F. Chang's Doesn't Disclose to Shareholders


Herb Greenberg

Senior Columnist

5/26/00 6:30 AM ET

Fried-Day (and a brief one, at that!):

Maybe it's no big deal, but just thought I'd ask: Why doesn't the

P.F. Chang's China Bistro


proxy bio for Paul Fleming (its founder, currently a director, largest shareholder and paid consultant of the Asian food chain) say that he is also an owner of two other restaurants, one of which competes almost directly with Chang's? Several of his


southwestern-style restaurants are down the block or in the same complex as Chang's.

Isn't that something of a conflict? After all, both are going after pretty much the same customer, and in the risk-factor sections of its


filings, Chang's cites the possible difficulties of hiring employees and the intense competition in that business -- especially in the "mid-price, full-service casual-dining" segment in which both compete. (Fleming, who has been trimming his Chang's holdings, is the name behind

Fleming's Steak House


So, why weren't his other restaurants mentioned in the Chang's proxy? "We don't feel it's an issue," says Chang's CFO Bert Vivian, who points out that both chains are very small. "Paul is an entrepreneur," he adds. "We have known since day one that he would be involved in other restaurant entities. Everyone at P.F. Chang's, from the board on down, don't feel his other activities are a conflict. Yes, they're competitive, but we don't feel his activities are in conflict with his duties at PF Chang's."

Would've been nice, however, to at least let investors make up their own minds if they felt it was a conflict.

Fleming couldn't be reached.

Reminiscences of stock operators:

Thursday's Hotline noted how



had missed its quarters. Short-sellers (and

this column, for carrying their message) were vilified for suggesting the company's biz was slowing. That's all too familiar to shorts who were short THQ and are currently short



. Says one, comparing THQ, which makes video games, to Salton, which makes the George Foreman Grill: "They both have low P/Es, they both have one product that is being hyped -- THQ's was professional wrestling, Salton's is George Foreman. And they both blame their problems on the shorts. Lo and behold, six months later, THQ's operations turn down and everybody's shocked." Does the same fate await Salton? Who knows, but at least now you know how the shorts think.

And speaking of Salton, a Hotline item

mentioned how analyst Jim Goll of


thought Salton will be generating enough cash flow next year to possibly pay a dividend. I then noted that the high-yield debt covenants restrict the company from paying a dividend. Goll, a former high-yield analyst, forwarded his marked-up copy of the same document suggesting that the company would be able to pay dividends if it met certain tests. All of which, of course, is subject to interpretation.


(If you didn't see Thursday's Hotline, that's a new category in this column for companies whose stories, mentioned here, come back to haunt them.) The latest:

Federal Mogul

(FMO) - Get Report

, which late Thursday pre-announced


(This time it was


bad. The trouble, of course, is that at the height of the market's lunacy people really did want to believe that the auto parts after-market was a high-growth biz. Never was, never will be.)

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,