TheStreet.com's MIDDAY UPDATE
September 30, 1999
Market Data as of 9/30/99, 1:18 PM ET:
o Dow Jones Industrial Average: 10,275.85 up 62.37, 0.61%
o Nasdaq Composite Index: 2,735.47 up 5.20, 0.19%
o S&P 500: 1,276.17 up 7.80, 0.61%
o TSC Internet: 645.58 up 2.09, 0.32%
o Russell 2000: 422.99 up 1.47, 0.35%
o 30-Year Treasury: 100 21/32 up 22/32, yield 6.072%
In Today's Bulletin:
o Midday Musings: Market Bounces Back From Lows as Quarter Winds Down
o Herb on TheStreet: Noticed How E-Tailers Appear to Be Pulling Out All Stops to Lure New Customers?
The buzzword on the boards is gold! From Cramer to Padinha, everyone's got an opinion on this precious metal and what it means to Wall Street. Make sure to share yours.
Gold's Surge Wreaks Havoc on Wall Street Inflation Models
And make sure to check out these other great boards:
Herb Greenberg: Noticed How E-Tailers Appear to Be Pulling Out All Stops toLure New Customers?
Jim Seymour: *Extra* Amazon's New Plan
TheStreet.com on the Fox News Channel
Gruntal's Peter Green does the "Drill" with Herb Greenberg and Dan Colarusso. Find out which stocks the technical analyst likes and which ones he'd most like to short.
And Gary B. Smith goes head-to-head with Adam Lashinsky over two top market indexes in Chartman. Will it be buy, sell or hold for the Nasdaq and the S&P 500?
Also, Jim Cramer's calling for a rough road in the month ahead. He'll tell how he plans to dodge the missiles of October.
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Also on TheStreet.com:
Wrong! Dispatches from the Front: Why Does Everybody Want Out of the SOX?
To that, Cramer says: Give me a break!
Energy: More Problems Upstage Friede Goldman's Merger With Halter Marine
Friede Goldman may have to take charges against third-quarter earnings. Its problems stem from construction delays and possible fines.
Market Features: Gold's Surge Wreaks Havoc on Wall Street Inflation Models
Strategists who thought gold was signaling disinflation are realizing it wasn't signaling much of anything. What do you think? Tell us on our message board.
Dear Dagen: Dear Dagen: 'Defined Asset Funds' Is a Fancy Name for Familiar Product
They're also known as unit investment trusts, or UITs, which have been around for decades.
Midday Musings: Market Bounces Back From Lows as Quarter Winds Down
9/30/99 1:19 PM ET
On Wall Street, the sales were over and stock prices were back up thanks to a little end-of-the-quarter window-dressing by portfolio managers and the fading fears that the
will up rates on Tuesday.
The higher-than-expected prices-paid component of the
Chicago Purchasing Managers' Index
sparked an early-morning selloff before the market bounced back, said Jim Herrick, managing director of trading at
Robert W. Baird
in Milwaukee. Herrick said he thought window-dressing was behind the bounce.
Dow Jones Industrial Average
was up 70, or 0.7%, to 10,283, guided by
Nasdaq Composite Index
continued to gain ground from Wednesday's 2694.70 low, mounting 8 to 2739. "I think that we're struggling in attempt to establish a new trading range," said David Resler, chief economist at
. Resler thought the change in today's trading sentiment might be linked to the prevailing investor negativism that has plagued the market recently. "People are saying, maybe we've overdone it a bit," he said.
The ADRs of India-based software firm
were bustling on the
Nasdaq Stock Market
poll said that net profits for the company are expected to leap 84.1%, while
was also in solid green territory after it announced that it would be acquired by
With the U.S. markets newly found positivity, the usual signs of a
get-together were no where to be found. "The Fed's openmouthed policy has signaled subsequent moves in its open market policy," said Resler. "If the Fed did raise rates, it would produce a significant negative reaction in the financial markets because
the Fed has failed to hint that they're inclined to tighten again," Resler added.
The dollar was quoted midday at 106.75 yen, regaining some momentum from this morning. But today's strong yen hasn't knocked the U.S. markets lower, for a change. "Today's movement in the U.S. market seems to have broken a pattern of tracking the inverse way changes in the yen's performance," Resler said. "Today, the yen is strong and the Dow and other indices are up."
Other stock proxies were also in green territory with the broad
up 9 to 1277, while the small-cap
bounced 1 to 423.
TheStreet.com Internet Sector
index was up 2 to 645, with
, down 2 to 109 1/4, and
, off 1 5/8 to 79 1/4, taking some steam out of the index. On a positive note,
was up 9 5/8, or 7.9%, to 131 1/2 after it declared a 3-for-1 stock split.
New York Stock Exchange
, up 3 15/16, or 7.9%, to 53 5/8, didn't need any CPR after
analyst Dan Lemaitre added the stock to its Focus One list.
In other Big Board news, advancers were leveling decliners 1,585 to 1,257 on 516 million shares, while on the Nasdaq laggards were edging out leaders, 1,861 to 1,847 on 617 million shares. New 52-week lows were pummeling new 52-week highs 137 to 39 on the NYSE, while on the Nasdaq new lows were beating new highs 132 to 57.
On the bond front, the benchmark 30-year Treasury was up 20/32 to 100 21/32, its yield declining to 6.08%. (For more on the fixed-income market, see today's early
Thursday's Midday Watchlist
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
CMGI rose 2 7/8 to 103 3/16 after saying it will buy online advertising agency Flycast Communications in a stock swap worth about $559 million. Shares of Flycast hopped 8 5/16, or 21%, to 46 1/4, after hitting a record high of 52.
Mergers, acquisitions and joint ventures
rose 1/8 to 19 3/8 after it agreed to sell its interest in three Philadelphia area nuclear power plants to
, lately up 9/16 to 36 3/4, and
Public Service Enterprise Group
which edged up 5/16 to 38 1/16.
LVMH Moet Hennessy Louis Vuitton
rose 1/4 to 59.
The Wall Street Journal
reported that LVMH and
are toiling together on a cooperative bid for control of
, the Rome-based designer.
added 3/16 to 20 9/16 after saying it will buy $100 million of stock in
. The investment represents 6% of Whittman-Hart's outstanding capitalization. Shares of Whittman tacked on 1 to 36 15/16.
gained 5/16 to 38 7/8 after its said its buying
North County Bancorp
, lately up 1/8 to 19 5/8. Under terms of the deal, North County shareholders will receive about $21 of Wells Fargo stock for each North County share they own. North County closed yesterday at 19 1/2.
Earnings/revenue reports and previews
fell 2 15/16, or 12.2%, to 21 1/8 after saying it expects third-quarter revenue to be at least twice that of the year-ago period, but expects losses to more than triple those of the comparable quarter.
Helen of Troy
inched up 3/16 to 9 5/8 after it reported second-quarter earnings of 27 cents a share, a penny better than both the three-analyst estimate and the year-ago figure. The company also authorized the repurchase of up to 3 million common shares. Still, the company said lower second-quarter sales forced of its beauty-care products forced it to adjust its year sales growth estimate down to between 5% and 10%.
rose 17/32, or 7.4%, to 7 11/16 after saying it will take a third-quarter net charge of $14 million for litigation-related fees.
gained 5/16 to 32 7/8 after reporting third-quarter earnings of 36 cents a share, in line with the 15-analyst estimate and up from 32 cents a year ago. The company also approved the repurchase of an additional 10 million common shares.
fell 1 1/8, or 15.9%, to 5 15/16 after saying it expects third- and fourth-quarter earnings to miss analyst estimates by as much as 38 to 40 cents a share and also said it will take a $50 million charge to liquidate some of its inventory. The company also said it will reduce the number of superstores it plans to open next year and will up the amount it invests in its e-commerce business.
fell 13/16 after saying it will re-evaluate its Russian investment and may take a fourth-quarter writedown after
withdrew its support. Qualcomm said it still expects to meet or beat analyst estimates of 88 cents a share. Shares of Leap slipped 5/8 to 23 3/16.
added 5/8 to 19 5/8 after reporting first-quarter earnings of 31 cents a share, above the eight-analyst estimate of 28 cents and up from 23 cents a year ago.
dropped 5 1/2, or 13%, to 36 13/16 despite reporting third-quarter earnings of 44 cents a share, in line with the 15-analyst estimate and up from 38 cents a year ago.
U.S. Xpress Enterprises
shed 3 1/9, or 35.2%, to 5 3/4 after saying it expects third-quarter earnings to fall to 12 cents to 14 cents a share, well below the current seven-analyst estimate of 36 cents.
Wolverine World Wide
slipped 3/16 to 11 1/8 after reporting third-quarter earnings of 28 cents a share, a penny shy of the six-analyst estimate of 29 cents and better than the year-ago 25 cents.
Offerings and stock actions
added 5/8, or 5.2%, to 12 9/16 after saying it will spin off its automotive rental business from its automotive retail business in the form of a tax-free dividend of shares of the new rental concern to its shareholders.
BroadVision jumped 8 5/8, or 7.1%, to 130 3/4 after it set a 3-for-1 stock split.
added 1/4 to 210 1/4 after it called a special meeting of holders as it seeks a 2-for-1 stock split.
added 1/8 to 17 1/2 after saying it plans to create a new tracking stock for its real estate portal
, and anticipates an IPO of the portal in the second quarter. Sarah Nolan was named CEO of CompleteHome.com.
was up 15 3/16, or 94.9%, to 31 3/16 in its trading debut.
Credit Suisse First Boston
priced the 5.5 million-share IPO above-range at $16 a share.
raised the expected share price of its IPO to $14 to $16 a share from $10 to $12 a share. The company sells software products and services for high-speed data exchange.
started coverage of five pharmaceutical companies.
added 15/16 to 64 3/16 and
added 3/8 to 64 11/16 after they received outperform ratings.
gained 1 5/16 to 66 13/16 ,
added 7/8 to 35 and
gained 2 1/4 to 65 after being added to the recommended list at outperform significantly.
gained 1 to 54 3/4 after
Warburg Dillon Read
raised it to strong buy from buy.
added 23/32, or 11.5%, to 7 after Warburg Dillon Read raised it to buy from hold.
fell 1/8 to 46 9/16 after
Donaldson Lufkin & Jenrette
cut its rating to buy from top pick.
Guidant gained 3 9/16, or 7.2%, to 53 1/4 after
added the stock to its Focus One list as a top medical-tech pick.
rose 1 1/16 to 29 1/16 after
raised its rating to attractive from neutral.
gained 1 3/8, or 5.1%, to 28 5/8after DLJ raised its rating to top pick from buy.
fell 3 to 120 3/8 after
Morgan Stanley Dean Witter
started coverage with an outperform rating.
added 3/8 to 32 13/16 after
started coverage by adding the stock to its recommended list.
was unchanged at 36 3/8 after
started coverage with a long-term buy rating.
added 3/4 to 29 after PaineWebber started coverage with a buy rating.
added 3 13/16 to 142 13/16 after news that it will join the
effective Oct.6, replacing
Johnson & Johnson
wrote about the news
rose 3/16 to 9 after it named Robert Bowman president and CEO, effective immediately.
Only eight months after paying $1.5 billion for it, drugstore chain
is pondering the sale of part of its
PCS Health Systems
reported. Rite Aid rose 11/16, or 5.1%, to 14 1/16.
Herb on TheStreet: Noticed How E-Tailers Appear to Be Pulling Out All Stops to Lure New Customers?
9/30/99 6:30 AM ET
In case you missed this column's twist on Wednesday's announcement that
is opening its Web site to anybody who wants to sell anything, click
E-tailer Offers:Tell us what you think on
Perhaps the most important part of that story wasn't the company's new concept, but whether the growth of Amazon's customer base has slowed. With one day left in the quarter, the company said it expected to have at least 12 million customers in the quarter. Of course, Amazon joined the ranks of e-tailers offering discount coupons, via email, to customers. In each case, the offer expired Sept. 30. (My favorite was
, which expires at 11:59 p.m. Sept. 30 -- enough time to book last-minute revenue.)
And how about
? In recent days it has been running radio ads offering free "harvest candles" -- a $25 value -- if you spend $49.99 between now and Sept. 30. Talk about cutting it close!
"secret sale" on
Seems like yet another example of e-tailers looking more and more like regular old retailers. In which case investors might want to be cautious, because retailers generally offer coupons for two or three reasons: When they're new and trying to build biz; when revenue isn't as revved as it used to be or when they're trying like heck to meet analyst estimates. Considering that most of the companies in question have more than one year under their belts, it would appear that none can claim they're new.
Not surprising, each company contacted said there was nothing unusual about the current round of couponing. "Routine," is how some put it. barnesandnoble.com CFO Marie Toulantis even said her company was comfortable with its quarterly numbers
it started with the coupons.
Maybe so; maybe B&N is merely trying to protect its turf against desperate predators. But whatever the reason, based on unsolicited reader email, nobody can remember ever seeing so many deals so late in the quarter in an industry that is supposed to be growing so fast. (The downside of going public; gotta look good for Wall Street!)
P.S.: Online book sales may be zooming, but for some reason the parking lot at that giant mega-
Barnes & Noble
by my home -- the one I
knocked not long ago for being out of stock on several books; the same one whose prices are higher than its online counterpart -- is
jammed! Either New Jersey hasn't yet discovered the Internet, or most people still prefer buying the old-fashioned way. I'd say it's a little of both.
Lernahooligan alert -- History repeating itself?:
Earlier this week
Lernout & Hauspie
issued a press release touting a speech-enabled Web browser. Sounds an awful lot like the same software rolled out almost four years ago by
, which at the time issued a press release touting "a speech-enabled Web browser" through a new joint venture with (who else?) Lernout & Hauspie.
The similarities don't end there: Quarterdeck's CEO at the time was none other than Gaston Bastiaens, who now runs L&H. Quarterdeck's contact on the old press release was Ellen Spooren, who now handles worldwide PR and IR chores for L&H.
Why bother bringing all of this up? Because the original software never did much of anything. Quarterdeck's stock, at the time of the rollout, was around 22. Bastiaens wound up leaving the company, after its stock sank as fast as it had soared. (Some say he was booted; he has insisted he wasn't.) Then, earlier this year, a hobbled Quarterdeck was sold to
for about 60 cents per share.
Now L&H appears to be resurrecting a new version of the same product, following in the wake of rivals
Is it really a retread? Why didn't it sell well the first time? Why did L&H lag its competitors in the rollout? Hard to say. L&H officials (Spooren, in particular) are continuing their blackout on answering questions posed by this column.
Shake, rattle and:
Cramer tried to ridicule me on the show last week when I made the comment that if his portfolio has been jarred by the Taiwan earthquake, what'll happen when one of those faults on either side of Silicon Valley decides to let loose. (Actually,
, including my wife, ridicules me on this one.) And while my comments may have seemed out of place in the context of what we were saying, they were enough to prompt reader
to write: "I would love to see an article/segment that addresses the tech companies' contingency plans for earthquake/natural disasters and the types of exposure
, etc. might have. With all the focus on macro topics like interest rates, the dollar and the like, it would be nice to know the potential impact of an earthquake and how the tech companies in the valley would address a natural disaster."
What I can tell you, T.B. (and I've looked into this) is that most of the large companies have detailed contingency plans. Many, in fact, have plants far from any epicenter. It's the smaller companies, which feed the big companies, that you've got to worry about. Much of Silicon Valley, in fact, is housed in squat one-, two- and three-story buildings known as a prefab cement tilt-ups, which many quake experts believe will collapse in a hard shake. The sheer disruption would likely cause enough turmoil to give tech-stock daytraders a quake of their own!
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.
Copyright 1999, TheStreet.com