TheStreet.com's MIDDAY UPDATE
October 6, 1999
Market Data as of 10/6/99, 1:11 PM ET:
o Dow Jones Industrial Average: 10,521.85 up 121.26, 1.17%
o Nasdaq Composite Index: 2,851.57 up 51.90, 1.85%
o S&P 500: 1,320.24 up 18.89, 1.45%
o TSC Internet: 697.30 up 29.28, 4.38%
o Russell 2000: 429.28 up 3.27, 0.77%
o 30-Year Treasury: 99 17/32 up 9/32, yield 6.161%
In Today's Bulletin:
o Midday Musings: Market Romps in Gap Between Fed Decision and Jobs Data
o Wrong! Dispatches from the Front: Brokerages Take a Licking but Keep On Ticking
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Midday Musings: Market Romps in Gap Between Fed Decision and Jobs Data
10/6/99 1:11 PM ET
Stocks enjoyed a solid bounce as the market digested the
decision to leave rates alone for the time being but adopt a tightening bias. Traders decided there was just enough free time for a little play before Friday's
and the next batch of earnings.
Led by financial and technology stocks, major proxies were trending steadily higher. The
Dow Jones Industrial Average
was up 118, or 1.1%, to 10,518, while the tech-heavy
Nasdaq Composite Index
was up 52, or 1.8%, to 2852.
TheStreet.com Internet Sector
index was also enjoying a pop thanks to
, up 5.7% after a hand from
, which started the stock at a buy.
The bond market was rebounding nicely after yesterday's nasty selloff, deciding that, after all, a bias does not a rate hike make. The benchmark 30-year Treasury was up 5/32 to 99 14/32, its yield easing to 6.17%. (For more on the fixed-income market, see today's early
"After the initial shock, people pretty much saw that the writing was already on the wall," said Ross Kopfer, vice president of trading at
Robert W. Baird
. All the action and the selloff had been an anticipation of the Fed news, he said.
Recently battered financial stocks were getting a rest. The
Philadelphia Stock Exchange/KBW Bank Index
looked healthier and happier than it has in the past week, up 1.9%, with help from
, up 2.5%, and
, up 2.6%.
Despite the short-term jump, overall expectations remain low that the market will soon bounce outside the trading range its been stuck in for the last few weeks. "I don't think anything has changed. We seem to hit a bit of a ceiling around 10,500 on the Dow," said Brian Belski, chief investment strategist at
George K. Baum
in Kansas City, Mo. "We're not seeing the type of broader participation that is evident on the upswing."
Earnings will dominate the landscape for the next couple of weeks, predicted Belski, with various strong reports providing a periodic jostle higher, but he expects more volatility with a bias to the downside in the near term. His fourth-quarter outlook is brighter, however, particularly where tech and financials are concerned.
New York Stock Exchange
advancers were leading decliners 1,614 to 1,209 on 502 million shares, while on the
Nasdaq Stock Market
, leaders were beating laggards 1,953 to 1,680 on 642 million shares. New 52-week lows were outpacing new highs 95 to 36 on the Big Board, while new highs were leading new lows 92 to 74 on the Nasdaq.
was up 3 to 429, while the
was up 19, or 0.4%, to 1320.
Wednesday's Midday Watchlist
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
, head of Internet initiatives at
, is departing from the company to pursue other interests. The long-distance behemoth said plans to launch new broadband services, including cable telephony pilots in eight cities by year's end, nonetheless remain on target. AT&T said CFO Daniel Somers would fill Hindery's post until a permanent replacement is found. Shares of AT&T were up 1 to 46.
Separately, AT&T and
, through a joint venture, are buying
for $2.32 billion.
In addition, AT&T and
said they were teaming up to create e-business solutions for small and midsize businesses. Shares of IBM were slipping 1 1/16 to 120 15/16.
Mergers, acquisitions and joint ventures
was up 13/16 to 27 9/16 after it accepted a juicier $1.12 billion buyout offer from
, which was off 1 11/16 to 51 7/8. Phelps Dodge reached a pact last week to acquire
Cyprus Amax Minerals
, which was hopping 4 7/8, or 12.9%, to 41 15/16, and
pharmacy benefits division,
, set a pact between their Internet sites. Shares of Merck were mounting 1 7/8 to 72.
, which was climbing 1 1/4 to 99 1/8, along with
, which was bouncing 4 to 158 1/2, unveiled plans to launch wireless Internet service, starting with a three-month test run involving 1,000 mobile-phone users. The test will enable employees from five major corporations, including the
Credit Suisse First Boston
, to use their phones to check their email and other content on the Internet that can be adapted to fit a small mobile-phone screen. If all goes as planned, the companies will offer the service in early 2000.
Although German insurer
buyout talks with
Pimco Advisors Holdings
have reached an advanced stage, the negotiations could still fail,
reported, citing a source familiar with details of the talks. Pimco was adding 2 11/16, or 8.2%, to 35 7/16.
Earnings/revenue reports and previews
was sliding 3 5/8, or 5.5%, to 60 9/16 after it reported third-quarter earnings of 69 cents a share, in line with the 16-analyst estimate of 69 cents and the year-ago 61 cents.
was mounting 1 3/16 to 32 9/16 after it posted third-quarter pro forma earnings of 34 cents a share, a penny ahead of the 16-analyst estimate but down from the year-ago 37 cents.
Structural Dynamics Research
was falling 2 7/8, or 18.5%, to 12 5/8 after it warned third-quarter revenue will be about $109 million, less than the current analysts' consensus estimate of $116 million. The company said earnings, not including nonrecurring, acquisition-related charges, will come in around 12 cents a share, well below the six-analyst estimate of 30 cents.
was skidding 1/16 to 19 11/16 after it posted first-quarter earnings of 39 cents a share, beating the 16-analyst estimate of 38 cents and the year-ago 44 cents. The company also said that it has inked a deal to sell 10 hospitals.
was declining 1/16 to 29 5/8 after it reported first-quarter earnings of 15 cents a share, greatly missing the six-analyst estimate of 23 cents but up from the year-ago 10 cents.
Offerings and stock actions
was stumbling 3 1/8, or 5.25, to 57 5/16 after it said it had filed with the
Securites and Exchange Commission
for a 3.5 million-share offering.
was climbing 1 1/2 to 35 1/2 after it said it set a $1 billion share repurchasing program.
was bouncing 2 1/8, or 6.1%, to 36 7/8 after
Warburg Dillon Read
raised its rating on the shares to buy from hold.
was jumping 2 15/16 to 63 1/2 after
Donaldson Lufkin & Jenrette
upped its rating on the stock to buy from market perform. CS First Boston also raised the shares to a buy from a hold.
was declining 3/16 to 33 after
upgraded shares of the stock to buy from outperform.
was up 5/16 to 49 3/16 after
CIBC World Markets
rolled out coverage of the stock with a strong buy rating.
was soaring 8 1/2, or 5.9%, to 149 11/16 after
initiated coverage of the stock with a buy.
was sliding 5/16 to 33 3/16 after Warburg Dillon Read started coverage of the shares with a hold rating.
was leaping 7 3/4, or 23.95, to 40 13/16 after
upped its rating on the shares to buy from attractive.
also raised its rating on the shares to an intermediate buy from accumulate, while First Boston cut the stock to a buy from a strong buy.
was advancing 1 1/8 to 35 5/8 after Warburg Dillon Read upped its rating on the shares to a strong buy, while Credit Suisse First Boston raised the shares to a buy from hold.
was falling 1 11/16, or 6%, to 26 1/16 after
Morgan Stanley Dean Witter
lowered its rating on the shares to outperform from strong buy.
was climbing 3/16 to 33 while
was off 1/16 to 4 11/16 after Warburg Dillon Read initiated coverage of the stocks with buy ratings.
Salomon Smith Barney
raised its fourth quarter and fiscal 1999 estimates on
to 80 cents from 70 cents a share and $2.41 to $2.31 per share respectively. The firm also upped it fiscal 2000 estimate to $3.25 from $2.75 a share. Lexmark shares were jumping 4 15/16, or 5%, to 101 13/16.
was mounting 13/16 to 40 11/16 after Warburg Dillon Read initiated coverage of the stock with a strong buy rating.
was slipping 15/16 to 76 3/16 after CIBC World Markets cut its rating on the shares to a buy from a strong buy.
was decling 1/16 to 24 11/16 after PaineWebber sliced its rating on the shares to attractive from buy.
was climbing 1/16 to 17 7/16 after Warburg Dillon Read cut its rating on the stock to hold from strong buy.
was slipping 5/8, or 5%, to 11 5/8 after
lowered its rating on the stock to market performer from market outperformer.
was popping 3 7/8, or 6.5%, to 62 3/4 after
Deutsche Banc Alex. Brown
lowered its rating on the shares to market perform from market out perform
Sunrise Assisted Living
was plummeting 11 11/16, or 47.75, to 12 7/8 after PaineWebber lowered its rating on the shares to neutral from buy.
also downgraded the shares to market perform from a buy, while DLJ and Merrill Lynch also cut the shares.
was unchanged at 85, while
was climbing 2 9/16, or 5.6%, to 47 7/8, after Merrill Lynch initiated coverage of the stocks with near-term accumulate ratings.
was up 15/16 to 36 13/16 after Warburg Dillon Read rolled out coverage of the shares with a buy rating.
was hopping 1 7/16 to 51 15/16 after its Chairman and CEO Richard Huber said industry leaders and corporate customers will meet to discuss an approach to handling HMO lawsuits,
The Wall Street Journal
was jumping 4 3/8 to 117 15/16 after it said it would create a custom AOL message service for
. Lycos shares were mounting 4 13/16, or 8.4%, to 61 9/16.
was up 1/8 to 65 1/2 after its Vice Chairman Harry Pearce refuted analysts reports that the company has plans to break off its
division in the near future, the
was up 11 1/8, or 5.7%, to 205 15/16 on word of regulatory approvals on four continents for its satellite phones.
was down 1/16 to 51 1/16 after it announced plans to launch the Wal-Mart credit card, which will be administered through
, in September.
Wrong! Dispatches from the Front: Brokerages Take a Licking but Keep On Ticking
James J. Cramer
10/6/99 10:48 AM ET
You may hate the brokerage stocks, but you have to marvel how they act today in the face of terrible news. First, the "Heard on the Street" column takes dead aim at the group. It talks about hidden losses and terrible bond markets, the type of heat that usually causes some dislocations.
, which has historically spoken highly about the industry, rolls out some damaging coverage, including underperforms on
. Ouch, those usually inflict mortal damage on stocks. And what happens? Well, you have a screen. Take a look. These stocks are acting well. Heck, they are all up.
For me, that's cause for taking another look-see at a hated group. In fact, I even beeped
, who is at the
presentation/lovefest and said that the ability to shake off bad news in the brokerages might mark an important short-term bottom.
I know you take your life into your hand when you talk about a bottom in this group, but let's face it, there is a massive amount of negativity built into these stocks. Hmmmm.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long CBS. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at
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