TheStreet.com's MIDDAY UPDATE
December 3, 1999
Market Data as of 12/3/99, 12:56 PM ET:
o Dow Jones Industrial Average: 11,309.11 up 270.05, 2.45%
o Nasdaq Composite Index: 3,537.86 up 85.08, 2.46%
o S&P 500: 1,442.31 up 33.27, 2.36%
o TSC Internet: 1,020.29 up 43.09, 4.41%
o Russell 2000: 465.88 up 5.44, 1.18%
o 30-Year Treasury: 98 06/32 up 26/32, yield 6.262%
In Today's Bulletin:
o Midday Musings: Massive Rally Cheers Wall Street's Longs but Carries Complacency
o Herb on TheStreet: Action Performance a No-Show at Investment Conference
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Midday Musings: Massive Rally Cheers Wall Street's Longs but Carries Complacency
12/3/99 1:03 PM ET
An almost-deafening howl of optimism was exploding out of the market's mouth early this afternoon as major stock proxies were roaring to eye-popping heights.
juice for the market's rally was this morning's November
, which left Wall Street feeling confident that the
may not be forced to raised interest rates for a while. Bonds also rallied on the jobs report. The bond and stock markets were cheered in large part by news that
average hourly wages
rose less than economists expected, cooling inflation fears.
Join the discussion on
Average hourly earnings rose by 0.1%, the
reported. Economists were expecting average hourly earnings to rise 0.3%, according to a
poll. The weekly workweek was 34.6 hours.
The unemployment rate held steady at 4.1% in November, while nonfarm payrolls rose by 234,000. Expectations were for payrolls to rise 226,000 with the unemployment rate remaining at 4.1%, according to a
Nasdaq Composite Index
TheStreet.com Internet Sector
index were all trading in record-closing-high territory.
The Nasdaq Comp was up 85, or 2.4%, to 3538. The Nasdaq Comp closed yesterday at an all-time high, settling at 3452.78. Driving the Comp were Internet, telecommunications, computer, networking and financial stocks. The Comp has traded as high as 3553.56, an all-time intraday high.
The S&P 500 was up 33, or 2.4%, to 1442. The S&P 500 peaked earlier at 1447.42, an all-time intraday high.
TheStreet.com Internet Sector index was up 43, or 4.4%, to 1021. It has traded as high as 1031.56 so far during the session. That's an all-time intraday high.
Stocks were taking heart from the fixed-income side. The 30-year Treasury bond, which has been performing horribly lately, was up 22/32 to 98 3/32, yielding 6.27%. (For more on the fixed-income market, see today's early
Dow Jones Industrial Average
was up 272, or 2.5%, to 11,311, a little bit away from its all-time closing high of 11,326.04. The Dow has traded as high as 11,341.23 intraday. Technology and financial components were leading the blue-chip gauge higher.
were all posting chunky gains.
was up 6, or 1.2%, to 466.
Financials were on fire. The
Philadelphia Stock Exchange/KBW Bank Index
was up 3.8%, the
American Stock Exchange Broker/Dealer Index
was up 3.3%, the
NYSE Financial Index
was up 3% and the
S&P Insurance Index
was up 2.8%.
Peter Cardillo, chief strategist at
, said he sees the Dow heading to 10,400 to 10,600 and the Nasdaq Comp to 3650 by year-end.
The good news, he said, is that the economy continues to do well with low rates of inflation and "it appears the Fed is ahead of the curve. Be not afraid, I guess."
"I really believe the economy is slowing," Cardillo added. "I think the
stock market is ahead of the bond market" in that belief, because he thinks the bond market fears that the economy isn't slowing.
Volume was heavy on both the
New York Stock Exchange
Nasdaq Stock Market
, while breadth was positive (see below).
Greg Nie, chief technical analyst at
First Union Securities
in Chicago, said he's got a "bullish bent with a healthy dose of skepticism" on the market right now. The technician said he thinks the market can rally into the first part of next year, adding that the market taking "a timeout" would "enhance the probability" of that happening.
Nie said it's "very impressive action so far," but "let's see how the market closes." He said you "have to be impressed" with the way the market has charged to the upside today with strong volume and nice breadth on the Big Board.
The bullish feeling pouring forth from so many pores on Wall Street was likely making those who keep a close eye on contrary indicators less than at ease, however.
Chicago Board Options Exchange Market Volatility Index
is for the most part signaling that there's no fear out there. The VIX was down 11.9% to 20.52, a relatively low reading that smacks of complacency. Similarly, the CBOE equity put/call ratio was lately at 0.30, again showing that options traders are placing much bigger bets on the long side than on the short.
Among other indices, the
Dow Jones Utility Average
was up 1.1%; the
Dow Jones Transportation Average
was up 1.3%; and the
American Stock Exchange Composite Index
was up 0.3%.
New York Stock Exchange:
1,895 advancers, 1,039 decliners, 604 million shares. 89 new 52-week highs, 122 new lows.
Nasdaq Stock Market:
2,102 advancers, 1,711 decliners, 937 million shares. 234 new highs, 46 new lows.
Friday's Midday Watchlist
It was tough to find a stock that wasn't up today amid the rally that swept across the market after investors took the latest employment report as a green light. Among the top movers, on the Big Board, shares of
were jumping 9 5/8, or 6.7%, to 154 1/4 after
Donaldson Lufkin & Jenrette
raised its price target to 170 euros from 150 euros and repeated a top pick rating on the stock.
On the Nasdaq,
was at the head of the pack, flying 24 3/8, or 39.6%, to 87 1/4.
Mergers, acquisitions and joint ventures
climbed 1 1/4 to 49 1/4 after saying it would agree to sell its interest in its smaller rival
if its $884 million takeover offer is countered by a higher bid. NCL inched up 1/8 to 16 1/8. Including debt, the deal is valued at $1.7 billion. NCL Holding said that other firms have expressed interest in the company.
inched up 1/8 to 30 15/16 after saying it has started a $500 million, or $17.25 a share, tender offer for
. Shorewood rose 1 13/16, or 11.6%, to 17 1/2. Chesapeake had boosted its latest hostile takeover offer by 4% after Shorewood called its $16.50-a-share bid "grossly inadequate."
The betting among analysts and others is that
will not make a bid for
orange-soda business, the Heard on the Street column in
The Wall Street Journal
said. Last week, the French government blocked Pepsi rival
bid to buy Orangina. Pepsi, lately rising 1/4 to 36 15/16, will not discuss its plans, though a spokesman does not rule out the possibility of an offer, the column said. Shares of Coca-Cola lifted 1 1/4 to 68 11/16.
slipped 0.4% to 35 7/8 after announcing after yesterday's close that it will file by Christmas with the
Securities and Exchange Commission
board. Warner-Lambert inched up 5/16 to 89 7/16. Pfizer also said its court date with Warner has been postponed until Jan. 31, but that it still wants the Warner anti-takeover provisions lifted. Pfizer is trying to block Warner's proposed union with
American Home Products
. American Home climbed 1/8 to 51 1/4.
Republic New York
was killed after hooded attackers armed with knives broke into his Monaco apartment and set it on fire. Safra had just agreed to sell his interest in Republic and another bank,
, for $3 billion. The deal faced delays after a New Jersey money fund manager, who did business through Republic, sparked a probe at the bank after he was charged with scamming investors. In November, Safra agreed to accept $450 million less for his interest. Republic slipped 13/16 to 70 5/8.
, the Japanese investment company, has been in talks to buy a large stake in
, an electronic network for stock trading,
The New York Times
reported, citing people who have been briefed on the talks. The newspaper said Softbank has made a multimillion-dollar offer to buy the stake from
Datek Online Holdings
, which owns the fourth-largest online brokerage in the U.S. and about 85% of Island. But the talks have broken down and it's cloudy as to whether or not a deal will occur.
Earnings/revenue reports and previews
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
lost 1 13/16, or 16%, to 9 1/2 after it said it expects to post a loss for the fourth quarter. The seven-analyst estimate sees the company reporting a 17-cent profit.
dropped 3, or 36.1%, to 5 3/8 after it forecast a fourth-quarter loss of 27 cents to 33 cents a share, greatly missing the single-analyst estimate of an 11-cent profit. The company blamed the disappointing estimates on softer-than-expected demand in the fourth quarter.
hopped 9/16, or 7.2%, to 8 3/8 after it posted a 7.9% increase in November same-store sales.
tacked on 2 1/16 to 78 5/16 after it posted a 17% increase in November same-store sales.
Offerings and stock actions
climbed 3/8 to 53 5/16 after saying it plans to set a convertible subordinated notes offering for roughly $400 million to fund its purchase of Internet greeting card company
. In October, Excite@Home inked a $780 million cash and stock deal to buy BlueMountain.com.
popped 12 7/8, or 10.1%, to 140 3/16 after its board approved a 2-for-1 stock split.
raised its price target on
to a range of 115 to 120 from 90 to 95. Shares of Apple were gaining 3 9/16 to 113 3/4.
upgraded shares of
to recommended list from market outperform. BEA Systems climbed 9 7/8, or 10.2%, to 106 11/16.
rolled out coverage of
Countrywide Credit Industries
with a buy rating and a price target of 45. Countrywide Credit Industries added on 1 5/16 to 28 11/16.
rolled out coverage of
with a market perform rating. Eclipsys was bouncing 1 5/16 to 29 1/8.
Banc of America Securities
rolled out coverage of
with a buy rating and a price target of 130. Banc of America also set a fiscal 2000 earnings estimate of $4.30 and fiscal 2001 at $5. Shares of IBM were advancing 5, or 5%, to 110 5/8.
Credit Suisse First Boston
upgraded its price target on
to 78 from 60. Shares of Mips were hopping 4 13/16, or 8.5%, to 60 13/16.
Morgan Stanley Dean Witter
upped its rating on
99 Cents Only Stores
to strong buy from outperform. Shares of 99 Cents Only Stores were mounting 2 1/4, or 7.6%, to 31 3/4.
Deutsche Banc Alex. Brown
sliced its rating on
to buy from strong buy. Shares of TJX were sliding 5/8 to 20.
Credit Suisse First Boston late yesterday upgraded shares of
to a buy from a hold. Shares of StarTek were climbing 4 7/16, or 15.1%, to 33 13/16.
initiated coverage of
with a buy rating. TVAzteca was adding 1/2, or 8.4%, to 6 7/16.
was climbing 1 13/16 to 59 9/16 after it said it is examining strategies to increase its share price, including issuing a tracking stock related to its international or financial services business, selling assets or spinning off units, the
said after yesterday's close that it has retained New York-based investment bank
to advise it on the financial implications of a full range of potential remedies in the landmark
antitrust case. A Justice Department official made it clear that retention of the firm reflects no view by the department on whether the case would be resolved in court or through mediation. Microsoft shares were popping 1 5/8 to 96 7/16.
The Inside Wall Street column in
this week, penned by Gene Marcial, quotes
Donaldson Lufkin & Jenrette
analyst Peter Ruschmeier as saying that if
delays capacity expansion and instead buys back shares, the stock "can easily double." If the company doesn't do that, it's going to be tough for the shares to rally, "short of being acquired by a competitor,'' the column quotes Ruschmeier as saying. An unidentified money manager is quoted in the column as saying that a major paper concern "may make a pre-emptive bid, at around 23 a share" for beaten-up Louisiana-Pacific. The money manager also said that, based on fundamentals, Louisiana-Pacific is worth 18, according to the column. Louisiana-Pacific closed at 14 1/4 yesterday. Shares of Louisiana Pacific were falling 9/16 to 13 11/16.
has attracted an ATM equipment maker to talk about the possibility of a merger, the column reported, citing an investor close to the company. The column also said a big financial-services concern was also interested in buying an equity stake in the company, citing a corporate insider. In Cash Technologies' most recent 10-Q filing with the SEC, Bruce Korman, the company's chairman and CEO, disclosed that the concern was in talks for either a merger or the sale of the company, the column reported. Cash Technologies was edging up 1 1/4, or 9.3%, to 14 3/4.
Finally, the column serves up a bullish item on
. Shares of SBA were climbing 1 3/16, or 10.2%, to 12 3/4.
Herb on TheStreet: Action Performance a No-Show at Investment Conference
12/3/99 6:30 AM ET
Yesterday's 9% decline in the shares of
caused my assistant,
, to start sniffing around. The more he sniffed, the worse it smelled. What he learned was that Action and its
unit were supposed to make presentations last Tuesday at the
Ryan Beck Motorsports Conference
. They never showed, only leaving word of the cancellation -- with no explanation -- in a voice mail to Ryan Beck.
Ryan Beck analyst Dennis McAlpine, who has no recommendation on Action, says Action had given every indication that it would be attending the conference until it cancelled.
Herb's Latest: Join the discussion on
TSC message boards.
One explanation for Action's absence could be that its goracing.com subsidiary is in registration to go public. But it's been in registration for five months, and the offering is long overdue. What's more, it was in registration when it made a presentation back in September at a
Banc of America Securities
Of course, it was at that conference that Action made statements that ended up
backfiring, and now it's the target of two class-action lawsuits.
Officials at Action couldn't be reached, but this much we know: In general, it isn't a good sign when companies suddenly cancel out of investment conferences.
*Extra* edition of this column yesterday skewered
, for coming in
in lowering estimates for the company over Y2K concerns. That prompted Bear Stearns analyst Marina Jacobson to chide me in a phone call for not noticing that her report actually came out
Goldman's report. Or so she says: She wouldn't send us a time-stamped copy, but she says it came out on
at 7:29 a.m. EST, and we'll take her word for it; Goldman's didn't cross on First Call until 7:45 a.m.
To which I say: Sorry, and good for Bear Stearns for showing just how separate its research and investment banking departments apparently are. (Not enough of that these days.)
Meanwhile, back at the ranch: SFX's stock tumbled 19% on the analysts' actions. SFX responded by issuing a press release saying that it was "surprised and concerned at what it believes is an overreaction in the marketplace." The company also said that despite analysts' forecasts, it expects a strong fourth quarter. And get this: SFX said that while it "continues to try to be helpful and informative to all investors," it is also "in full agreement with the recent criticism of companies micromanaging to precise achievement of analysts' estimates." SFX may not be micromanaging analysts' estimates, but it does appear to be trying to micromanage its stock, no? (Quite frankly, I don't know what the company was really trying say in its convoluted statement. Maybe instead of hiring entertainers, the company should hire a few writers.)
SFX's CFO didn't return my call.
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
firstname.lastname@example.org. Greenberg also writes a monthly column for Fortune.
Mark Martinez assisted with the reporting of this column.
Copyright 1999, TheStreet.com