TheStreet.com's MIDDAY UPDATE
December 6, 1999
Market Data as of 12/6/99, 1:07 PM ET:
o Dow Jones Industrial Average: 11,274.25 down 11.93, -0.11%
o Nasdaq Composite Index: 3,559.54 up 38.91, 1.11%
o S&P 500: 1,428.24 down 5.06, -0.35%
o TSC Internet: 1,046.76 up 18.22, 1.77%
o Russell 2000: 467.50 up 2.92, 0.63%
o 30-Year Treasury: 98 11/32 up 7/32, yield 6.240%
In Today's Bulletin:
o Midday Musings: 'Pullbacks Are for Wimps!' Cries Nasdaq, Building on Gains
o Herb on TheStreet: Finally, Greenberg Shares His Views on the Market
We've got lots of lists today. Cramer's B2B league is going strong, the Red Hots boards are hopping and we introduce "TSC's Top 25 Hit Stocks" board where you can discuss the companies behind the past week's most accessed tickers. Plus, revisit our "Countdown: A Century of U.S. Business The 100 Biggest Events." Check out these great boards and more at http://www.thestreet.com/talk/
Then chat with John J. Edwards III on AOL's MarketTalk at 3:30 p.m. EST. MarketTalk is hosted by Sage Online. (Keyword: PF Live)
Also on TheStreet.com:
Wrong! Dispatches from the Front: The Drugs Are Downright Dull
Usually, December is a hot month for this sector -- but not this year.
Online Brokers: Softbank Stake May Muck Up E*Trade-Telebanc Merger
An online merger won't happen until the Office of Thrift Supervision is satisfied.
Telecom: Track Meet: AT&T Move on Tracking Stock Could Open the Floodgates
The newly popular option of issuing tracking stock could sweep Wall Street if AT&T nods.
Dear Dagen: Dear Dagen: Price War May Be in the Offing for Index Investors
Barclays is expected to undercut the expenses of Spiders.
Midday Musings: 'Pullbacks Are for Wimps!' Cries Nasdaq, Building on Gains
12/6/99 1:01 PM ET
After a run like
Friday's, stocks are supposed to take some sort of break, a little pause before they go higher. And stocks on the
New York Stock Exchange
have pretty much stuck by that idea today.
For four-letter issues, on the other hand, it's a very different story.
"Stocks are taking a little rest as far as the
are concerned," said Dick Dickson, technical analyst at
Scott & Stringfellow
in Richmond, Va. "The
-- what can I say? Trees grow to the sky. I hope you're not asking for an explanation, because I don't have one."
Outside of the
Nasdaq Stock Market
, "it's a quiet day with some profit-taking," said Jim Volk, co-director of institutional trading
in Portland, Ore. "It's pretty much a company-specific day." So traders like Volk are watching things like
, where Chairman and CEO
has resigned, and
, where a couple of key executives picked up stakes and left.
Dow Jones Industrial Average
was lately off 21 to 11,265, while the S&P 500 was down 6 to 1427.
Nasdaq Composite Index
was up 32, or 0.9%, to 3553, powered by
, among others.
TheStreet.com Internet Sector
Index was up 16, or 1.5%, to 1044.
was extending its push into record territory, lately up 21 9/16, or 8.5%, to 274 9/16.
was steaming higher as well.
was up 3 to 468.
Not so long ago, people were talking about how stocks were going to have to take a break here, dip at least 2% or 3% before heading higher. People envisioned some sort of last-minute Y2K selling creating a bit of a pullback. That certainly isn't out of the question anymore -- but you sure hear a whole lot less about how that's going to happen.
"I don't see the market backing off a lot before now and the end of the year," said Volk. "Right now, the conventional wisdom is that there's nothing to hurt the economy, and for that reason your safest bet is equities."
"I was looking for a pause last week," said Dickson. "I was thinking we'd have some profit taking the first week or 10 days of December. No pause. It just keeps on going."
Dickson still does have a hard time envisioning the market continuing to run higher through the month without incident.
"I suspect that somewhere in the next couple of weeks we hit a pothole and see some selling," he said. With the Nasdaq up more than 60% on the year, "you've got to think there's going to be some profit-taking somewhere. Unless people think, 'It's never coming down, new money's coming in January, I can't afford to be out.'"
These days, that's exactly what people seem to think.
Bonds were firmer. The 30-year lately was up 6/32 to 98 13/32, its yield easing to 6.24%. (For more on the fixed-income market, see today's early
Breadth was mixed on healthy volume.
New York Stock Exchange:
1,216 advancers, 1,715 decliners, 515 million shares. 91 new 52-week highs, 143 new lows.
Nasdaq Stock Market:
1,879 advancers, 1,948 decliners, 775 million shares. 240 new highs, 58 new lows.
Monday's Midday Watchlist
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
Coca-Cola dropped 3 5/16 to 65 after it said Chairman and CEO Douglas Ivester, 52, plans to retire in April 2000 after the annual meeting. The company said Douglas Daft was elected president and COO at a special meeting yesterday, and would succeed Ivester as chairman and CEO.
Ivester took the reins of the Atlanta-based company two years ago. During that time, a contamination scare in Europe last summer prompted a massive product recall, and proved to be the worst tainted-product episode in Coke's history.
Daft, 56, has been at Coca-Cola since 1969. For much of his career, he served in planning, marketing and operations positions in Asia.
Mergers, acquisitions and joint ventures
was unchanged at 30 after it said it bought Japanese steering-wheel maker
and that the acquisition would have a small positive impact on earnings.
bounced up 9 1/16, or 7.9%, to 124 1/2 after it formed a strategic alliance with
where IXL will use BEA's suite of e-commerce transaction servers. Shares of IXL gained 1 1/16 to 39.
Credit Suisse First Boston
upped its rating on BEA to strong buy from buy.
slipped 1/4 to 29 after it agreed to acquire
Card Payment Systems
, a reseller of payment processing services, for 6.2 million common shares. At Friday's closing price of $29, the transaction is valued at about $179.8 million.
fell 1/4 to 45 after it said it will install and support
Linux operating systems on all of its PowerEdge server models. Shares of Red Hat popped 19 1/8 , or 9.6%, to 219 1/4. The deal includes worldwide service and support to its Linux offerings, extending an agreement between the two companies.
inched up 3/8 , or 7.2%, to 5 9/16 after it said it expanded its fungal drug pact with
, which was lately falling 2 3/4, or 5.4%, to 4 13/16.
tacked on 1 1/8, or 66.7%, to 2 7/8 after it announced the completion of a deal that supplied
NEC Do Brasil
with TCSI's SolutionCore telecom application.
sagged 3 1/4, or 6%, to 57 1/4 after it said it was in an early stage of merger talks with
, a British pay-television company.
fell 3/8 to 16 15/16 after saying it was unable to reach a definitive pact to sell its pork group to
. Smithfield rose 5/16 to 25 3/8. Tyson said it doesn't expect the development to hurt its fiscal 2000 results and will continue to explore options related to its pork operations.
fell 1 1/4, or 6.9%, to 17 after it said it would sell
for $780 million. For additional coverage of the
Ziff-Davis sale, check out a separate story from the
Earnings/revenue reports and previews
Investors got stingy with
after the company said a prolonged fare war in the airline industry will hurt its fourth quarter. Shares dropped 4 7/8, or 26.7%, to 13 3/8. The company said it sees fourth-quarter earnings at about 2 cents a share, compared with the year-ago loss of 3 cents a share. The current four-analyst estimate calls for earnings of 4 cents a share.
shed 20 3/4, or 61.9%, to 12 3/4 after it said it expects a decline in 2000 earnings and revenue because of a change in demand for two pharmaceutical ingredients under a 1997 supply agreement with
. Chirex said revenue would decrease by $28 million for the year. Glaxo lost 1 1/8 to 58 13/16.
fell 1/4 to 26 13/16 after it said it will spend $9.8 billion on its power development and expansion of nuclear operations over the next five years as its markets become open to competition. Entergy said it will combine its Entergy Power Marketing and Entergy Power Group into a single entity in 2000. The company also confirmed it sees 2000 earnings-per-share estimates within a range of $2.35 to $2.45, roughly in line with the 15-analyst estimate of $2.38 a share.
shed 4 5/16, or 21.3%, to 16 1/4 after it reported third-quarter earnings of 24 cents a share, in line with the 15-analyst estimate and up from the year-ago 18 cents a share, excluding charges. Kroger said it sees fourth-quarter earnings between 37 cents and 40 cents a share, possibly trailing the 13-analyst estimate of 40 cents a share. Kroger also said Vice Chairman and COO Robert Miller had resigned to take over as chairman and CEO of troubled drug store chain
(see item below). Kroger said it was comfortable with achieving previously projected annual EPS growth of 16% to 18% beginning in fiscal 2000. The company also said it will begin repurchasing its common stock in order to reduce dilution from its employee stock option plan.
dropped 9 5/16, or 26.5%, to 25 7/8 after it said it sees fourth-quarter earnings-per-share between 52 cents and 54 cents, below the 21-analyst estimate of 59 cents a share. The company also warned it expects 2000 earnings of $2.30 to $2.35 a share, missing the 22-analyst estimate of $2.45 a share. For more on U.S. Bancorp, check out additional
Offerings and stock actions
made it official, announcing plans to create a new wireless company,
AT&T Wireless Group
, and a new class of AT&T stock that will track the performance of the business. AT&T plans to conduct an IPO of the wireless tracking shares in the spring.
AT&T also announced the appointment of Daniel E. Somers as president and CEO of AT&T Broadband and Internet Services. Also, Rick Roscitt, president and CEO of AT&T Solutions, will become president of AT&T Business Services and will lead all AT&T units focused on the business market, including AT&T Solutions. In a story
took a look at tracking stocks.
AT&T also "outlined its commitment" to give customers a choice of Internet service providers over the company's broadband cable and fixed wireless systems. The company said it outlined details of the "commitment" in a letter sent today to
Federal Communications Commission
Chairman William Kennard, which was co-signed by AT&T's general counsel and
Vice President David N. Baker.
The Wall Street Journal
Salomon Smith Barney
analyst Jack Grubman's upgrade of AT&T to buy from neutral last week may help the brokerage firm's chances of underwriting the wireless tracking stock offering. Sanford Weill, co-chairman of
, the parent of Salomon, and a board member of AT&T, nudged Grubman, who has been less than bullish on AT&T's stock for some time, to take another look at AT&T, the
, in the Heard on the Street column, reported. Grubman is quoted in the Journal as saying: "No one tells me what to do." Shares of AT&T were edging up 1 1/16 to 58 1/16.
started coverage of
by adding the company to its U.S. recommended list.
Morgan Stanley Dean Witter
also initiated coverage with an outperform rating and a price target of 29, while
started the stock as near- to long-term accumulate.
Donaldson Lufkin & Jenrette
started coverage with a buy recommendation. Despite the positive comments, shares of Charter Communications were falling 7/8 to 25 1/2.
DLJ raised its rating on
to buy from market performer. Shares of Clorox were adding on 2 11/16, or 5.7%, to 49 1/2.
DLJ started coverage of
with a buy recommendation while
U.S. Bancorp Piper Jaffray
initiated coverage with a strong buy rating and a price target of 23. Data Critical shares were gaining 3/8 to 14 3/8.
started coverage of
with a buy rating. Shares of ebookers.com were slipping 1 1/4, or 5.2%, to 22 3/4.
Morgan Stanley Dean Witter
started coverage of
as an outperform. Shares of Expedia were plummeting 4 1/8, or 7.6%, to 50 1/8.
Credit Suisse First Boston started coverage of
as a strong buy and set a price target of 54. Shares of Houghton Mifflin were mounting 13/16 to 39 11/16.
U.S. Bancorp Piper Jaffray started coverage of
with a strong buy rating and a price target of 58. iBasis was off 1 7/8 to 38 1/16. >
First Boston started coverage of
with a buy rating and a price target of 85. Shares of Next Level were climbing 4 1/2, or 6.8%, to 71.
Salomon Smith Barney
raised its earnings estimates on
for 2000 to $2.90 from $2.75 and in 2001 to $3.75 from $3.42. Salomon said that "at a minimum" Nokia could trade at 60 times forward earnings, indicating that Nokia's stock could -- within the next six months -- "exceed" 225. Shares of Nokia were soaring 14 7/16, or 8.95, to 176 5/16.
rolled out coverage of
PSS World Medical
with a near and long-term accumulate ratings. Shares of PSS World were unchanged at 45 3/4.
Credit Suisse First Boston reinitiated coverage of
with a buy rating and a price target of 70. Shares of Seacor Smith were bouncing 1 3/8 to 53 3/8.
Rite Aid was advancing 2 15/16, or 36.3%, to 11 1/4 after it chose a new top management team, naming Robert Miller as chairman and CEO. Miller was formerly COO at Kroger and a former CEO at
. Mary Sammons was named president and COO, while John Standley was named CFO and executive vice president. Rite Aid also said
Deloitte & Touche
is its new auditing firm.
American Business Products
was up 1, or 9.5%, to 11 1/2 after it named Harold Smethills as CEO, president and a board member, succeeding acting CEO Daniel McGlaughlin. Smethills was recently chairman of Hill Equities, a private investing and consulting firm he founded in 1995.
was bouncing 9/16 to 18 5/16 after it received marketing clearance from the
Food and Drug Administration
for its Hyprid Capturer II Gonorrhea Test.
was sliding 3/8 to 33 after it said it has finished relocating its headquarters to suburban Chicago, ending its operations in Greenwich, Conn. The relocation, which cuts its headquarters workforce by 40%, would save the company more than $30 million starting in 2000.
Louis Dreyfus Natural Gas
was up .51% to 18 after it said it plans to more than double its 2000 exploration and development budget over this year's $210 million.
was hopping 1 3/8, or 5.3%, to 27 3/8 after it named John McGovern CFO.
Herb on TheStreet: Finally, Greenberg Shares His Views on the Market
12/6/99 6:30 AM ET
What has happened to me? That's all I can think about these days. Where's the old skeptic? Where's the old bear? Where's the dubious Greenberg whose skeptical writings on the market, thanks to some of the most bearish and most sensible prognosticators I've ever known, would've had you stuff your money under a mattress for the rest of the millennium?
Surely, this must be
sign of the top when Greenberg appears to be bullish.
Or am I? (Never mind that I'm merely a messenger who
get to pick which messages he wants to deliver.)
I got to thinking about that this weekend when two things happened: The first was Saturday when a buddy left a message to say he had watched "TheStreet.com" on
Fox News Channel
and that it was so bullish, it was surely a sign of a top if there ever was one. The second was Sunday when I read
Cutting Room about the show, and he said that nobody on the show was a bear.
. That means not even me!
Sure, there I was playing a mini-grinch when I read that old adage about the market: "If Santa Claus should fail to call, bears may come to Broad and Wall." But I didn't point out that a "Santa rally" is officially defined (thank you Yale Hirsch's
Stock Market Almanac
) as a rally that occurs in the last five days of the month -- not the first five. And I didn't point out that Santa failed to arrive 10 times in the past 46 years, and of those, the bear markets of 1957, 1962, 1966 and 1977 were not preceded by a visit from Santa. (A good, dyed-in-the-wool skeptic would've surely pointed that out!) I also didn't jump all over Cramer, as I should have, when he brought up that nonsense that there has been speculation that
might split its stock. I should've hammered him, but I didn't, just as I don't hammer him or anybody in my column when it comes to the market.
Herb's Latest: Join the discussion on
TSC message boards.
Don't know if you've noticed, but my column rarely, if at all, gets into market logic anymore. One reason is that we have a staff that does that. There are
and the market goonies. And there's the
, who makes a daily point of it. And then there are Cramer and
and all of the other commentators on our site -- all of them smart, and so many of them disagreeing with one another.
Oh, and then there's me: I'm the guy who wrote an article in
a few years suggesting that the
long rally was over. (The only difference, I noted, was that
rally lasted longer than all the others.)
It made sense at the time!
And that's my point. Anything and everything makes sense at some point. If I can tell you the number of times over the past decade that sensible people have told me that either "this" or "that" were signs of a top, and that this market has got to come tumbling down, I'd be too busy counting to write. "I've never seen anything like this." "It's getting scary." "One day the market will dip and keep on dipping!" Over and over, that's all I've heard and it has made fabulous copy.
But reality is that it has been wrong.
, and I stress
, can say with any certainty what will happen to this market. And most old-fashioned indicators are wrong. There was the 3% dividend rule -- that stocks will fall when the dividend rate falls below 3%. How many years ago was that? And the list of new-lows rule: that the market will fall if and when the list of new lows in the newspaper gets longer than 12 inches. (A good sign for traders, maybe, but not investors.) And there's the Greenberg rule: When I go one way, you should go the other!
on Fox TV producer, says we're gonna talk about the market, he knows that my reaction will always be the same:
but that. What the market did or will do bores me. It's a ticking time bomb. We all know that. But nobody knows the time on the clock! Cramer, the trader, can talk about the market as if it's a sport, and it is. (Another sign of a top?!) But at least with a sport there are odds.
Oh, I know that the market has become today's most popular pastime. I know it's all
is talking about. (Me, too, I just think it's mindless.) I also know that the argument about liquidity, and all of that money flowing into the market through 401-K plans, is a strong one. And I know that as long as interest rates remain low and the economy remains prosperous -- or
to remain prosperous -- different segments of this market will continue to cook. (I really do believe in that improved productivity thing that the Internet has created. As recently as three years ago, I -- as a financial journalist, in need of lots of info and data -- never could've worked at home as often as I do now. Makes me three hours more productive per day, and a heck of a lot happier, because that's three hours I'm
I also know that there's a growing credit risk, as so many people buy way too much, from socks to stocks, on credit. (It's the stock part that has me worried.) I can't buy the "no inflation" story when oil prices and housing prices continue to soar. And I know I have a responsibility to continue reminding investors that at some point this party will end, just like all of the rest.
But (sorry, it must be the debater in me) I also have learned that trying to determine what
market may do is the ultimate exercise in futility. Which is why I concentrate on individual companies.
Bottom line, as I often say, is that whoever is quoted in the right place at the right time calling the market right will be the next guru.
Abby Joseph C.
is queen for
day. And me? I'm neither bullish nor bearish. I'm ambivalent. Couldn't really give a hoot. That may not make for good copy, or good TV, but I also can sleep at night. Better things to do with my time, like look for the B2B frauds.
Your thoughts on market commentary? Don't email me, post it on my
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.
Copyright 1999, TheStreet.com