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midday12-08-99's MIDDAY UPDATE

December 8, 1999

Market Data as of 12/8/99, 1:05 PM ET:

o Dow Jones Industrial Average: 11,097.78 down 8.87, -0.08%

o Nasdaq Composite Index: 3,601.64 up 14.72, 0.41%

o S&P 500: 1,410.23 up 1.06, 0.08%

o TSC Internet: 1,072.42 up 13.55, 1.28%

o Russell 2000: 467.18 up 1.48, 0.32%

o 30-Year Treasury: 98 25/32 down 6/32, yield 6.212%

In Today's Bulletin:

o Midday Musings: The Song Remains the Same -- Techs Rocking, Nasdaq Rolling
o Herb on TheStreet: More on Ancor and Checking Back on MedImmune

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Midday Musings: The Song Remains the Same -- Techs Rocking, Nasdaq Rolling


Eileen Kinsella

Staff Reporter

12/8/99 1:17 PM ET

Major proxies were on the upswing again, following the fearless lead of techs. The

Nasdaq Composite Index

was gunning for a fifth-consecutive record while the

Dow Jones Industrial Average

was looking to regain some of yesterday's lost ground.



was noticeably quieter today, down 9.5%, after the stock woke up with a mild hangover off yesterday's 24% jump in share price. The Internet media behemoth waltzed into the

S&P 500

with a whopping $91.6 billion market capitalization that scored it a 31st-place ranking compared with the market caps of the other 500 components -- $20 billion of that massive value was poured on yesterday when the stock jumped 67 1/4.

Even with a more than 30-point loss today, the stock is still in abnormally good shape and remains one of the most active issues on the



The Nasdaq Comp was up 23.91 to 3610.83, while Internet Sector

index was also on the rise, lately up 21.28 to 1080.15, despite the unusual, and increasingly unheard of, negative action in Yahoo!.


was picking up some of the slack, lifting 5%, after a double dose of good news including positive research rating and an agreement with

Sprint PCS



For more on the deal, take a look at the

story written this morning by

joint newsroom.

"Yahoo is coming off a bit, which is to be expected. But the techs are going to act well through year-end. It's not in any of their interests to see any kind of selloff," said Robert Harrington, co-head of block trading at


. Harrington concedes there is a correction "at some point," in the future. "I just don't see it happening in December. The money keeps chasing the top-line growth in Internet companies," he said.

But others see the increasing absence of breaks in the tech run up, and particularly in the Comp, as troublesome. In a research report today, Brian Belski, chief investment strategist at

George K. Baum

, described this past week's "backing and filling" in the Dow and S&P a trading pattern with "healthier implications," compared to the Nasdaq's continued upside extension. "If the current dislocation between the two factions (DJIA/SPX vs. COMP) continues to exist, the more likely that the COMP will indeed undergo a sharp pullback of its own," wrote Belski. He advised aggressive growth investors to do more "bottom fishing than new-high chasing."

Though it may seem otherwise these days, there actually is a life outside of tech companies in the stock market. The Dow, rising 10.40 to 11,117.05 was being helped along by a rise in paper stocks , with

International Paper


up 3.2%. Component

General Electric


was also helping out with a 1.3% gain.

Telecommunications stocks were showing some strength with the

Nasdaq Telecommunications Index

up 1.4%. The S&P 500 was inching up 2.99 to 1412.16, while the small-cap

Russell 2000

was fighting to keep a grip on its 1.34 gain.

Oil prices were still sliding, following a weekly

American Petroleum Institute

report which showed an unexpected 8.7 million-barrel jump in stocks of gasoline. January crude oil futures fell more than 70 cents and were fighting to stay around $25.50 in mid-morning. The

American Stock Exchange Oil & Gas Index

was off 3.98.

The drop in oil prices was giving airline stocks and other transports a lift. The

American Stock Exchange Airline Index

was up 0.6%, while the

Dow Jones Transportation Average

was up 1.1%.



, parent of

American Airlines

, and a component of both indexes, was rising 1.8%.

Breadth was leaning to the negative side on the

New York Stock Exchange

, with laggards beating leaders 1,791 to 1,129 on 500 million shares. On the Nasdaq decliners were beating advancers 2,126 to 1,741 on 897 million shares. New 52-week lows trounced new highs 265 to 69 on the Big Board, while on the Nasdaq, new highs were the champs, leading new lows 248 to 80.

The benchmark 30-year Treasury was down 9/32 to 98 21/32, its yield at 6.215.

Wednesday's Midday Watchlist

By Tara Murphy
Staff Reporter


Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.


Mergers, acquisitions and joint ventures and Sprint PCS Group said they are offering online shopping at Amazon from Internet-ready Sprint PCS phones.

ING Barings

started coverage on Amazon with a strong buy rating. Shares of were climbing 4 9/16, or 5.3%, to 90 3/4, while Sprint PCS shares were jumping 5 1/16, or 5.3%, to 99 3/8.



said it will sell its Ohio cable operations to



for $1.53 billion. Cablevision said the deal will be composed of $990 million in cash and $540 million in Adelphia Class-A stock. Cablevision said it will continue to evaluate options for its Massachusetts and Kalamazoo, Mich., operations. Shares of Cablevision were adding 3/4 to 76 1/4, while Adelphia was falling 1 3/4 to 56 13/16.




State Street


agreed to form a joint venture called


, which they said will provide services for in part defined-contribution, pension and health and welfare plans. Shares of Citgroup were slipping 1 5/16 to 55 7/8.

Digital Island



Sun Microsystems





announced a pact designed to accelerate Web site performance for consumers and e-business Web sites. Shares of Digital Island were soaring 55 1/8, or 79.4%, to 124 1/2, while Sun Micro was hopping 4 5/8, or 6.2%, to 76 11/16. Inktomi was bouncing 9 1/4, or 5.6%, to 172 7/8.






announced a strategic pact "to develop and market end-to-end solutions for the wireless Internet." The companies will form a joint company -- of which Ericsson will own a majority stake -- to market and deliver mobile e-mail solutions for network operators. Shares of Ericsson were lifting 7 1/2, 12.7%, to 66 1/4, while Microsoft was adding 3/16 to 93 3/16.



said it will acquire Fremont Financial from

Fremont General


for $765 million in cash, which includes debt. Finova said the deal would be accretive to its 2000 earnings. Finova shares were sliding 9/16 to 34 7/8, while Fremont General was tacking on 1/8 to 5 3/8.

Media General


said it has agreed to a $605 million merger with

Spartan Communications

. Media General shares were down 3 to 47 1/4.




Forstmann Little

will invest $850 million in the company in the form of convertible preferred stock. Nextlink said the investment represents 8% of its fully diluted shares. Shares of Nextlink were leaping 6 3/4, or 12%, to 62 9/16.

Ravisent Technologies


set a pact with

MindSpring Enterprises


, an Internet service provider, to deliver an Internet appliance that will allow consumers to access the Internet without a computer. Customers using the Ravisent product will use their TV screens to surf the Net, read and send email, among other things. Under the terms of the deal, Ravisent will offer its Internet TV appliance at a "subsidized, competitive price" to those who subscribe to two years of MindSpring's service. Shares of Ravisent were adding on 7 13/16, or 31.3%, to 32 13/16, while MindSpring was gaining 1 3/4 to 38 1/8.


said it planned to sell its entire cable and fiber optic business to



for about $1.4 billion. Siemens said it would transfer business activities comprising 3,300 employees to Corning on Feb. 2, 2000. Shares of Corning were climbing 1 1/4 to 106 9/16.



said it entered into a three-year agreement with

America Online


in which Telescan will add its stock screening and portfolio analysis tools to AOL's personal finance channel. Shares of Telescan were advancing 1 to 29 5/8.

Earnings/revenue reports and previews

Commercial Intertech


was losing 1/8 to 11 7/8 after it posted fourth-quarter earnings of 44 cents a share, beating the two-analyst estimate of 43 cents but down from the year-ago 62 cents a share.

Korn Ferry International


was mounting 3 1/2, or 14.5%, to 27 5/8 after it reported second-quarter earnings of 17 cents a share, beating the four-analyst estimate of 15 cents, and the year-ago loss of 1 cent a share.

Warburg Dillon Read

initiated coverage of Korn Ferry with a buy rating and a price target of 31.

Land's End


was slipping 15 5/16, or 26.5%, to 42 7/16 after it said November same-store sales were down about 18%, a larger-than-expected decline.

has been following this

story. Jim Cramer also

weighed in on the company.

New York Times


was rising 4 3/8, or 10.4%, to 46 1/8 after it said it was comfortable with the current consensus earnings estimate. The 12-analyst estimate for 1999 currently calls for earnings of $1.72 a share.

Offerings and stock actions

Global Crossing


was gaining 3/8 to 47 7/8 after it said its set a $500 million offering in convertible preferred stock.

Bristol-Meyers Squibb


was adding 1 3/16 to 67 7/8 after it said its board approved a $2 billion increase in its share-buyback plan.


was climbing 13/16 to 53 after its board approved a 2-for-1 stock split.



was bouncing 1 to 33 after it declared a 3-for-2 stock split.

Pegasus Systems


was gaining 2 7/16 to 68 1/2 after it said its board approved a 3-for-2 stock split. Pegasus's transfer agent will distribute the additional shares on or about January 7, 2000, to shareholders of record at the close of business on December 20, 1999.

Analyst actions

Deutsche Banc Alex. Brown

cut its rating on

AK Steel Holding


to buy from strong buy. Shares of AK Steel Holding were slipping 1 1/16, or 5.8%, to 17 3/16.

Donaldson Lufkin & Jenrette

started coverage of



as a market performer. Shares of BancWest was losing 1/8 to 43 1/16.


upped its rating on



to significant outperformer from outperformer and set a 12-month price target of 76. Shares of Coke were advancing 1 5/16 to 60 5/16.

DLJ raised



to a top pick from a buy. Shares of Cigna were mounting 3/8 to 79 1/2.

Warburg started coverage of



with a buy rating and set a price target of 16. CVC shares were climbing 11/16, or 5.4%, to 13 5/16.

Goldman Sachs

raised its rating on

Dollar Thrifty


to trading buy from market outperform. Shares of Dollar Thrifty were bouncing 9/16 to 21 13/16.

Merrill Lynch's

Henry Blodget initiated coverage of

Exodus Communications


with an intermediate-term buy rating and put a 200 price objective on the stock. The long-term rating is also buy. Shares of Exodus were soaring 22 13/16, or 15.9%, to 167 3/4.


cut its earnings estimate on

Fort James


to $2.43 from $2.60 per share. Shares of Fort James were slipping 3/16 to 27 1/2.

Alex. Brown cut its rating on

General Motors


to market perform from buy. General Motors was adding 1 1/18 to 73 3/4.

SG Cowen

rolled out coverage of


with a buy rating. Shares of were losing 1 1/2, or 6.75, to 20 3/4.





to buy from accumulate. Shares of Knight/Trimark were skidding 1 1/4 to 43 13/16.

Morgan Stanley Dean Witter


Sealed Air


to strong buy from outperform. Shares of Sealed Air were gaining 3 1/16, or 6.7%, to 48 3/16.

Goldman Sachs sliced its rating on

Millennium Pharmaceuticals


to market outperform, removing the stock from its recommended list. Millennium was stumbling 5 1/2 to 105 1/8.

Merrill Lynch upped its intermediate-term rating on

Stillwater Mining


to buy from accumulate. Shares of Stillwater were moving up 1 7/8, or 7.8%, to 25 5/8.

Warburg initiated coverage of



with a buy rating and set a price target of 75 on the stock. Shares of Temple-Inland were popping 1 1/8 to 62 1/16.

Lehman Brothers started coverage of



as a buy. Shares of VISX were advancing 4 15/16, or 9.5%, to 56 15/16.




climbed 2 to 46 15/16 after it said it has tapped COO Kevin Sharer to replace the retiring Gordon Binder as CEO in May. Binder also plans to leave his role as the company's chairman.



rose 1 5/8 after

The Wall Street Journal

reported it is expected to release results today of an experimental cholesterol-lowering agent that it believes will be more potent than



Lipitor. Shares of Warner-Lambert lost 1 3/4 to 83 3/16.

Lehman Brothers said it further cut its health care sector weighting in its model portfolio to position it for 2000, and increased its weighting in capital goods, communications services and technology. Lehman said its sold its entire position in



and cut its position in Warner-Lambert. Pfizer gained 3/8 to 34 3/16. Lehman said it is reinvesting the proceeds by adding to its positions in General Electric, which rose 1 11/16 to 141 11/16,

Primus Telecommunications



Applied Materials


. Primus gained 1 11/16, or 5.2%, to 34 3/8, while Applied Materials rose 2 5/8 to 114.



said that General Electric has won a $1.98 billion U.S. defense contract to contribute to a jet-engine improvement program for certain

Air Force

planes through 2014. The program, which will be launched in January, will include power plants for F-16 fighters and A-10 attack jets, B-1 and B-2 bombers, KC-135 refueling tankers, C-5 cargo planes and T-38 trainers.

The Heard on the Street column in the


takes a look at

Charles Schwab's


efforts to maintain its large online brokerage market share in the face of increasing competition from cheaper dot.coms as well as more traditional rivals such as

Merrill Lynch



Morgan Stanley Dean Witter


Schwab lost 1 3/8 to 37 3/8, Merrill lost 1 15/16 to 80 1/16 and Morgan Stanley slipped 5/8 to 131.

Herb on TheStreet: More on Ancor and Checking Back on MedImmune


Herb Greenberg

Senior Columnist

12/8/99 6:30 AM ET

Wednesday's Wince

All in a day's hype, er, work:

A $14.8 million investment by



yesterday helped



market cap grow by about $650 million in this wacky, fundamentals-don't-mean-anything kinda market. Nothing changed at the company.



Nothing but the receipt of an investment from Intel regarding a so-called InfiniBand product that, if developed, is two years out. Yet Ancor's stock zoomed on the news, and as you might guess, the

Hostile React-o-Meter

was spinning outta control in the wake of yesterday's Ancor

item. (Actually, it was also spinning because of the



item, but that's another story.)

Oh, and by the way,

SunTrust Equitable

analyst Mark Kelleher, an Ancor bull, lowered his rating on the company to attractive long term from strong buy for three sensible reasons.

The first was the most obvious: valuation. "While we continue to believe the company's prospects are strong, driven by the growth of the (fiber channel) market," he wrote in a report to clients, "we believe most of the good news is now priced into Ancor's stock, and the risks ... now outweigh the possibility of continued strong stock price appreciation."

The second was also obvious: The Intel investment does not call for Intel to take any product or generate any revenue.

His final point -- something that has been pointed out

here (from the dose-of-reality department): Kelleher noted that the higher Ancor's stock price goes, the less Ancor makes on its much-heralded order from

Sun Microsystems


. Sun, you'll recall, has warrants in Ancor stock that translate into a discount for Sun as Ancor's stock appreciates. The higher the stock, the steeper the discount. His bottom line: When Ancor's stock reaches 74 1/2, the Sun deal actually generates negative revenue under generally accepted accounting practices. Ancor closed yesterday at 85 7/8.

Of course, there was a time when investors were bidding up

Planet Hollywood


. Speaking of which...

Hooray for Hollywood:

Many people were hoping that "The Prince" --

Prince Alwaleed bin Talal

-- would bail out Planet Hollywood. In fact, in Andy Serwer's excellent story on adventures of the prince in the Dec. 6 issue of


, the prince says he's convinced Planet Hollywood will rebound. Maybe, but according to an amended 13-D filed yesterday by the prince, from Nov. 8 to Dec. 3, he sold 3.4 million Planet Hollywood shares at prices ranging from 22 cents to 8 cents. Of course, he still owns 12.8 million shares, and he


the prince, so who's to quibble?

Herb's Latest: Join the discussion on

TSC message boards.

What, me bullish?

Who started this rumor, anyway? Some comment I made on our

Fox News Channel

TV show a few weeks ago, I suppose, saying I thought the


would go higher. What a lucky guess! Now


(as in


, not the state) is

writing, "Greenberg finds himself inexplicably bullish. Capitulation on Herb's part?" No. No capitulation! The market


come unglued here, I just don't know when and I'm not stupid enough to stand in front of a speeding locomotive. I just wait for Ancors to land on my head. For a full explanation on why you could never say I've capitulated, go back and read my

Monday column, or take a look at my personal email box or the

message boards and some of the hostile reactions I received from investors in Ancor and MedImmune.

MedImmune misstatement:

I wasn't alerted to this by MedImmune, which still hasn't returned my calls, but by some guy who posted it on my message boards on

. Yesterday, in an item about MedImmune, I said one shot of


costs $5,000. Make that one course of treatment, which equals five shots.

While on the topic of message boards:

Late Monday,


questioned whether's

boards should allow anonymous posts. Sorry, Jim, I'm agin' it. While the veil of anonymity may give insiders the freedom to post pertinent info, anonymity also encourages pump-and-dumpsters and other rah-rahs to spread misinformation without fear of reprisal. I realize anonymity would help page views, but it will erode the very qualities that are supposed to make's

boards different.

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. Community

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