midday12-31-99

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TheStreet.com's MIDDAY UPDATE

December 31, 1999

http://www.thestreet.com

Market Data as of 12/31/99, 1:35 PM ET:

o Dow Jones Industrial Average: 11,497.12 up 44.26, 0.39%

o Nasdaq Composite Index: 4,069.31 up 32.44, 0.80%

o S&P 500: 1,469.25 up 4.78, 0.33%

o TSC Internet: 1,154.45 down 5.99, -0.52%

o Russell 2000: 504.75 up 8.16, 1.64%

o 30-Year Treasury: 95 10/32 down 26/32, yield 6.477%

In Today's Bulletin:

o Market Roundup: Farewell, Millennium: Upside Day Caps Massive Annual Gains
o Wrong! Rear Echelon Revelations: Someone Has to Take the Heat

"TheStreet.com" Millennium Edition on

Fox News Channel

:

Special Times! Jan. 1 at 6 p.m. EST and Jan. 2 at 11 a.m. EST

What stock is Cramer's favorite pick for the next century? Find out on a special edition of "TheStreet.com" that looks at investing in the new millennium. Special guests include Ryan Jacob of the Jacob InternetFund, Gene Walden, author of The 100 Best Stocks to Own in America, and Ken Schapiro from Condor Capital Management.

Also on TheStreet.com:

Wrong! Rear Echelon Revelations: A Sleepless Night Over NewsHour

Cramer just had to get up and get off his chest all the things he wished he'd said.

http://www.thestreet.com/comment/wrongrear/851425.html

Brokerages/Wall Street: Investment Banking IPO Fees Remain Steady Despite Investigation

Underwriters' steadfastness diverges sharply from Nasdaq traders' reaction to similar scrutiny.

http://www.thestreet.com/stocks/brokerages/851557.html

Moscow Journal: Yeltsin the Showman Takes His Final Bow

The Russian president's resignation announcement once again proves his dramatic flair.

http://www.thestreet.com/int/moscow/851595.html

Portfolio Manager's Toolbox: Island of Foxes and Hares: How the S-Curve Forecasts Stock Behavior

Here's a biology lesson that will teach you something about your portfolio.

http://www.thestreet.com/funds/managerstoolbox/849653.html

Market Roundup: Farewell, Millennium: Upside Day Caps Massive Annual Gains

By

John J. Edwards III

Markets Editor

12/31/99 2:30 PM ET

After a year like 1999 -- after a decade like the 1990s -- you really wouldn't expect any less than this, would you?

Floating on the breeze of optimism that's lifted them throughout the last few weeks, major equity indices wrapped up the millennium with more gains and more records.

Wall Street's already buoyant mood brightened still more as industrialized nations east of the U.S. rolled into 2000 with no significant Y2K troubles, and stocks finished the shortened session at or near their highs.

Gotta start with the

Nasdaq Composite Index

, which jumped 32.41, or 0.8%, to a record 4069.28. The seemingly unstoppable Comp solidified its position as the best performing major U.S. index in history, turning in a stunning 85.6% gain for 1999. The

Dow Jones Industrial Average

rose 81.7% in 1915 (although some say the figure was a bit lower).

Today's market: Join the discussion on

TSC

Message Boards

The Nasdaq's twin engines today, as they've been for so much of the recent run, were

Qualcomm

(QCOM) - Get Report

and

Yahoo!

(YHOO)

. Qualcomm, in its first day of trading after a 4-for-1 stock split, leapt 14 5/16, or 8.9%, to a record 176 1/4. That's 705 on a pre-split basis and puts the wireless giant's 1999 gain at 2,621%.

Yahoo! gained 16 11/16, or 4%, to a record 432 11/16, finishing the year up 265.2%.

The Dow wrapped things up today with a gain of 44.26, or 0.4%, to a record 11,497.12, leaving it up 25.2% for the year.

Alcoa

(AA) - Get Report

, by far the top performing Dow stock of the year -- with a gain of 122.6% -- fittingly posted today's largest point gain among the gilded 30, up 2 7/16 to 83. The Dow's biggest loser,

Philip Morris

(MO) - Get Report

, lost 57% on the year and fell 11/16 to 23 today.

Speaking of falling, the overall Net sector couldn't muster much upside momentum despite Yahoo!'s blast higher. With

Amazon.com

(AMZN) - Get Report

,

America Online

(AOL)

and

BroadVision

(BVSN) - Get Report

among the drags,

TheStreet.com Internet Sector

index lost 5.99, or 0.5%, to 1154.45.

Don't fret, though. The DOT eked out a 185.1% advance for 1999.

The

S&P 500

, performance benchmark for most money managers, made a lot of them look good this year. Today up 4.79, or 0.3%, to a record 1469.26, it rose 19.5% on the year -- a figure a great many Wall Street pros managed to beat.

TheStreet.com

Red Hots index, rose 16.42, or 3.7%, to 463.16. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money. (You can check quotes on the Red Hots index and its component stocks at

http://www.thestreet.com/redhots.)

And how 'bout that

Russell 2000

? The much-maligned small-cap index, benefiting from a lot of formerly small-cap tech stocks that have surged since their inclusion in the index, broke 500 for the first time today. It gained 8.15, or 1.6%, to a record 504.74, for a 1999 gain of 19.6%.

The Russell's late-year run captures an effect that has stock watchers heartened as 2000 begins -- the broadening of the market's advance. The rally certainly has been driven by the largest stocks, and by the largest high-tech names in particular. But as the recent chatter on Wall Street has it, we're seeing a change.

"Things are actually looking better," said Richard Dickson, technical analyst at

Scott & Stringfellow

in Richmond, Va. "I guess I'm encouraged that the market does seem to have broadened out. We are seeing some participation among the secondary indexes. Things generally have gotten stronger rather than weaker in the last couple of weeks or so."

"The question is, how much of this is January-effect buying and how much represents longer-term buying?" Dickson went on. "I don't think there's any clear answer to that."

The January effect refers to the buying of stocks that have been downtrodden in the past year and have suffered most from tax-loss selling. Dickson noted that investors have been more and more eager to get ahead of the effect. "They start discounting it, and pretty soon the January effect becomes the December effect," he said.

Y2K? Not 2 Worry

As the new millennium (at least in popular parlance) loomed into view in the Asia-Pacific region, the expected celebrations but none of the feared major disruptions came with it. From New Zealand to Japan to Hong Kong, there were delightful fireworks but no exploding power plants.

Jim Herrick, managing director of trading at

Robert W. Baird

in Milwaukee, said that was just what traders needed to see to extend the rally. "As the market has stayed open it's actually gathered a little strength," he said before the 1 p.m. EST close. "As the millennium passes over a number of countries, the Y2K problems have receded. There was an absence of volume as people waited to see if we had any Y2K glitches."

Volume certainly was dampened, but not so much as one might have expected. And breadth was solidly positive, again bespeaking the broadening trend.

New York Stock Exchange

advancers topped decliners 2,151 to 915 on 379.1 million shares, with 122 new 52-week high outpacing 89 new lows. On the

Nasdaq Stock Market

, 2,605 winners beat 1,569 losers on 756.3 million shares. New highs led new lows 202 to 89.

The bond market had a rough year, and it ended poorly. The bellwether 30-year Treasury dropped 19/32 to 95 12/32, its yield rising to 6.48%. (For more on the fixed-income market, see today's

Bond Focus.)

Among other indices, the

Dow Jones Transportation Average

rose 13.75, or 0.5%, to 2977.20 (down 5.5% on the year); the

Dow Jones Utility Average

slipped 0.26 to 283.36 (down 9.3%); and the

American Stock Exchange Composite Index

jumped 10.85, or 1.3%, to a record 876.97 (up 27.3%).

Market data above are preliminary. Updated numbers and Friday's Company Report will follow this story.

Wrong! Rear Echelon Revelations: Someone Has to Take the Heat

By

James J. Cramer

12/31/99 1:18 PM ET

Can we stipulate that if your fund performed badly this year that someone should take heat? Can we stop coddling and protecting and excusing? Can we for once just look at this as if it is the

NFL

, which somehow had more rigor than peoples' money?

Let me tell you how far from that we are currently. Earlier this week, the

San Francisco Chronicle

published an article under the headline "Vanguard Group Replaces S.F. Fund Adviser." It was about how a $3 billion fund

did not replace

Spare, Kaplan, Bischel & Associates

because of performance.

Join the discussion on

TSC

Message Boards.

Get this. The fund was down 1.4% this year. Spare Kaplan managed 16% of the fund. They were replaced with

Wellington

.

What amazes me is that

Vanguard

refused to say that the performance was subpar. Instead it went out of its way to say that it was just trying to get a better mix of disciplines.

Give me a break!!

It gets worse. Listen to what this spokesman says about the choice: "To portray this as a performance issue is plain wrong," John Woerth said. "The fund performed well. The board is simply looking for a new blend of talents for the advisory firms."

Good grief!! Performed well? That's awful performance. Should people be fired for their performance? How about this honest answer from someone in the game: I know I would be fired. I also know I would do the firing if I were in charge. And I would say I did it because of bad performance.

This morning, I was reading an article in the

New York Daily News

about what a poor job

Ray Rhodes

did coaching the

Green Bay Packers

this year. It is true. He stunk up the joint. If he does it again next year, he should be fired for it. Just like if

Norv Turner

hadn't made the playoffs this year, I would personally have worked to fire him and I am an

Eagles'

fan.

Let's get one thing straight. If you have a manager who thinks he is doing well because he was down 1.4% this year, I want you to do me a favor. I want you to get out a 3 by 5 card and write this down: "Making money is good, losing money is bad."

There, now you have an edge on these guys.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of the original publication, his fund had no positions in any stocks mentioned. 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

jjcletters@thestreet.com.

Copyright 1999, TheStreet.com