Minds Reeling, Hands Grasping, Wall Street Keeps Going for Tech Stocks

The Nasdaq and the DOT set records again as the insatiable demand for tech and Net names stayed in force.
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SAN FRANCISCO -- Just like

Lt. Colonel Kilgore's celluloid war, someday the

Nasdaq Composite's

string of records is going to end. But today was not that day.

Myopic tech investors continued to press the attack while blue-chip averages struggled throughout in somewhat subdued trading before retreating into the close. Retailers and transports joined the tech leadership on the upswing, but more traditional stock proxies were sabotaged by weakness in pharmaceutical, energy and financial stocks.

The latter followed the bond market lower, with both returning some of

Friday's heady gains. The price of the 30-year Treasury fell 16/32 to 98 29/32, its yield rising to 6.21%. In response, the

Philadelphia Stock Exchange/KBW Bank Index

slid 1.1% while the

American Stock Exchange Broker/Dealer Index

shed 1.3%.

Even

Charles Schwab

(SCH)

fell 5.1% despite

announcing a 41% jump in trading activity in November.

Overcoming an early bout of hesitation which took it as low as 3597.98, the Nasdaq Comp rose steadily after 10 a.m. EST to a high as 3668.16 before closing up 37.93, or 1.1%, to 3658.17.

"It's amazing. It blows my mind. I marvel at it every day," Charles Payne, president of

Wall Street Strategies

, said of the Nasdaq, which established its 23rd record in the past 31 trading days. "The historian/common-sense side of me is worried, but our job is to make people money in the stock market. You've got to play the game."

Recent events such as

Yahoo's!

(YHOO)

inclusion into the

S&P 500

are "a really good admittance by the establishment that things are really changing," Payne said. Similarly, he noted

BroadVision

(BVSN) - Get Report

rose 21% today on word it will be added to the

Nasdaq 100

, effective Dec. 20.

"The Street is saying these stocks really matter even though they don't have traditional P/Es or are overvalued by any type of measure we used to use," he said. "It may not be healthy but it's working right now if you're in the right stocks."

The majority of tech bellwethers were on the rise, leaving the Nasdaq 100 up 1.2% to a record 3242.37. Notable gainers included

Qualcomm

(QCOM) - Get Report

, which rose 6.7% on news

China Unicom

is close to completing a network using the company's CDMA technology. Also,

CMGI

(CMGI)

rose 9.2% on report is has entered into a joint venture agreement with

Compaq

(CPQ)

and

Shanghai Information

to create an Internet venture capital firm focused on China. Compaq was unchanged.

'It's amazing,' said Wall Street Strategies' Charles Payne. 'It blows my mind. I marvel at it every day. The historian/common-sense side of me is worried, but our job is to make people money in the stock market. You've got to play the game.'

TheStreet.com Internet Sector

index set another record, up 24.58, or 2.2%, to 1154.08. Additionally,

TheStreet.com

Red Hots index rose 23.98, or 6.8%, to 374.76. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.

Notable losers in tech included

Whittman-Hart

(WHIT)

and

USWeb/CKS

(USWB)

, down 31.1% and 13.9%, respectively, on news of their planned merger.

Meanwhile, the

Dow Jones Industrial Average

closed off 32.11, or 0.3%, to 11,192.59 after trading as high as 11,250.39 and as low as 11,162.31. Similarly, the S&P 500 slid 1.82, or 0.1%, to 1415.22 after trading as high as 1421.58.

Despite tech overall strength,

Hewlett-Packard

(HWP)

was the Dow's biggest negative influence, falling 3.9%. Also restraining the Dow and S&P were drugmakers such as

Merck

(MRK) - Get Report

, which fell 4.5%. The

American Stock Exchange Pharmaceutical Index

fell 2.7%.

The Dow got its biggest lift from

Wal-Mart

(WMT) - Get Report

, up 7.3% after the firm reported strong same-store sales for the week ended Friday. Expectations of an alliance with

America Online

(AOL)

, which rose 2.5%, also aided the retailer's stock.

Home Depot

(HD) - Get Report

was also a big positive influence on the Dow, up 3.7%. The

S&P Retail Index

rose 3.4%.

The

Russell 2000

rose 3.68, or 0.8%, to 470.39, its second-consecutive 52-week closing high.

Seeing the Good in the Bad

In

New York Stock Exchange

trading, 977.6 million shares were exchanged while declining stocks led advancers 1,846 to 1,233. In

Nasdaq Stock Market

action 1.584 billion shares traded -- the sixth-busiest session in history -- while gainers led 2,161 to 2,033. New 52-week lows swamped new highs 438 to 87 on the Big Board while new highs led 297 to 139 in over-the-counter trading.

Today's session featured another bout of negative breadth and an expanding number of 52-week lows, especially on the NYSE. Such trends have many players convinced the recent rise for major averages -- particularly the Nasdaq -- is due to end (and badly).

But optimists such as Alan Hoffman, senior portfolio manager at

Value Line

, say the punk performance of the average stock suggests the broader market is not excessively extended.

"Actually, in spite of the recent action of the Nasdaq being phenomenal, a lot of blue-chip tech names have corrected in a meaningful way, like

Intel

(INTC) - Get Report

," Hoffman said. "It's been a rolling, name-by-name kind of correction. If we get meaningful movement in major averages some of those will begin to play catch-up."

Intel, which Value Line is long, rose 2.6% to 74 1/16 today after trading as low as 70 9/16 in the wake of a

Prudential Securities

downgrade.

"I still think we're range-bound, probably for rest of December," he said, speaking mainly of the Dow. "Once we get past Y2K paranoia, I think there's a meaningful chance the averages will move higher" with the Dow trading "around" 12,000 "sometime" in first quarter.

Among other indices,

Dow Jones Transportation Average

rose 21.04, or 0.7%, to 2895.98; the

Dow Jones Utility Average

slid 3.59, or 1.3%, to 269.59, another 52-week low; and the

American Stock Exchange Composite Index

added 0.83, or 0.1%, to 828.69.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

gained 35.32 to 7989.91 and the

Mexican Stock Exchange IPC Index

fell 55.84 to 6725.55.

Monday's Company Report

By Tara Murphy
Staff Reporter

(

Earnings estimates from First Call; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.

)

Mergers, acquisitions and joint ventures

USWeb/CKS

(USWB)

and

Whittman-Hart

(WHIT)

are getting together. The news left Wall Street distinctly underwhelmed.

Under terms of the deal, each outstanding share of USWeb/CKS will be exchanged for 0.865 shares of Whittman-Hart, valuing USWeb/CKS at roughly $68.55 share.

Donaldson Lufkin & Jenrette

lowered its rating on USWeb/CKS and Whittman-Hart to market perform from buy. Shares of USWeb/CKS sank 7 1/16, or 13.9%, to 43 13/16, while Whittman-Hart plummeted 24 9/16, or 31%, to 54 1/2.

For more on this, please see the

story written this morning by

TheStreet.com/NYTimes.com

joint newsroom.

American Electric Power

(AEP) - Get Report

,

Siemens

(SMAWY)

and

Bechtel Enterprises

have formed a joint venture to solve power-quality problems and improve transmission. Shares of American Electric lost 3/8 to 31 3/8, while Siemens, which did not trade today, was at 112 1/8.

Chemdex

(CMDX)

popped 7, or 7.5%, to 99 3/8 after it said that it and

Tenet Healthcare

(THC) - Get Report

have formed a new company to provide business-to-business e-commerce services to the health-care industry. Chemdex also said it agreed to acquire

SpecialtyMD.com

, a maker of medical software, in an all-stock purchase valued at about $115 million. Shares of Tenet skidded 5/8 to 23 9/16.

Compaq

(CPQ)

and South Korea's

Samsung

plan to unveil an agreement to invest $500 million in the manufacturing and marketing of Compaq's Alpha microprocessors and computer systems. Shares of Compaq were unchanged at 25 1/16.

Separately, Compaq announced the formation of a Chinese Internet venture with

CMGI

(CMGI)

and

Shanghai Information

. Shares of CMGI soared 17 13/16, or 9.1%, to 211 5/8.

Eastman Kodak

(EK)

and

Matsushita Electric Industrial

(MC) - Get Report

unit

Panasonic

said they entered a DVD disc venture. Shares of Eastman Kodak slid 3/16 to 61 1/16, while Matsushita fell 3 13/16 to 251 1/4.

Esat Telecom

(ESAT)

of Ireland, which is fighting a hostile $1.6 billion takeover bid from

Telia-Telenor

, said it has received approaches from other companies. Shares of Esat Telecom popped 2 to 82.

Hertz

(HRZ)

declined 1/16 to 43 7/16 after it said it ended talks to buy

Ford's

(F) - Get Report

AMI Leasing

. Shares of Ford stumbled 1/16 to 48 7/8.

ING

(ING) - Get Report

has withdrawn its $10 billion offer to buy

Credit Commercial de France

. ING retreated 9/16 to 57 3/8.

A

Federal Communications Commission

internal memo calls the planned megamerger of

MCI WorldCom

(WCOM)

and

Sprint

(FON)

an "intolerable" blow to competition,

The Washington Post

reported Saturday. The Oct. 21 memo obtained by the newspaper was written by Tom Krattenmaker, the research director of the FCC's Office of Plans and Policy. Shares of MCI WorldCom edged up 5/8 to 79 3/16 and Sprint fell 15/16 to 68.

Mail.com

(MAIL)

sank 4, or 15.6%, to 21 11/16 after it said it will buy

NetMoves

(NTMV)

in a $173 million stock deal. Shares of NetMoves added 1 7/16, or 26.1%, to 6 15/16.

Metromedia

(MMG)

bounced 1/16 to 5 after it said it will receive $97.5 million under a pact with China Unicom terminating their telecom cooperation projects. The Chinese government requested termination of the projects in August, saying the structure of the arrangements was improper. Metromedia also said it would receive an additional $6 million in cash after completion of certain conditions.

Nortel Networks

(NT)

will help Internet service providers to certify, deliver and support applications with services it will start to launch in 2000. Nortel will work with

Hewlett Packard

(HWP)

and other software firms. For more on this

story, check out the coverage provided by

TheStreet.com/NYTimes.com

joint newsroom. Nortel Networks tacked on 11/16 to 88 15/16, while Hewlett-Packard skidded 3 1/18 to 105 7/8.

NTL

(NTLI)

plummeted 6 3/16, or 5.1%, to 113 3/8 after it said it will pay $3.7 billion for

Cablecom Holding

, the cable television business controlled by

Swisscom

(SCM) - Get Report

and others. The move is part of its strategy for expansion in continental Europe. Shares of Swisscom climbed 1 1/4 to 38 3/4.

Prudential Securities

said it has purchased

Volpe Brown Whelan

. The purchase gives Prudential an opportunity to strengthen its role as a lead underwriter in technology offerings. Prudential Securities said the new division would be called

Prudential Volpe Technology Group

and would combine Prudential's current technology banking group. The new division, which will be based in San Francisco, is headed by Thomas Volpe and Robert Whelan, who will report to Prudential investment banking head Paul Scura.

Quintel

(QTEL)

gained 1/4 to 5 7/8 after it said it entered a marketing deal with

CyberGold

(CGLD)

. Shares of CyberGold slipped 1 13/16, or 9.8%, to 16 5/8.

RCN

(RCNC)

, a telecommunications company, is acquiring

21st Century Telecom

, a privately held company, for $500 million in stock and debt. Shares of RCN rose 2 11/16, or 6.4%, to 44 7/16.

Tech-Sym

(TSY)

climbed 1 1/18, or 6.5%, to 18 3/8 after it said it has brought

Quarterdeck Investment Partners

on board to consider options for the company including a merger, privatization or sale of all or part of the company.

Todd-AO

(TODDA)

mounted 9/16 to 24 15/16 after it said it agreed to be acquired by

Liberty Media Group

(LMG.A)

, the cable TV programming arm of

AT&T

(T) - Get Report

, in an all-stock deal. Each existing Todd-AO share will be exchanged for 0.25 of a Liberty Media share and 0.40 per share of a new Todd-AO Class-A offering. The implied value of the transaction is $21.50 per Todd-AO share. Shares of Liberty Media gained 2 to 48, while AT&T declined 1 1/2 to 55 1/2.

Visio

(VSIO)

edged up 1 13/16 to 39 5/8 after it said its shareholders gave their stamp of approval to its merger with

Microsoft

(MSFT) - Get Report

. Shares of Microsoft added 2 11/16 to 96 5/8.

Earnings/revenue reports and previews

Xerox

(XRX) - Get Report

on Friday warned investors that fourth-quarter earnings could fall 40% below the 13-analyst consensus estimate of 66 cents a share. In its second consecutive quarter-profit warning, the company blamed Y2K woes for hampering its high-end printing and publishing equipment sales and higher cost from "customer administration reorganization," which includes bad debt, for the disappointing fourth-quarter earnings.

Xerox also pointed the finger at soft profits from its Brazilian unit due to the country's slow economy after its currency devaluation earlier this year, while citing the U.S. dollar's strengthening against European currencies during the fourth quarter as a problem for European revenue and profits. President and CEO Rick Thoman said that earnings should show "meaningful growth in the second half of the year."

J.P. Morgan

cut its rating on Xerox to long-term buy from buy.

PaineWebber

lowered its fourth-quarter earnings estimates to 40 cents a share from 65 cents, and its 2000 EPS estimates to $1.80 from $2.25. Shares of Xerox plunged in Friday's late composite trading but today bounced 1 1/4, or 6.2%, to 21 1/8.

For more on Xerox's woes, take a look at the

story written by

TheStreet.com/NYTimes.com

joint newsroom.

ABM Industries

(ABM) - Get Report

tacked on 7/8 to 22 11/16 after it posted fourth-quarter earnings of 55 cents a share, in line with the two-analyst estimate and up from the year-ago 49 cents.

Analogic

(ALOG)

was unchanged at 28 1/4 after it posted first-quarter earnings of 20 cents a share, missing the two-analyst estimate of 34 cents and down from the year-ago 37 cents.

P.H. Glatfelter

(GLT) - Get Report

shed 1/16 to 13 1/4 after it said it plans to reduce tobacco paper capacity at its

Ecusta

unit during 2000. The company said the cutback could slice 1/3 off its capacity. Glatfelter said it initiated the plan to prepare for losses in sales volume after the company said it would hike tobacco paper prices as a result of decreasing profitability.

Harsco

(HSC) - Get Report

bounced 1/8 to 29 3/16 after it said it sees 5% to 7% revenue growth, and 13% to 15% earnings-per-share growth for 2000.

Mediaplex

(MPLX) - Get Report

mounted 2 15/16, or 5.5%, to 55 9/16 after it said it expects fourth-quarter revenue to exceed estimates and be in the range of $10 million to $12 million, citing higher-than-expected demand for its campaign management services.

Phillips Petroleum

(P)

gained 3/8 to 47 3/4 after it said it set next year's capital budget at $1.79 billion, about the same as the planned spending for 1999.

A.G. Edwards

downgraded shares of Phillips to accumulate from buy.

Pioneer

(PIO) - Get Report

advanced 2 3/8, or 9.3%, to 27 13/16 after it said it was on track to double its overall revenue by 2005, a goal the company stated for itself in 1998.

Nu Skin Enterprises

(NUS) - Get Report

skidded 2 13/16, or 20.8%, to 10 11/16 after it said revenue from Japan in the fourth quarter will likely be lower than expected, which will result in lower-than-anticipated earnings. The company expects fourth-quarter revenue in the range of $220 million, about $30 million less than previously expected and about even with the third quarter. The five-analyst estimate currently calls for the company to earn 26 cents a share in the fourth quarter.

Analyst actions

Morgan Stanley Dean Witter

started coverage of

Agilent

(A) - Get Report

with an outperform rating.

Credit Suisse First Boston

initiated coverage with a buy rating and set a price target of 55 and

Goldman Sachs

added the stock to its recommended list.

Merrill Lynch

started coverage with an intermediate-term accumulate, long-term buy. Merrill was an underwriter on Agilent's IPO last month Shares of Agilent inched up 1/8 to 444 7/8.

Bear Stearns

upped its ratings on

Bethlehem Steel

(BS)

and

USX-U.S. Steel

(X) - Get Report

to buy from neutral. Bethlehem Steel slipped 1/8 to 7 3/8, while U.S. Steel rose 11/16 to 30 3/16.

Lehman Brothers

added

Ericsson

(ERICY)

and

Electrolux

(ELUX)

to its European portfolio of recommended stocks, while it removed

Nokia

(NOK) - Get Report

and

UBS

from the roster. Ericsson rose 3/8 to 60 3/16, Electrolux rose 1/4 to 43 and Nokia fell 15/16 to 167 1/16.

Goldman Sachs upped its rating on

eToys

(ETYS)

to trading buy from market outperformer. eToys played up 1 to 45 15/16.

J.P. Morgan

raised its price target to year end on

Grupo Televisa

(TV) - Get Report

to 75 from 50. Shares slipped 1/8 to 61 3/8.

Prudential Securities

sliced its rating on

Intel

(INTC) - Get Report

to accumulate from strong buy based on worries about its fourth-quarter processor shipments. Shares of Intel rose 1 7/8 to 74 1/16 despite the news.

Bear Stearns upped its rating on

KPN

(KPN)

to buy from attractive, while First Boston raised its price target to 95 euros from 75. KPN popped 4 13/16, or 6.2%, to 82 7/16.

Morgan Stanley Dean rolled out coverage of

MetaSolv Software

(MSLV)

with an outperform rating. Shares rose 5/8 to 87 5/8.

Salomon Smith Barney

raised its rating on

Noble

(NBL) - Get Report

and

Burlington Resources

(BR) - Get Report

to buy from outperform. Noble gained 1 1/4, or 6.3%, to 21, while Burlington lifted 2 1/4, or 7.3%, to 33 3/16.

Alex Brown cut its price target for

Papa John's International

(PZZA) - Get Report

to 40 from 50. Shares gained 1 15/16, ot 8.3%, to 25, despite the news.

DLJ cut its rating on

Public Storage

(PSA) - Get Report

to buy from top pick. Shares fell 7/16 to 21 5/16.

U.S. Bancorp Piper Jaffray

cut its rating on

Ryder

(R) - Get Report

to neutral from buy. Ryder fell 7/8 to 22 3/4.

Goldman Sachs started

Stamps.com

(STMP) - Get Report

as a market outperformer. Shares rose 3/4 to 78 3/4.

Lehman Brothers raised its 12-month price target on

STMicroelectronics

(STM) - Get Report

to 170 from 95. Shares fell 1 11/6 to 135 1/8.

Donaldson Lufkin & Jenrette raised its rating on

Ticketmaster Online/CitySearch

(TMCS)

to buy from market perform. Shares gained 7/16 to 44.

Alex. Brown said it sliced its rating on

Transkaryotic Therapies

(TKTX)

to market perform from buy. Shares dropped 3 3/4, or 9%, to 38 1/8.

Warburg Dillon Read

started coverage of

Virata

(VRTA)

with a hold rating. Shares fell 4 13/16, or 12.3%, to 34 1/4.

Offering and stock actions

Track Data

(TRAC)

tacked on 2 11/16, or 29.3%, to 12 after it set a 2-for-1 stock split.

Tritel

, a wireless affiliate of AT&T, raised the price range for its initial public offering to $17 to $19 a share, from $15 to $17 a share.

Washington Post

(WPO)

dropped 6 1/4 to 560 1/8 after it said it completed its previously announced cash offer to purchase up to 500,000 shares of its Class-B common stock at a price of $575 a share.

Miscellany

An advisory panel has recommended that

Ligand Pharmaceuticals

(LGND) - Get Report

lymphoma drug

Targretin

be approved by the

Food and Drug Administration

.

Online brokerage

Charles Schwab

(SCH)

lost 2 1/16, or 5.1%, to 38 11/16 despite saying Monday that November trading activity skyrocketed. Schwab said that daily average revenue trades rose 41% to 202,900 in November from October's 144,300. The last time the company saw numbers like that was in April, when daily average revenue trades jumped to a record 207,700 from 155,200.

On the year, average daily trades are up by 68%, Schwab said. The company also said that it opened 109,400 accounts during the month, bringing total retail accounts -- both online and offline -- to 6.4 million. Online brokerage stocks, though, were largely unmoved by the news with Schwab falling off 1 5/16, or 3%, to 39 7/16.

For more on this, please see the

story written this morning by

TheStreet.com/NYTimes.com

joint newsroom.

Murphy Oil

(MUR) - Get Report

gained 1 11/16 to 53 7/8 after it said it has increased its capital spending budget by 18%, to $457 million.

PMI Group

(PMA)

dropped 1 1/8 to 48 7/8 after it announced its plans to change its ticker symbol to "PMI" starting Jan. 3.

T&W Financial

(TWFC)

lost 15/16, or 37.5%, to 1 5/8 after it said that four of its key executives reduced their annual compensation effective Dec. 1 by an aggregate amount of $660,000 until the company resolves its liquidity issues.

Volkswagen

said it plans to spend $1 billion from 2000 to 2004 on improvements at its Mexican plant, the only factory that makes both the new Beetle and the old VW bug.

The Heard on the Street column in the

Journal

offers a broad look back at the stock market over the past decade. The story compares actual events to predictions made in 1989.

For instance, heading into the decade, predictions of Dow 5000 were scoffed at, the Japanese market was still viewed as a miracle and U.S. investors were extremely anxious about the markets. Since then, the

Dow Jones Industrial Average

has more than quadrupled, and the

Nasdaq Composite Index

has multiplied in value almost eight times, the story says. Tech stocks have replaced '80s stars such as

Philip Morris

(MO) - Get Report

among others. The bottom line: For the decade ahead, the biggest story may be one that no one has called yet, the column says.