Who's afraid of the big bad
? Judging from today's market activity, lots of nervous investors who think Tuesday's move toward a tightening bias may be a prelude to
blowing the market down with a future interest-rate hike.
But market movers aren't putting all the blame on the Fed. Earnings and gold are doing their fair share to deflate yesterday's gains, as skepticism returns to the Street.
"We're looking for the market to pull back considerably with every economic report putting volatility into the market," said Ronny Kraft, CEO of
Gotham Capital Management
. "People are excited with third-quarter numbers," he said, referring to
strong report. "But last quarter, 65% of companies gave positive earnings surprises and 42% of them traded down after they reported, and that's when we saw the selloff. In the first quarter, we had 68% report positive earnings surprises and only 25% trade down. That's nearly twice the amount."
Gold is continuing to bring increasing woes to the market, as money managers struggle to rid themselves of short positions. "Movement in gold can bring a financial blow-up and the reason be behind it is that there is an outrageous short position out there," Kraft said. "Anyone that is short gold is in trouble." He was referring to today's
Wall Street Journal
Heard on the Street article that cited
Republic New York
Credit Suisse First Boston
as some of the dealer's with large exposure to the troubled
By midsession, the
Dow Jones Industrial Average
was off 29 to 10,559, with
weighing it down.
After falling short of record closing stats
yesterday, the tech-heavy
Nasdaq Composite Index
was surging 24, or 0.8%, to 2881. Yahoo! was doing its part to fuel the index, after its solid earnings report had the stock had the stock pumping up 8.1%.
New York Stock Exchange
Barnes & Noble
was sliding 10.4% after
sliced its rating on its shares to market perform from long-term buy, while
American Home Products
was gaining weight, up 3 1/8, or 6.9%, to 48 1/4, after announcing a proposed settlement in the lawsuit over the fen-phen diet cocktail. AHP also announced restructuring plans for its
sank 8 1/8, or 11.5%, to 61 7/8 after the company said second-quarter profits would miss consensus estimates, while
, jumping 6 1/8, or 18.8%, to 38 11/16, and
, mounting 6 5/16, or 7.7%, to 88 11/16, were following Yahoo!'s lead.
Other stock proxies were mixed with the broad
down slightly, 1 to 1324, while the small-cap
was sliding 1 to 429.
TheStreet.com Internet Sector
index was also getting a boost from Yahoo!'s flight, and coupled with gains from
, the index was leaping 23, or 3.1%, to 731.
In other Big Board news, decliners were leveling advancers, 1,643 to 1,154 on 489 million shares, while on the
Nasdaq Stock Market
, laggards were edging out leaders 1,843 to 1,753 on 766 million shares. The new 52-week lows were pummeling new highs on the NYSE, 74 to 36, while on the Nasdaq new highs were beating out lows 103 to 65.
On the bond front, the benchmark 30-year Treasury was down 1/32 to 99 8/32, its yield at 6.18%. (For more on the fixed-income market, see today's early
Thursday's Midday Watchlist
Shares of IPO
rocketed 15 9/16, or 97.3% to 31 3/4 after being priced top-range at $16. The company is an online destination for prescription drugs, herbs and other medical supplies.
wrote about PlanetRx.com in a story
Webvan: Join the discussion on
In response to
Securities and Exchange Commission
said it is postponing its initial public offering, originally slated for this week. According to a report in Thursday's editions of
The Wall Street Journal
, the SEC is worried about Webvan's possible failure to observe quiet-period restrictions in giving pre-IPO interviews to
as well as its dissemination during road-show presentations of information not included in its prospectus. Details of the road show were brought to light by
column yesterday, which earned mention in today's
Two more major online brokerages --
-- said they'd be joining the after-hours trading party in the not-too-distant future.
Both Fidelity, the brokerage unit of the mutual fund giant, and DLJdirect, a unit of investment bank
Donaldson Lufkin & Jenrette
, plan to trade Nasdaq and some listed stocks through the
electronic communication network, in which they and
each hold 25% stakes.
Spear Leeds & Kellogg
owns the remaining 25%.
Fidelity's hours for retail trading will now include a 4:30 p.m. through 8 p.m. EDT session. DLJdirect is planning trading for both the morning from 8 a.m. to 9:15 a.m. and the evening from 4:15 p.m. to 7 p.m. Schwab
earlier this week said it would trade from 4:30 p.m. to 7 p.m. on the REDIbook network.
DLJdirect was up 3/4 to 16 11/16.
Mergers, acquisitions and joint ventures
lost 5/8 to 66 1/16 after saying it is acquiring $550 million of
Metromedia Fiber Network's
optic infrastructure. Metromedia moved up 1 7/8, or 6%, to 33 3/16. Bell Atlantic will invest about $700 million to purchase about 9.9% of the equity of MFN via the purchase of newly issued shares at $28 a share. Also, Bell Atlantic will buy about $975 million in debt securities convertible into common stock at a conversion price of $34 per share, boosting Bell Atlantic's potential equity investment in MFN to about 19% of the company.
dropped 3 3/16, or 5.8%, to 51 3/4 after agreeing to acquire privately held
, a supplier of Internet marketing software, in a stock deal worth about $275 million. Macromedia also unveiled alliances with
lately down 3/8 to 30 7/8, and
which rose 2 5/8 to 164. Macromedia said it plans to issue about 5 million shares of stock in the connection with the acquisition and take one-time charges of up to $5 million in its current quarter.
Earnings/revenue reports and previews
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
Advanced Micro Devices
slipped 1/4 to 19 3/16 after last night reporting a third-quarter loss of 72 cents a share, narrower than the 18-analyst estimate of a loss of 97 cents but worse than the year-ago earnings of 1 cent.
inched up 11/16 to 79 7/16 after posting fourth-quarter earnings of 79 cents a share, beating the 22-analyst estimate of 76 cents and the year-ago 65 cents.
slipped 13/16 to 122 7/8 despite posting third-quarter earnings of 80 cents a share, a penny ahead of the 13-analyst estimate and up from the year-ago 69 cents. Revenue jumped to a record $27.2 billion, a 13% increase over the year-ago period.
Goody's Family Clothing
climbed 1, or 12%, to 9 5/16 after it said September same-store sales rose 4.8%.
In Focus Systems
added 3 1/2, or 19.1%, to 21 7/8 after posting third-quarter earnings of 31 cents a share, beating the seven-analyst estimate of 23 cents and the year-ago 8 cents.
slipped 15/16 to 32 7/8 despite posting a 4.1% increase in September same-store sales.
Yahoo! flew 14 1/4, or 8.1%, to 190 after last night reporting third-quarter earnings of 14 cents a share before charges, ahead of the 26-analyst estimate of 9 cents a share, and up from the year-ago 2 cents before items.
Deutsche Banc Alex. Brown
U.S. Bancorp Piper Jaffray
all raised ratings and/or earnings expectations on Yahoo!.
Offerings and stock actions
slipped 7/16 to 31 9/16 in its trading debut after being priced at $32 a share by Goldman.
added 1/2 to 21 1/4 after it announced plans for a 2.5 million-share secondary offering.
slipped 3/8 to 13 1/8 after
Morgan Stanley Dean Witter
priced 11.9 million ADRs at $13.50 each, the bottom of the estimated range. One ADR is equal to five ordinary shares.
climbed 1 5/16 to 62 7/8 after Deutsche Banc raised its rating to strong buy from market perform.
Barnes & Noble fell 2 3/4, or 10.4%, to 23 3/4 after
lowered its rating to market perform from long-term buy.
added 11/16 to 17 15/16 after
initiated coverage with a neutral rating.
climbed 1 7/8, or 7.6%, to 26 1/2 after PaineWebber initiated coverage with a buy rating.
climbed 4 5/8 to 156 1/4 after Deutsche Banc raised its price target to 175 a share.
First Health Group
climbed 1/8 to 22 1/4 after
raised its rating to accumulate from intermediate-term neutral.
fell 3 1/8, or 6.5%, to 45 5/16 after PaineWebber initiated coverage with a neutral rating.
Health Management Associates
fell 1/8 to 7 5/8 after Merrill upped its intermediate-term opinion to accumulate from neutral.
rose 5/8 to 56 11/16 after Merrill raised its rating to intermediate-term buy from accumulate.
slipped 11/16 to 7 15/16 after J.P. Morgan cut its rating to market perform from buy.
climbed 2 5/8, or 8.2%, to 34 3/4 after PaineWebber initiated coverage with an attractive rating.
slipped 7/16 to 24 3/16 after saying it would take an after-tax charge of $31 million, or 33 cents a share. The company settled three lawsuits relating to the sale of its boat engines.
lost 1/16 to 5 5/16 after Chairman and CEO Bill Schmidt resigned after less than six months in the post. Schmidt also quit as a board member and will be replaced by Jim Jannard, who founded the company in 1975.
said it will further delay the filing of its second-quarter earnings report and may be delisted if Nasdaq does not grant it an extension.