SAN FRANCISCO -- Tech stocks have been paradise found for many investors and today (again) challenged the old adage about no sector being an island. With nearly every other major industry group struggling and blue-chip proxies faltering, the
Nasdaq Composite Index
waffled a bit from its early impetus but secured yet another record.
Coming off last week's big gains, traders weren't overly concerned about or surprised by today's somewhat lackluster action. And, absent any big economic news or other "macro" event, trading focused on so-called story stocks, with most of the tales poorly received.
After climbing as high as 3570.91 in the wake of
Friday's big advance, the Nasdaq Comp fought selling pressure for much of the afternoon before closing up 25.38, or 0.7%, to 3456.01.
overcame weakness in fellow bellwethers such as
to sustain the Comp. The
rose 0.6% to 3191.09, another record but off its intraday apex of 3223.63.
gained 11% ahead of its addition to the
tomorrow. Yahoo! paced
TheStreet.com Internet Sector
index, which rose 16.10, or 1.6%, to an all-time best of 1044.64 after trading as high as 1058.20. Additionally,
Red Hots index rose 9.42, or 2.8%, to 347.43. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.
One Red Hot on the move was
, higher by 16.1% after
extended an existing agreement between the firms to include service and support. Dell dipped 1.1%.
"Momentum rules. It's really that simple," said Barry Hyman, chief market strategist at
Ehrenkrantz King Nussbaum
, regarding tech stocks in general and the Comp in particular. "It's getting kind of scary, but there's reason to be enthusiastic. Tech is the only growth sector."
Given the strong seasonal factors and "extreme momentum," Hyman expects the "positive feelings" will remain intact through early January.
But the strategist would not add to tech holdings at this point, saying some moves -- such as Yahoo!'s rise from 212 3/4 on Nov. 30 to today's close of 280 13/16 -- are getting "out of hand."
New York Stock Exchange
trading, tech giants such as
enjoyed stellar sessions as well, the latter following a slew of positive analyst comments. The
Morgan Stanley High-Tech 35
rose 2% to a record 1700.33.
gained 3.6% and was the biggest positive influence on the
Dow Jones Industrial Average
But the Dow struggled, closing off 61.17, or 0.5%, to 11,225.01 after trading as low as 11,193.51. The average was weighed down by
, which dipped 1.7% after announcing a 34% price cut in certain CD drives. Additionally,
declined 6.2% on
news Chairman Douglas Ivester will retire in April.
Morgan Stanley Dean Witter
cut its recommendation to neutral from outperform.
One of the big "stories" of the day was the failure of financial stocks to continue their recent momentum despite the bond market's modest improvement. The price of the 30-year Treasury bond rose 7/32 to 98 14/32, its yield dipping to 6.25%. However, the
Philadelphia Stock Exchange/KBW Bank Index
shed 2.6% while the
American Stock Exchange Broker/Dealer Index
Trader said the group was infected by
, which declined 27.8% after issuing a
The U.S. Bancorp announcement was "pretty punishing," said Jay Meagrow, vice president of trading at
in Cleveland. "If not for that, we'd probably be having a pretty good day."
Meagrow said the reaction to U.S. Bancorp's announcement was particularly harsh because of its timing. Many institutions dumped the stock because they now "can't carry USB through the end of the year," he said. "At the end of any other quarter, investors can digest" bad news, but not before year-end.
As a result, there was "big capital commitment trading" on the stock today, he noted. Indeed, at 21.1 million shares, U.S. Bancorp was the fourth most active in NYSE action. Additionally, the stock "never saw an uptick" during the company's midday conference call, he observed. "Either nobody was listening or they didn't seem to care" about the company's explanations.
Meagrow noted names "suffering" in sympathy included such other regional banks as
, down 7.5%;
, down 6.7%; and
Fifth Third Bancorp
, down 4.9%.
Hampered by weak financials as well as decline by big pharmaceutical companies, energy stocks, transports and retailers (among others), the S&P 500 closed down 9.96, or 0.7%, to 1423.34.
was another big negative and at nearly 26 million shares, the most actively traded stock. The grocery chain fell 24.6% after issuing cautious comments about its fourth-quarter results. Also, two senior executives -- including Vice Chairman and COO Robert Miller -- left Kroger to head up
, which leapt 42.4%.
Overcoming decidedly negative breadth statistics, the
rose 1.17, or 0.3%, to 465.75.
In NYSE trading, 917.0 million shares were exchanged while declining stocks led advancers 1,960 to 1,104. In
Nasdaq Stock Market
action 1.367 billion shares traded while losers led 2,237 to 1,877. New 52-week lows outpaced new highs 219 to 109 on the Big Board while new highs led 271 to 95 in OTC trading.
Among other indices, the
Dow Jones Transportation Average
shed 23.28, or 0.8%, to 2905.52; the
Dow Jones Utility Average
shed 1.86, or 0.7%, to 281.31; and the
American Stock Exchange Composite Index
dipped 5.68, or 0.7%, to 829.82.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
gained 62.77 to 7857.50 and the
Mexican Stock Exchange IPC Index
dropped 44.21 to 6425.70.
Monday's Company Report
Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.
Mergers, acquisitions and joint ventures
slipped 3/16 to 29 13/16 after it said it bought Japanese steering-wheel maker
and that the acquisition would have a small positive impact on earnings.
gained 4 1/2 to 119 13/16 after it formed a strategic alliance with
where IXL will use Bea's suite of e-commerce transaction servers. IXL climbed 11/16 to 38 3/8.
Credit Suisse First Boston
upped its rating on Bea to strong buy from buy.
climbed 1 5/16 to 75 5/8 after it said it entered an agreement to purchase a 10% interest in
in exchange for advertising and promotional time. Salon.com rose 5/16 to 7 1/4. According to the terms, Salon.com would issue 1.11 million shares to Rainbow Media Holdings, which has agreed to give Salon.com $11.8 million in advertising over its outlets for the next several years.
fell 1 to 28 1/16 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 1/2 to 44 3/4 after saying it will install and support
Linux operating systems on all of its PowerEdge server models. Shares of Red Hat popped 32 1/8, or 16.1%, to 232 1/8.The deal includes worldwide service and support to its Linux offerings, extending an agreement between the two companies.
gained 1 13/32, or 27.1%, to 6 5/8 after it said it expanded its fungal drug pact with
, which lost 1 11/16 to 47 7/8.
said it plans to acquire wireless Internet services provider
and e-commerce company
in separate stock deals valued at a total of about $740 million. InfoSpace CEO Naveen Jain said he expects wireless devices, such as cell phones, to generate about 40% of revenue next year. Shares of InfoSpace soared 18 7/16, or 14%, to 149.
authorized the $9.85 billion merger of
Republic New York
. Shares of Republic rose 13/16 to 71 3/16. The transaction was tied up for months after a New Jersey money manager, who was charged with scamming investors, sparked a probe into his dealings with Republic. Republic's founder Edmond Safra, who died in a suspicious fire in his apartment last week, saved the deal after he accepted a $450 million reduction of his interest.
National Westminster Bank
fell 2 to 136 after it said it has met during the last 10 days with
Royal Bank of Scotland
Bank of Scotland
, which both have launched rival takeover bids for NatWest, and said that it still feels their offers are inadequate.
, an R&D company that has developed a light-control technology -- called suspended particle device (SPD) -- which can be used in automatically dimming rear-view mirrors and "smart" window, announced that it has granted a license to Global Mirror, allowing this company to use SPD technology in its rear-view mirrors. Research Frontiers stock was up 1 1/4, or 12.6%, to 11 1/2.
rose 27/32, or 50%, to 2 19/32 after it announced the completion of a deal that supplied
NEC Do Brasil
with TCSI's SolutionCore telecom application.
climbed 2 3/4, or 5.1%, to 56 1/2 after saying it was in an early stage of merger talks with
, a British pay-television company.
slipped 1/8 to 17 3/16 after it said it was unable to reach a definitive pact to sell its pork group to
. Smithfield gained 1/4 to 25 5/16. 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.
United Parcel Service
said it is accelerating the purchase of new Airbus Industry A300-600 freighter aircraft due to growth in air express shipping. The company said it upped its order to seven A300s from its initial order of four. UPS said its next-day air service volume rose 14.6% from the year-ago report. Shares of UPS slid 3/16 to 66 1/4.
lost 1 3/16, or 6.5%, to 17 1/16 after it said it would sell Ziff-Davis Publishing to
for $780 million. For additional coverage of the
Ziff-Davis sale, check out a separate story from the
Earnings/revenue reports and previews
shed 5 13/16, or 31.9%, to 12 1/2 after it said a prolonged fare war in the airline industry will hurt its fourth quarter. 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.
was chopped 21 1/16, or 62.9%, to 12 1/2 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
.Glaxo lost 1 7/16 to 58 1/2. Chirex said revenue would decrease by $28 million for the year.
dropped 3 1/4, or 6.9%, to 44 after saying it sees its main unit posting a 42% increase in third-quarter earnings despite softer-than-expected November sales. The company expects to post third-quarter earnings of 26 cents a share, after a 1-cent reduction. The 16-analyst estimate forecasts Circuit City to posted third-quarter earnings of 25 cents.
said it completed labor cuts and sees $100 million in annual savings. The company said it sees costs for labor cuts between $100 million and $150 million, which will be taken as a fourth-quarter charge. Shares of Eastman Chemical were unchanged at 42 1/8.
slipped 1/2 to 26 9/16 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 earning estimates within a range of $2.35 to $2.45 per share, roughly in line with the 15-analyst estimate of $2.38 a share.
dropped 5 3/16, or 25.2%, to 15 3/8 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 its Vice Chairman and COO Robert Miller has resigned to take over as chairman and CEO of troubled drug store chain
. 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.
United Natural Foods
rose 11/16, or 9.8%, to 7 3/4 despite posting a first-quarter loss of 6 cents a share, missing the five-analyst estimate of a 5-cent profit and the year-ago 26-cent profit. The company also said it tapped Michael Funk to replace Norman Cloutier as CEO.
shed 9 3/4, or 27.8%, to 25 3/8 after it said it sees fourth-quarter earnings between 52 cents and 54 cents per share, 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.
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 Baker. Shares of AT&T slipped 3/16 to 56 13/16.
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
as saying: "No one tells me what to do."
Jack in the Box
said it had set a $10 million stock buyback plan. Shares of Jack in the Box added 1 1/8, or 5.65%, to 21 3/16.
started coverage of
with a strong buy rating and set a price target of 50. Shares of Braun Consulting gained 2 7/8, or 7.9%, to 39 1/2.
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. Shares of Charter Communications skidded 1 1/4 to 25 1/16.
said it set a price target of 120 for
and upped its second-quarter earnings estimates to 23 cents a share from 22 cents. Soundview upped 2000 estimates to $1.03 from $1.01, and 2001 estimates to $1.30 from $1.27. Shares of Cisco Systems tacked on 2 11/16 to 98 1/4.
DLJ raised its rating on
to buy from market performer. Clorox shares mounted 1 3/8 to 48 3/16.
DLJ started coverage of
with a buy recommendation while
initiated coverage with a strong buy rating and a price target of 23. Data Critical hopped 5/8 to 14 3/8.
said it upped its fourth-quarter estimates on
to 20 cents a share from 15 cents and its 2000 estimates to $2.50 from $2.45 a share. Shares of Dollar Thrifty Automotive Group moved up 15/16 to 21 7/16.
started coverage of
with a buy rating. Shares of Ebookers.Com lost 1 1/4, or 5.2%, to 22 15/16.
Morgan Stanley Dean Witter
started coverage of
as an outperform. Expedia shares plummeted 5 1/2, or 10.1%, to 48 3/4.
First Boston started coverage of
as a strong buy and set a price target of 54. Shares of Houghton Mifflin edged up 5/8 to 39 1/2.
said it upped its rating on
to buy from long-term buy. Shares of PSW Technologies climbed 8 7/16, or 60.2%, to 22 1/2.
U.S Bancorp Piper Jaffray
started coverage of
with a strong buy rating and a price target of 58. Shares of iBasis slid 2 13/16, or 7.1%, to 36 15/16.
raised its price target on
by 25% to 47. Shares of Infinity Broadcasting hopped 1 15/16, or 5.1%, to 39 9/16.
SoundView Technology upped its rating on
to buy from hold and set a price target of 28. Manugistics Group climbed 2 7/16, or 13.1%, to 21 1/8.
First Boston and Merrill Lynch both started coverage of
with buy ratings and price targets of 85.Shares of Next Level popped 3 1/4 to 69 15/16.
Merrill Lynch rolled out coverage of
PSS World Medical
with a near and long-term accumulate ratings. Shares of PSS World Medical retreated 1/2 to 9 5/8.
Credit Suisse First Boston reinitiated coverage of
with a buy rating and a price target of 70. Shares of Seacor declined 1/4 to 51 3/4.
BancBoston Robertson Stephens
upped its fourth-quarter EPS estimates for
to a 2 cent-loss from a 4 cent loss. Shares of Silicon Image jumped 8 15/16, or 21.5%, to 46 15/16.
American Business Products
added 1 1/8, or 10.7%, to 11 5/8 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.
gained 5/16 to 18 after it said received marketing clearance from the
Food and Drug Administration
for its Hyprid Capturer II Gonorrhea Test.
Louis Dreyfus Natural Gas
lost 5/16 to 18 after it said it plans to more than double its 2000 exploration and development budget over this year's $210 million.
climbed 2 3/8, or 5.2%, to 47 3/8 after it named AT&T's former cable chief, Leo Hindery, as chairman and chief executive of GlobalCenter, its Internet services unit. The company also said it was considering a tracking stock or an IPO for the GlobalCenter unit.
fell 5/8 to 32 3/4 after it said it has finished relocating its headquarters to suburban Chicago, ending its operations in Greenwich, Conn. The relocation, which cut its headquarters workforce by 40%, would save the company more than $30 million starting in 2000.
stumbled 1 3/4 to 103 1/4 after it said it reduced prices by 34% on its CD-Write Plus internal and external drives. The company said the price of a CD-Writer Plus 9200i/9199i fell to $299 from $399 and its 9210e/9110e models price has dropped to $399 from $499.
leaped 4 to 115 7/8 after it unveiled a $100 million plan to construct the world's fastest supercomputer to be used to model the folding of human proteins. Learning how proteins fold is anticipated to help researchers better understand both diseases and potential cures, IBM said.
tacked on 2 1/2, or 9.6%, to 28 9/16 after it named John McGovern CFO.
Rite Aid 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. Shares of Rite Aid mounted 3 7/16, or 41.6%, to 11 11/16.
New York City
said he expects Wall Street bonuses to total roughly $13 billion for 1999, topping bonuses of about $11 billion in the last two years. Wall Street only accounts for 5% of the city's jobs, but generates 17% of its revenue.