Those hoping, or those predicting, that the market's mammoth upside momentum from
Friday would spill into today are likely cringing at the market's performance, which was anything but impressive.
Meanwhile in the news, investors gave their blessing to
in a stock swap valued at nearly $35 billion. Both Class B and Class A shares of Viacom rose strongly. CBS also made a solid advance.
In other M&A news,
slumped in the wake of the announcement that it is buying
, which for its part soared.
On Friday, of course, major stock proxies were sporting huge advances on hopes that the
Federal Open Market Committee
might not raise short-term interest rates when it meets early next month. That optimism and the market's rally was fueled by the release of the August
. Nonfarm payrolls rose a much-less-than-expected 124,000.
Those "maybe the
won't do it" hopes seemed to ebb a bit today as interest-rate worries gave traders some pause. Also, a horrible session in the Treasury market didn't help stocks and was cited for the market's lackluster showing.
And those market participants who had hoped that things in the market would pick up after the Labor Day holiday would be disappointed by today's action, most notably with the volume on the
New York Stock Exchange
Jay Suskind, head of institutional equity trading at
, pointed out that he's expecting the rest of the week to be light volume-wise.
Dow Jones Industrial Average
fell 44.32, or 0.4%, to 11,034.13.
was the largest drag on the Dow, while on the plus side,
were the two biggest positive influences on the average.
slumped 6.79, or 0.5%, to 1350.45.
Nasdaq Composite Index
slipped 5.85, or 0.2%, to 2837.26. The Nasdaq Comp enjoyed its largest point gain ever Friday, exploding nearly 109 points to the upside.
gave up 0.6%. The
Philadelphia Stock Exchange Semiconductor Index
ended in the plus column, rising 2.27, or 0.5%, to 438.24.
TheStreet.com Internet Sector
index advanced a respectable 5.79, or 1%, to 601.61.
Airline stocks got hammered in part after
lowered earnings estimates on several major airlines. The
American Stock Exchange Airline Index
swooned 4%. Airline stocks were also significant drags on the
Dow Jones Transportation Average
, which stumbled 1.5%.
Philadelphia Stock Exchange Oil Service Index
soared 4.8%. Crude oil futures soared today. Meanwhile,
took a look at the dying of takeover talk in the sector in a story
Banks slipped throughout the session after surging on Friday and ended the session with a sizable bruise. The
Philadelphia Stock Exchange/KBW Bank Index
A bullish report on the wireless services realm and companies therein out of
helped beef up that sector. Lehman upgraded its ratings and boosted its price targets on
. The firm also raised its price target on
, but maintained its rating on the stock.
In futures, the S&P 500 futures contract fell 10.10 to 1352.40.
Dave Eberhart, analyst at
Optima Investment Research
in Chicago, said the market "sort of ran out of gas" following Friday's rally. He said the S&P 500 contract has support around 1342-1343. Today he pointed out that the decline in bonds was a negative for the market today.
Overall, the market isn't in a stellar time of year historically. In its September equity market report, Optima pointed out that the over the past 49 years, the S&P 500 has shed on average 0.3% in September, its worth month of the year. In October, however, the index does make a comeback posting an average gain of 0.4%.
Going forward, in the absence of earnings data, the market's mostly going to be speculating about the direction of interest rates, Eberhart said. Also, he said the market's starting to see earnings warnings coming out which could leave the market vulnerable.
Speaking of earnings, Bruce Steinberg, chief economist at
, was out with positive revisions to his earnings estimate for companies in the S&P 500. The economist raised his 1999 and 2000 operating earnings estimates to $51 from $49.50 in 1999, and for 2000, up to $54 from $52.
Meanwhile, in a research note, he wrote that he doesn't think the FOMC will tighten at its October meeting "but possibly" in November. The FOMC is slated to meet Oct. 5 and then Nov. 16.
As for the Treasury market, the 30-year Treasury bond gave up a beefy chunk of its
Friday advance. The benchmark 30-year Treasury bond was down 25/32 to 100 21/32, yielding 6.08%.
Looking ahead, Fed Chairman
is scheduled to give a speech at 11:45 a.m. EDT tomorrow at
Grand Valley State University
in Grand Rapids, Mich. The event honors former President
. Greenspan was chairman of the President's Council of Economic Advisers under Ford. Although Greenspan is expected to go down memory lane in his address, you just never know what the G-Man's going to say.
On the economic front, on Friday, the August
Producer Price Index
, the key gauge of inflation at the wholesale level, is slated for release at 8:30 a.m. EDT and will be closely watched by stock and bond traders.
On the NYSE, decliners defeated advancers 1,646 to 1,325 on 715.3 million shares. On the
Nasdaq Stock Market
, losers beat winners 1,982 to 1,892 on 914.8 million shares.
While decliners beat advancers on both markets, on the other hand, more new highs were posted than new lows on the NYSE and the Nasdaq.
On the NYSE, 74 issues set new 52-week highs while 73 touched new lows. On the Nasdaq, 144 issues set new 52-week highs while new lows totaled 59.
On the Big Board, CBS was most active with 12.7 million shares changing hands.
On the Nasdaq,
was most active with 24.6 million shares changing hands. It was flat at 49 3/8.
Among other indices, the
Dow Jones Utility Average
bade farewell to 5.01, or 1.6%, to 314.60, while the
American Stock Exchange Composite Index
gained 7.28, or 0.9%, to 793.67.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
rose 52.36, or 0.8%, to 7058.50 and the
Mexican Stock Exchange IPC Index
dropped 140.94, or 2.8%, to 4910.06.
Tuesday'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.
CBS and Viacom unveiled merger plans which call for Viacom to buy CBS, combining their media and entertainment divisions in a $37 billion stock swap. Viacom Chairman Sumner Redstone will remain chairman and CEO of the merged company, while current CBS CEO Mel Karmazin will be president and chief operating officer. CBS rose 1 3/4 to 50 11/16 while Viacom vaulted 2 5/8, or 5.8%, to 47 15/16.
King World Productions
added 1 to 40 1/2 after saying it will delay until Sept. 14 its shareholder vote on a planned $2.5 billion merger with CBS. The decision followed news of the Viacom deal, though both CBS and King World reiterated their commitment to proceed with the merger.
Mergers, acquisitions and joint ventures
rang up 1/16 to 7 15/16 after saying it has inked a deal with
Advanced Micro Devices
to use AMD's microprocessors. AMD gained 2 1/4, or 10.7%, to 23 1/4.
moved up 1/4 to 12 1/16 after saying it signed a deal with
to sell Clarus business procurement software. Shares of Compaq lost 5/16 to 22 15/16.
Fleet Financial Group
slipped 1 3/4, to 37 13/16 after it forged a $1.4 billion deal to sell 278 branches and other assets to
, lately up 1 3/32. The bank is attempting to meet regulatory requirements for its proposed acquisition of competitor
, lately down 1 7/16 to 44 1/2. Fleet announced plans in March to purchase BankBoston, establishing the eighth-largest bank in the U.S. Sovereign said it would receive $12 billion in deposits and an estimated $8 billion in loans, in what is being called the largest proposed bank divestiture.
Federal Realty Trust
slipped 15/16 to 23 after saying it will spin off its retail site unit to shareholders as a new public company. The REIT also said a third party may acquire most of its community shopping centers through a merger for a combination of cash and stock for about $18 a share.
Hilton Hotels lost 5/8 to 11 3/16 after it agreed to pay $4 billion in cash, stock and debt for Promus Hotels. The deal calls for Hilton to pay $38.50 per share in cash for 55% of Promus shares. The remaining 45% of the Promus stock would be exchanged for Hilton common stock at a rate determined by market conditions. Promus CEO Norman Blake Jr. said he will not take a position with the merged company once the transaction is complete. Shares of Promus popped up 3 7/16, or 11%, to 34 13/16.
Dutch supermarkets group
added 1 3/8 to 37 1/16 after acquiring Spanish supermarket chains
. Ahold said it will operate seven supermarket chains in southern Spain and Madrid when the deals are completed.
lost 3/4 to 86 7/8 after setting an agreement with
Tele 1 Europe's
Finnish division to provide its DX 200 switching system to the Nordic telecom operator's customers by September.
Patriot National Bank
slipped 1/16 to 9 15/16 after the company said it hired
Keefe Bruyette & Woods
to look for potential acquisitions as the commercial bank restructures into a bank holding corporation.
plummeted 5 5/8, or 28%, to 14 1/2, and
inched up 11/16 to 16 7/8 after the companies said they had ended merger talks, scuttling a potential $50 million deal. Professional said its board had decided to kill the deal with FirstFed when it concluded it would not secure the $23.50 per share the banks had agreed on earlier this year.
Russian cell-phone operator
rose 3/4 to 15 15/16 after it said it was in talks with strategic partner
of Norway for joint financing of up to $300 million in investments.
Earnings/revenue reports and previews
said it's comfortable with its third quarter and year estimates. The 11-analyst estimate calls for earnings of 34 cents a share in the third quarter and $1.11 for the year. After the company gave analysts a performance update the stock was looking a bit ugly, down 4 1/8, or 9.1%, to 41 3/16 . An Avon spokesman told
the company continues to be hurt by the strong dollar in certain markets.
was unchanged at 37 3/4 after reporting that same-store sales for August were up 6%.
was unchanged at 15 1/2 after saying it expects to report disappointing third-quarter earnings of 21 cents a share, missing the 12-analyst estimate of 26 cents.
lost 2 1/8 to 59 1/8 after it said it expects third-quarter operating earnings -- excluding gains-- will be lower than expected because of a decline in insecticide sales. The eight-analyst estimate called for earnings of $1.70 a share.
Sun International Hotels
darkened 3 7/8, or 14.6%, to 22 3/4 after saying it will miss analyst estimates by at least 40%. The ten-analyst estimate calls for third-quarter earnings of 50 cents a share. The company said it expects to report earnings of 20 cents to 30 cents a share before charges.
added 2 5/16, or 6.6%, to 37 1/2 after posting fourth-quarter earnings of 23 cents a share, beating both the 12-analyst estimate of 21 cents and the year-ago 16-cent gain. The retailer also said that board member and former president and COO Beryl Raff would become its acting CEO after Robert DiNicola resigned from the position. DiNicola will remain the company's chairman.
Offerings and stock actions
ACE Cash Express
was unchanged at 15 1/16 after the company said it would buy back about $4 million worth of its common stock partly for employee stock option plans.
gained 1 11/6, or 7.4%, to 24 11/16 after it added 4 million additional shares to its current share repurchasing program, raising the possible total of the buyback to 6.4 million shares. The company said the increase gives it authorization to repurchase about 12% of its 55 million outstanding shares.
airline analysts Candace Browning and Mike Linenberg sliced their estimates on