And ... action!

Relative to recent history, major averages were downright sloth-like today until some late-day histrionics sent traders scurrying into the weekend. The

Nasdaq Composite Index

and the

S&P 500

each spurted to new highs once again, but the

Dow Jones Industrial Average

failed to complete the trifecta.

The party line among most market players was that today's was a sleepy session. Maybe so, but one trader said the last hour was marked by "people chasing stocks they're smelling a deal on."

Names he'd heard in the takeover rumor mill included:

Gemstar International Group

(GMST)

, which rose 2.7%;

Borden Chemical & Plastics

(BCU)

, up 14.7%; and

Charles Schwab

(SCH)

, which gained a further 6.3%.

"The amount they're chasing is crazy," the trader said, requesting anonymity. "I think things are toppy. If something happened somewhere to turn this around, the downside is pretty severe. If I have any hint I can play something on the short side and not get absolutely crushed, I'll do it."

Part of the something happening somewhere could be the postclose earnings warning from

Compaq

(CPQ)

, which said it expects to report first-quarter earnings of 15 cents a share. The

First Call

consensus calls for earnings of 31 cents.

The trader declined to reveal his shorts (even off the record!) but added he's only going long names "I feel have a real limited downside and tremendous upside. I'm not taking any big shots over the weekend."

Bristol-Myers Squibb

(BMY) - Get Report

is one name he is long.

The

Nasdaq Composite Index

was the strongest performer throughout the session, rising 19.66, or 0.8%, to an all-time high 2593.05. Technology stocks reverted back to form as the market's favored group, with Internet names leading the way.

Oracle

(ORCL) - Get Report

and

MCI WorldCom

(WCOM)

led traditional tech bellwethers in over-the-counter trading. Meanwhile, Compaq (oops),

Motorola

(MOT)

and

LSI Logic

(LSI) - Get Report

notched solid gains in Big Board action.

But it was far from an all-encompassing uprising among tech stalwarts.

Dell

(DELL) - Get Report

,

Hewlett-Packard

(HWP)

and

Seagate

(SEG)

were among leaders with notable losses.

Additionally,

Intuit

(INTU) - Get Report

lost 3.8% after

Credit Suisse First Boston

cut its recommendation.

The

Nasdaq 100

closed up a scant 0.3%; the

Morgan Stanley High-Tech 35

rose 0.2%; while the

Philadelphia Stock Exchange Semiconductor Index

dipped 0.1%.

Internet proxies were less restrained, however.

TheStreet.com Internet Sector

index rose 21.17, or 3%, to a record 731.93 while

TheStreet.com E-Commerce Index

gained 3.10, or 2.4%, to a record 131.82.

Outside the Net gauges,

theglobe.com

(TGLO)

rose 35.3% after setting a 2-for-1 stock split.

However, the

Dow Jones Industrial Average

closed down 23.86, or 0.2%, to 10,173.84 after rising as high as 10,212.13. The index emerged from an intraday low of 10,094.47 but was unable to overcome weakness in

Union Carbide

(UK)

, which fell 6.5% after merger rumors were refuted and

Morgan Stanley Dean Witter

issued a downgrade.

General Motors

(GM) - Get Report

was also a big drag on the index.

Meanwhile, the

S&P 500

employed a late-day surge to set another new high of its own, up 4.37, or 0.3%, to 1348.35.

Airlines were a bright spot amid rumblings of a fare hike by

Continental

(CAIB)

, which rose 7.1%, plus an aviation agreement between the U.S. and China. The

American Stock Exchange Airline Index

gained 4%. In reaction, the

Dow Jones Transportation Average

climbed 41.00, or 1.2%, to 3370.40.

Energy plays and retailers were also standouts. The

Philadelphia Stock Exchange Oil Service Index

rose 5.1% and the

American Stock Exchange Retail Index

gained 1.2%.

The

Russell 2000

gained 5.97, or 1.5%, to 405.86.

In

New York Stock Exchange

trading, 716.1 million shares were exchanged while gainers led losers 1,694 to 1,270. In

Nasdaq Stock Market

activity 1.1 billion shares were exchanged -- the third straight billion-plus-share session -- while advancers led 2,194 to 1,791. Moreover, new 52-week highs bested new lows 92 to 79 on the Big Board and by 120 to 87 in over-the-counter trading.

Stop Worrying and Love the Bomb

Even the threat of World War III -- however remote -- failed to rattle financial markets to any measurable degree today. The Kremlin denied early morning reports its nuclear missiles have been redirected toward

NATO

countries. But President

Boris Yeltsin

did warn that Russia could not let the deployment of NATO ground troops in Kosovo go "unanswered," should

President Clinton

change his pledge on that front.

Given the president's penchant for ...

er

...

umm

¿ changing his mind, it's a little surprising market players weren't even a little concerned about Yeltsin's threat.

Basically it's just a quiet day," said Brian Piskorowski, market analyst at

Prudential Securities

, who confessed keeping one eye (at least) on a new Palm Pilot this afternoon. "The biggest fireworks this morning were what's going on in Europe; even

PPI

is a nonevent. We played our cards earlier in the week. We're going to sit back, ponder what's gone on thus far and start it again on Monday."

Reflecting on the market's moves this week, Piskorowski (speaking before the Compaq bombshell) said traders are clearly expecting positive earnings news in the coming days and weeks. "Now it becomes a question of put up, or shut up," he said. "And it's not only, 'What have you done for me in the first quarter,' but, 'What does the second half look like?' That's what the Street is watching and waiting for."

The analyst acknowledged the market looks ripe for a bout of profit-taking, but the long-term outlook remains positive and the "next advance" will be accompanied by improving breadth, he said.

Prudential remains favorably disposed on energy and financial stocks, looking forward to "easier comparisons" in the second half of the year, he said. That forecast is "predicated on a pickup in the global demand side, which lends credence to a view consumer products should bottom," he added.

Procter & Gamble

(PG) - Get Report

and

Colgate-Palmolive

(CL) - Get Report

are likely beneficiaries.

Among other indices, the

Dow Jones Utility Average

slid 0.78, or 0.3%, to 296.33; and the

American Stock Exchange Composite Index

gained 5.57, or 0.8%, to 727.50.

The price of the 30-year Treasury bond fell 11/32 to 96 27/32, its yield rising to 5.47%.

For the week, the Dow industrials rose 340.49, or 3.5%; the S&P 500 gained 54.58, or 4.2%; the Nasdaq Comp climbed 99.34, or 4%; the Russell 2000 added 7.12, or 1.8%; TheStreet.com Internet index climbed 74.50, or 11.3%; TheStreet.com E-Commerce Index gained 15.70, or 13.5%; the Dow transports added 61.24, or 1.9%; the Dow utilities gained 1.32, or 0.4%; and the Amex Composite rose 16.20, or 2.3%.

Elsewhere in North American equities today, the

Toronto Stock Exchange 300

lost 42.83, or 0.6%, to 6889.77 and the

Mexican Stock Exchange IPC Index

rose 29.49, or 0.6%, to 5204.88. For the week, the TSE 300 gained 264.96, or 4%, and the IPC gained 274.51, or 5.6%.

Friday's Company Report

By Heather Moore
Staff Reporter

(

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.

)

Three not-so-little IPOs -- all Internet- or computer-related -- caught the session's biggest company-news headlines, which wasn't all that tough for what ended as a fairly quiet trading day. (Can't say as much for the after-hours day; see Compaq below.)

  • Extreme Networks (EXTR) - Get Report shot up 38 3/8, or 225.7%, to 55 3/8 after Morgan Stanley Dean Witter priced its 7 million-share IPO above range at $17. The company's software is used to handle traffic on local area computer networks.
  • iTurf (TURF) rocketed 35 1/2, or 161.3%, to 57 7/16 after BT Alex. Brown and Hambrecht & Quist priced its 4.2 million-share IPO top-range last night. iTurf, whose offering range was raised to $21 to $22 from $10 to $12, is the online unit of teen clothing retailer dELiA*s (DLIA) , picked up 5/16 to 31 3/4.
  • And USInternetworking (USIX) soared 36 1/8, or 172%, to 57 1/2 after Credit Suisse First Boston priced its 6 million-share IPO above range. The company's service makes it possible for clients to access and use business and software applications over the Internet.

As noted above, theglobe.com climbed 20 5/8, or 35.3%, to an all-time high of 78 15/16 after last night announcing it plans to split its stock 2-for-1. Internet stocks continued their recent run toward outer space. A few standouts were

Inktomi

(INKT)

, which rose 27 11/16, or 26.6%, to an all-time high of 132 3/16;

Net.B@nk

(NTBK)

, which rose 24 5/8, or 25.8%, to an all-time high of 119 1/2; and

TeleBanc Financial

(TBFC)

, which rose 11 9/16, or 11.6%, to an all-time high of 112 1/2.

Compaq excelled 1 5/16 to 30 15/16 before issuing a first-quarter profit warning after the closing the bell. The world's largest PC maker now expects earnings of 15 cents a share, less than half the 33-analyst forecast for 31 cents. Compaq, which earned 1 cent in the year-ago period, blamed lower demand and increased pricing pressure.

Mergers, acquisitions and joint ventures

Ascend Communications

(ASND) - Get Report

slipped 1/8 to 98 1/16 after the

European Union Commission

approved

Lucent Technologies'

(LU)

acquisition of the company. Lucent lowered 5/16 to 63 5/8.

Separately,

Vitesse Semiconductor

(VTSS)

skidded 6 9/16, or 11.4%, to 51 on word from analysts that Lucent, the company's largest customer, will outsource some of its telecommunications equipment production. Last night, the company posted second-quarter earnings of 22 cents a share, a penny ahead of the 15-analyst estimate and higher than the year-ago 15 cents. Today, Prudential lifted its 1999 earnings estimate for the company to 90 cents a share.

e.spire Communications

(ESPI)

jumped 2 11/16, or 21.5%, to 15 3/16 after

Business Week's

Inside Wall Street column said the company has been the subject of takeover talk. Topping the list of companies rumored to be interested in buying e.spire, the column said, is

Qwest

(QWST)

, which tacked on 3 7/8 to 89.

Monsanto

(MTC) - Get Report

picked up 7/16 to 46 after announcing it's selling

NSC Technologies

, a pharmaceutical intermediates and bulk active chemicals business, to

Great Lakes Chemical

(GLK)

for $125 million. Great Lakes added 9/16 to 38 15/16.

Earnings/revenue reports and previews

Cerner

(CERN) - Get Report

shed 3 1/16, or 19.8%, to an annual low of 12 1/2 after last night estimating it will record first-quarter earnings of 7 cents to 9 cents a share, which would fall below the 21-analyst outlook for 16 cents. The company, which made 11 cents in the year-ago period, cited delays in purchasing decisions.

EndoSonics

(ESON)

sank 2 3/16, or 30.4%, to 5 1/32 after last night warning its first-quarter earnings probably will come in at a nickel a share, 2 cents shy of the seven-analyst forecast. The company, which lost 7 cents in the year-ago period, blamed a slower-than-expected rollout of its WaveWire product line and an ongoing wait for approval of its Vintage balloon catheter in Japan.

Hardinge

(HDNG)

tumbled 5/8 to 13 15/16 after saying it expects first-quarter earnings of 21 cents to 23 cents a share. The two-analyst estimate called for 40 cents. The company said the early weeks of the quarter saw very weak demand, with improvement as the quarter progressed.

Key Energy Services

(KEG) - Get Report

sloughed off 7/16, or 11.3%, to 3 7/16 after last night warning it sees a third-quarter operating loss of $1.15 to $1.20 a share due, in part, to depressed oil prices. The four-analyst forecast called for a loss of 22 cents vs. the year-ago profit of 35 cents. Key also said it started a recapitalization plan designed to reduce debt, increase shareholder equity and provide additional working capital.

Objective Systems Integrators

(OSII)

gave up 3/16, or 5.9%, to 3 1/16 after last night saying its third-quarter results will fall below estimates because of slower sales. The four-analyst view called for a loss of 3 cents vs. the year-ago loss of 5 cents.

Analyst actions

Biogen

(BGEN)

soured 5 7/16 to 114 7/16 after

BancBoston Robertson Stephens

cut the stock to long-term attractive from buy and Hambrecht & Quist lowered it to market perform from buy. Yesterday, the company posted first-quarter earnings of 58 cents a share, in line with estimates.

Cytec Industries

(CYT)

expanded 1 1/4, or 5.8%, to 22 7/8 after

Deutsche Bank Securities

raised it to buy from accumulate.

Gymboree

(GYMB)

surged 9/16, or 5.1%, to 11 21/32 after

J.P. Morgan

started coverage with a market perform.

Inuit gave up 4 3/16 to 106 1/16 after Credit Suisse First Boston downgraded it to buy from strong buy.

Skywest

(SKYW) - Get Report

advanced 1 1/2, or 6.3%, to 25 1/2 after

Merrill Lynch

lifted it to near-term buy from accumulate while maintaining its long-term buy.

Union Carbide stumbled 3 5/16, or 6.5%, to 48 1/16 after Morgan Stanley Dean Witter lowered it to neutral from outperform.

Miscellany

Genentech

(GNE) - Get Report

shaved off 11/16 to 84 13/16 after saying it's in talks with the

U.S. Attorney for the Northern District of California

to try to resolve the government's investigation of the company's promotion of a human growth hormone during the late 1980s and early 1990s. Genentech is discussing a settlement in which it would pay a criminal fine and restitution of $50 million.

Guidant

(GDT)

leapt 3 9/16, or 5.8%, to 65 1/4 after last night agreeing, as part of a settlement of a patent lawsuit, to pay $35 million to

Angeion

(ANGN)

for a royalty-free license to its current and pending patents covering heart stimulation devices. Angeion, which fell 7/32, or 35%, to an all-time low of 7/16, agreed to an injunction prohibiting sales of the Sentinel Model 2010 defibrillator.

IBM

(IBM) - Get Report

lost 11/16 to 186 5/16 after a

Business Week e-biz

report said the company plans to set up a Web site selling its entire line of PC products directly to small businesses and consumers.