Nasdaq 4000 Deferred, but Stunning Gains Send Wall Street Off Smiling

The Nasdaq didn't grab the brass ring, but the year's 81% gainer joined the Dow and the S&P on record ground.
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Merry Christmas.

All of us.

Everyone.

Even the

Russell 2000

.

Most major indices set records in this euphoric day of trading, including the

Nasdaq Composite Index

, which breached 4000 midday for the first time ever. It closed about 40 points below that number, on this, the last day before the three-day holiday break. The

Dow Jones Industrial Average

and the

S&P 500

also closed at record levels, the Dow doing so for the first time in months.

The Nasdaq traded as high as 4001.63 just after noon EST but couldn't hold onto its millennial surge, trailing off in the last hour of the day to finish up 32.14 (which at one time, say, two months ago, was considered a solid gain for the Comp), or 0.8%, to a record 3969.44. That's the Comp's 29th record in the past 39 trading days.

The Dow zoomed to an intraday high of 11,443.07 and closed with a still-remarkable gain of 202.16, or 1.8%, to 11,405.76. That record close is the blue-chip proxy's first since

Aug. 25.

Among Dow components,

Johnson & Johnson

(JNJ) - Get Report

closed up 4, or 4.4%, to 95 9/16;

Hewlett-Packard

(HWP)

was up 5 11/16, or 5.3%, to 112 5/8;

American Express

(AXP) - Get Report

rose 3 7/8, or 2.4%, to 159 1/4; and

United Technologies

(UTX) - Get Report

rose 2 1/16, or 3.6%, to 59 9/16.

The S&P peaked intraday at 1461.44 and finished with a leap of 22.35, or 1.6%, to 1458.34.

Market internals were much better than in the Nasdaq's frenzied surge Tuesday after the

Fed

left interest rates unchanged. But volume was relatively thin today, not unexpectedly, and market participants were somewhat dismissive of the gains for that reason.

Today's Market: Join the discussion on

TSC

message boards.

"I wish we were doing it on a billion instead of 500 million shares," said Arthur Hogan, chief market analyst at

Jefferies

. "This is a week unto itself. You have to X this out in terms of your long-term strategy. It's an aberration, and these days before a holiday tend to be aberrations. You don't have the full attention of investors today."

Hogan did like the market's breadth, though. The advance-decline line came out favorable on the

New York Stock Exchange

, 1,908 to 1,139, on 729 million shares. Advancers beat out decliners on the Nasdaq also, 2,223 to 1,968, on 1.26 billion shares.

A total of 103 new 52-week highs were made on the NYSE, compared with 233 new lows. The Nasdaq showed 278 new highs and 129 new lows.

Almost every sector participated today. The

American Stock Exchange Pharmaceutical Index

gained 2.6%; the

Morgan Stanley Cyclical Index

rose 2.2%; the

Philadelphia Stock Exchange Oil Service Index

was up 4.6%, and the

Philadelphia Stock Exchange Forest & Paper Products Index

gained 3.3%.

Internet Stocks Left Behind Today

Oddly, one of the sectors that

didn't

join in today's collective celebration was the Internet and its representative bellwether names.

TheStreet.com Internet Sector

index slumped 19.58, or 1.7%, to 1128.52 today.

Amazon.com

(AMZN) - Get Report

ran into a wall of resistance today, losing 7.9%, or 7 3/4, to 90 on a split-adjusted basis.

CMGI

(CMGI)

also lost ground today, closing down 4 13/16 to 270 13/16.

eBay

(EBAY) - Get Report

was a loser, too, down 7 3/16, or 4.8%, to 142 5/16, and

RealNetworks

(RNWK) - Get Report

shed 19 13/16, or 13%, to 133 9/16.

Maybe that sector was the one paying attention to another dreary day in the bond market. Treasuries, which bounced higher in the morning, sputtered through an abbreviated session and ended the day down again, off 14/32 to yield 6.49%. That's the highest yield of the year. Contrary to expectations for an end-of-year rally, the bond market has suffered in December as much as in any other month this year.

But continued inflows into stocks, and stock funds, have allowed the market to ignore rising interest rates. Some believe that rising interest rates will assert themselves as a force in the stock market again, but it won't be an issue until next year. One can sense from talking to strategists

"One day, the bond is going to cause a problem," said Gary Kaltbaum, chief technical analyst at

GSG Securities

in Boca Raton, Fla. "But we're riding what the market tells us. There's no sign saying that this is going let up. You have stocks that have gone parabolic without taking a breath. Someday this will end, but we're not good enough to know when."

Among the soaring parabolic stocks was

Commerce One

(CMRC)

, whose 3-for-1 split was effective after today's close. It jumped 48 3/4, or 8.9%, to an all-time high of 598.

Software firm

Vitria

(VITR)

posted a gigantic percentage gain, rising 38, or 19.8%, to 231.

Novell

(NOVL)

rose 7 1/4 to 34 5/16, and

Oracle

(ORCL) - Get Report

gained 1 11/16 to close at 106 11/16.

Dell

(DELL) - Get Report

was the Nasdaq's most actively traded stock, rising 2 7/16 to 52 11/16 on 41.5 million shares.

Celera Genomics

(CRA)

, a biotech company, was among the Big Board's big movers, rising 32 7/8, or 29.6%, to 144.

Orbital Sciences

(ORB)

rose 23% to 15 15/16 on news that

NASA

chose the company's Pegasus rocket to launch two satellites.

A close above 4000 for Nasdaq will have to wait. Hogan doesn't think it'll be long.

"We'll see more of this as next week wears on," he said. "The classic winners will be doing much better. Stocks will get window-dressed even more, and there'll be more bipolarization on lackluster volume."

Among other indices, the

Dow Jones Utilities Average

closed the day up 3.79, or 1.4%, to 281.21, while the

Dow Jones Transportation Average

was up 48.96, or 1.7%, to 2887.70. The

American Stock Exchange Composite Index

rose 6.85, or 0.8%, to an all-time high of 846.28.

For the week, the Dow rose 1.3%, the S&P gained 2.6%, the Nasdaq surged 5.8%, the Russell jumped 3.5%, the DOT added 1.4%, the transports fell 1.1%, the utilities advanced 2.5% and the Amex Composite improved 2%.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

gained 105.02, or 1.3%, to 8367.2 and the

Mexican Stock Exchange IPC Index

rose 98.5,or 1.4%, to 6933.78.

Thursday's Company Report

By Eileen Kinsella
Staff Reporter

(

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

)

Commerce One soared before, during and after it announced a 3-for-1 split of its common stock. The stock split will be effected as a stock dividend on Dec. 23 to shareholders of record at the close of business on December 3, 1999. Commerce One, the top Nasdaq gainer, closed up 48 3/4, or 8.9%, to a record 598, after bouncing off an intraday trading high of 625 1/2. The stock has been on a tear since Monday when David Garrity of

Dresdner Kleinwort Benson

in New York slapped a price target of 1,000 on the stock.

Mergers, acquisitions and joint ventures

Eygpt-based

EFG-Hermes Holdings

said that

Citigroup

(C) - Get Report

affiliate

Citicorp International Finance Corp.

has agreed to take a 20% stake in the company. The interest is valued at roughly $40 million. Citigroup gained 1 to 56.

Comcast

(CMCSA) - Get Report

climbed 4 3/8, or 8.6%, to 53 1/8 after it agreed to buy the 45% stake in cable operator

Comcast MHCP Holdings

owned by the

California Public Employees' Retirement Systems

for $750 million.

Nextel

(NXTL)

gained 8 3/8, or 8.7%, to 104 15/16 after it said it dropped an $8.31 billion bid for

NextWave

in a filing with the

Securities and Exchange Commission

. Nextel cited "significant" developments in NextWave's bankruptcy case.

This year's Nasdaq star,

Qualcomm

(QCOM) - Get Report

, wasn't as bright as usual today, losing 19 1/8 to 466 1/2 today. (Of course for this highflying stock, it's a mere 4% drop). After yesterday's close, Qualcomm announced that Japan-based

Kyocera

(KYO)

has agreed to purchase Qualcomm's consumer phone division for an undisclosed amount. Qualcomm said the sale would result in a onetime pretax charge of roughly $30 million in the first-quarter of fiscal 2000.

The deal calls for Kyocera to acquire Qualcomm's wireless phone businesses that use

Code Division Multiple Access

as well as its phone inventory, manufacturing equipment and customer orders. Kyocera also entered a five-year agreement to buy Qualcomm's CDMA chipsets and system software. The deal is set for completion by the end of February 2000.

Lehman Brothers

upped its price target on Qualcomm to 520 from 450.

Banc of America Securities

lifted its 2000 earnings estimates to $4.00 from $3.85 per share.

Swisscom

(SCM) - Get Report

gained 1 1/4 to 41 3/4 after it said it has agreed to partnerships with

Siemens

and

Cisco

(CSCO) - Get Report

to modernize Swiss telecommunications. Siemens and Cisco are set to begin work as early as January. Cisco added 1 15/16 to 104 7/16.

Lehman Brothers said it "slightly reduced" its position in Cisco and put the proceeds into

Applied Materials

(AMAT) - Get Report

in its U.S. strategy portfolio for 2000. Applied Materials rose 7/16 to 121 5/8.

Norway-based

Telenor

said it holds the right to up its $1.9 billion offer for Ireland's

Esat Telecom

(ESAT)

but said it is not currently considering an increase. Shares of Esat rose 1/8 to 90. Yesterday, Telenor raised its offer to Esat by $300 million.

Warner-Lambert

(WLA)

gained 2 3/16 to 85 1/8 after it said a Delaware state court has set a Jan.10 court date to review its motion to block

Pfizer's

(PFE) - Get Report

attempt to replace Warner-Lambert's board. The court date marks a victory for Warner-Lambert in the heated merger battle with Pfizer. Shares of Pfizer inched up 5/16 to 34 1/16.

The battle began after Pfizer launched a hostile bid for Warner-Lambert despite its plans to link with

American Home Products

(AHP)

. AHP ended the day down 1 at 39..

Vodafone Airtouch

(VOD) - Get Report

gained 1/2 to 49 after CEO Chris Gent said the takeover bid for

Mannesmann

(MNNSY)

should be considered final, and there are no plans to launch a sweetened offer. Gent said that only a competing bid from another company would prompt Vodafone to consider upping its bid.

Earnings/revenue reports and previews

Micron Technology

(MU) - Get Report

dropped 2 1/16 to 73 15/16 after it posted first-quarter earnings of $1.19 a share after yesterday's close, beating the 23-analyst estimate of 85 cents and the year-ago 19-cent loss.

Deutsche Banc Alex. Brown

upped its 2000 earnings estimate to $3.79 from $1.80.

Sharper Image

(SHRP)

climbed 1 1/4, or 8.4%, to 16 1/16 after it said its same-store sales for the holiday shopping season have reached "double-digit" growth so far. Last year, December sales rose 8%. CEO Richard Thalheimer said Web sales have risen six-fold in the period.

Offerings and stock actions

Mesa Air

(MESA) - Get Report

inched up 1/4, or 5.7%, 4 11/16 after it said it has set a share buyback of up to 10% of its common stock.

Snyder Communications

(SNC)

climbed 3 3/16, or 20.2%, to 19 after it said it retained

Deutsche Banc Alex. Brown

to help it explore strategic alternatives.

Analyst actions

Morgan Stanley Dean Witter

upped its rating on

Boeing

(BA) - Get Report

to outperform from neutral and set a price target of 48. Boeing gained 1 13/16 to 41 3/16.

Merrill Lynch

upped its rating on

Brightpoint

(CELL)

to near-term accumulate from neutral. Brightpoint gained 3 7/16, or 30.2%, to 14 7/8.

Bear Stearns

initiated coverage of

Brocade Communications

(BRCD)

with a buy rating and set a price target between 200 to 205. Brocade bounced up 7 7/16 to 158 1/2.

US Bancorp Piper Jaffray

upped

Comdisco's

(CDO)

fiscal first-quarter EPS estimate to 35 cents from 25 cents and raised its price target to a range of 45 to 50. CDO lost 2 to 38 1/2.

Morgan Stanley Dean Witter

raised it price target on

Home Depot

(HD) - Get Report

to 110 from 90. Home Depot gained 1 3/16 to 97 1/2.

Lehman Brothers raised

Idec

(IDPH)

to buy from outperform and raised its price target to 117 from 73. Shares popped 9 1/4, or 10.8%, to 95 5/16.

Warburg Dillon Read

cut its fiscal 2000 loss estimate on

Imclone Systems

(IMCL)

to 74 cents a share to $1.16 a share and upped its fiscal 1999 loss estimate to $1.52 a share from 50 cents a share. Imclone fell 1 7/8 to 39.

Merrill Lynch upped shares of

Inktomi

(INKT)

to near-term accumulate from neutral. Inktomi gained 15 1/4, or 8.7%, to 191 1/2.

Warburg Dillon Read upped its rating on

Mylan Laboratories

(MYL) - Get Report

to buy and set a price target of 31. Shares gained 3/4 to 24 5/8.

Piper Jaffray cut its fourth-quarter estimate on

Research in Motion

(RIMM)

to 6 cents a share from 7 cents and fiscal 2001 estimate to 45 cents from 50 cents. Shares rose 3/4 to 44 1/4.

Credit Suisse First Boston

rolled out coverage of

Rockwell International

(ROK) - Get Report

with a hold rating. Rockwell moved up 13/16 to 48 5/8.

PaineWebber

initiated coverage of

Semco Energy

(SMGS)

with an attractive rating and set a price target of 15. Semco shares inched up 1/16 to 12 1/4.

Merrill Lynch raised its rating on

Tandy

(TAN) - Get Report

to near-term buy from accumulate. Tandy tacked on 3 5/8, or 8.5%, to 46 1/8.

Goldman Sachs cut its 2000 earnings estimate on

Tektronix

(TEK)

to 85 cents a share from $1.00. Tektronix shrugged off the news, and climbed 3/4 to 36 5/8.

Miscellany

IBM

(IBM) - Get Report

inched up 5/8 to 108 5/8 after

The Wall Street Journal

reported it has filed a lawsuit against competitor

EMC

(EMC)

, claiming that EMC infringed upon a patent agreement and committed fraud by moving the patents to a shell company.

The Journal

reported that EMC said the proceedings were frivolous and it had fulfilled the agreement. EMC gained 1 7/8 to 101 1/8 despite the news.

Microsoft

(MSFT) - Get Report

slipped 1/16 to 117 7/16 after it said late yesterday that it has tapped company executive John Connors to be its new CFO. Connors is replacing

Greg Maffei

, who stepped down to accept the CEO position at Vancouver-based

Worldwide Fiber

. This morning, First Boston maintained its strong buy rating on the stock, saying it feels Maffei's resignation would not have "any meaningful impact" on the company. PaineWebber raised its price target on Microsoft to 150.

For more on the changing of the financial guard at Microsoft, take a look at the

story written last evening by

TheStreet.com/NYTimes.com

joint newsroom.

Orbital Science

(ORB)

gained 3, or 23.2%, to 15 15/16 after it said its rocket was chosen by

NASA

to launch two satellites.

As originally published, this story contained an error. Please see

Corrections and Clarifications.