Nasdaq 4000: Qualcomm Sets Pace as Traders Grab All the Tech They Can

The Nasdaq busted through the latest millennium mark with buyers chasing what's already up.
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SAN FRANCISCO -- Just one look at the latest seemingly outlandish price target is all it took for investors to get the

Nasdaq Composite Index

over 4000. After three straight near misses, the Comp closed above 4000 for the first time today in a rally inspired largely by

PaineWebber's

1,000 price target on

Qualcomm

(QCOM) - Get Report

.

In a reversal of

yesterday's session, the Comp gained strength in the final hour of trading while the

Dow Jones Industrial Average

stumbled. The Dow managed to scratch out its third record in the past four trading days -- closing up 7.95 to 11,484.66 -- but finished well off its session high of 11,543.08.

The tech-avenged Comp climbed 69.35, or 1.7%, to 4041.46, sparked by Qualcomm, which leapt 31% to 659 in the fallout from PaineWebber's call.

Less dramatically-- but along the same lines --

DoubleClick

(DCLK)

rose 13.1% to 249 1/8 after

Donaldson Lufkin & Jenrette

upped its price target to 300 from 190.

The

Nasdaq 100

climbed 109.73, or 3.1%, to a record 3689.52, getting assistance from tech bellwethers such as

Sun Microsystems

(INTC) - Get Report

,

Oracle

(ORCL) - Get Report

and

Yahoo!

(YHOO)

, along with Qualcomm and DoubleClick.

Today's market: Join the discussion on

TSC

Message Boards

Qualcomm also gave a boost to

TheStreet.com

Red Hots index, which rose 30.05, or 7%, to 462.68. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money. (You can check quotes on the Red Hots index and its component stocks at

http://www.thestreet.com/redhots.)

Meanwhile,

TheStreet.com Internet Sector

index rose 40.25, or 3.6%, to a record 1162.22, inspired by Yahoo! as well as

Egghead.com

(symbol)

. The retailer rose 40% after

Media Metrix

reported a heavy jump in visitors to the site for the week ended Dec. 19.

American Express Captains Dow's Advance

Dow gainers included

American Express

(AXP) - Get Report

,

Eastman Kodak

(EK)

and

Hewlett-Packard

(HWP)

.

The index's latest attempt at all-time highs was nearly sabotaged by slumping consumer giants

Procter & Gamble

(PG) - Get Report

and

Johnson & Johnson

(JNJ) - Get Report

.

Meanwhile, the

S&P 500

rose quietly further into record-setting territory, up 5.74, or 0.4%, to 1463.40. Even the

Russell 2000

got into the record books, rising 8.53, or 1.8%, to 497.01. It eclipsed at long last the previous record, 491.41, set

April 21, 1998.

AmEx's gain aside, banking stocks enjoyed only a mild rise despite the bond market's rally. The price of the 30-year Treasury bond rose 13/32 to 95 25/32, its yield declining to 6.45%. Still, the

Philadelphia Stock Exchange/KBW Bank Index

rose just 0.5%.

However, the

American Stock Exchange Broker/Dealer Index

climbed 5.8%, thanks largely to

Charles Schwab

(SCH)

, which rose 16% after forecasting its fourth-quarter earnings will exceed the consensus estimate.

Morgan Stanley Dean Witter

(MWD)

was another standout in the sector, rising 3.5%.

In the online financial sphere,

USABancshares

(USAB)

was the standout performer, rising 69% after announcing plans to launch online banking and brokerage services aimed at businesses.

Many Records, Little Volume

Today's contingent of all-time highs for major averages was set amid declining trading levels, reflecting the quasi-holiday atmosphere on Wall Street.

In

New York Stock Exchange

trading, 567.9 million shares were exchanged while advancers led declining stocks 1,989 to 1,095. In

Nasdaq Stock Market

action, 1.157 billion shares traded while gainers led 2,455 to 1,800. New 52-week lows bested new highs 236 to 98 on the Big Board while new highs led 223 to 110 in over-the-counter trading.

"Desk are already starting to trim," said Jay Meagrow, vice president of trading at

McDonald

in Cleveland, who noted his desk was nonetheless "swamped" today. Big Board volume is "probably going to lessen tomorrow and if we get people to stop putting 1,000 targets on Nasdaq stocks, that volume will slow down, too."

Marveling at the Nasdaq, Meagrow forecast that tech "probably carries us" through the end of the week. Furthermore, "I don't see a whole lot stopping this

market unless everything stops working" at midnight Dec. 31.

Meagrow saw no discernable trend today but another trader -- who requested anonymity -- noted that "all the garbage, the stuff nobody wants, is up today."

Some previously out-of-favor stocks finding some bidders today included

Philip Morris

(MO) - Get Report

,

Tyco International

(TYC)

and

Waste Management

(WMI)

. (For more on out-of-favor stocks, see

TheStreet.com's

story on value investing in the face of the screaming Nasdaq. It's part of our

Nasdaq 4000 package.)

The trader also mentioned

DuPont

(DD) - Get Report

which closed off its session high of 67 9/16 but still up a solid 2.5% to 65 7/8. Similarly, the

Morgan Stanley Cyclical Index

rose 1% to 579.95 after trading as high as 584.64.

Among other indices,

Dow Jones Transportation Average

slid 2.52, or 0.1%, to 2941.99; the

Dow Jones Utility Average

fell 1.41, or 0.5%, to 281.60; and the

American Stock Exchange Composite Index

gained 9.33, or 1.1%, to a record 851.86.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

gained 19.65 to a record 8472.58 and the

Mexican Stock Exchange IPC Index

jumped 114.04, or 1.6%, to a record 7121.79.

Wednesday'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.

)

Shares of super-stock Qualcomm were on the fly again, soaring 156, or 31%, to 659 after PaineWebber analyst Walter Piecyk initiated coverage of the stock by setting a 12-month price target of 1000. Qualcomm led the way up on the Nasdaq, as the Comp managed to close above 4,000 for the first time. Piecyk started coverage with a buy rating, stating, "we believe it represents an appropriate way to invest in the long-term growth trends of wireless and data."

Qualcomm is the developer of the wireless technology code division multiple access, or CDMA, and Piecyk wrote that he believes "by the end of the next decade, 85% of phones sold will use CDMA technology (up from 18% today)." Shares of Qualcomm soared 156, or 31%, to 656.

Mergers, acquisitions and joint ventures

Chesapeake

(CSK)

inched up 1/2 to 30 3/4 after it said it would extend its offer for

Shorewood

(SWD)

until Jan. 20. Shorewood slipped 0.8%, to 18 7/8. Yesterday, Shorewood's board asked shareholders to turn down the hostile $500 million offer from Chesapeake, calling it inadequate.

Shorewood requested that shareholders vote against replacing its current board with members hand picked by Chesapeake. Shorewood said it has held preliminary negotiations with other interested buyers but said that the company is not for sale.

Separately, Chesapeake said it plans to assume a one-time post-tax charge of roughly $21 million, or $1.19 a share, in the fourth quarter due to restructuring changes. The company said it would shut down a Mechanicsburg, Pa., assembly facility, which would reduce its workforce by 5%, or 135 employees. Chesapeake said the restructuring would result in a yearly pretax saving of roughly $11 million, or 40 cents a diluted share. Chesapeake said it sees 1999 fiscal earnings of $1.85 to $2.00 a share, which excludes any non recurring gains and restructuring charges. The six-analyst estimate sees the company posting 1999 earnings of $1.96 a share, down from the year-ago $1.98 a share. Chesapeake said it also plans to assume a post-tax charge of roughly $6 million "for certain costs" involving its offer for Shorewood.

For more on this

story, check out the coverage provided by

TheStreet.com/NYTimes.com's

joint newsroom.

CBS

(CBS) - Get Report

fell 1/2 to 60 5/16 after it said 98.7% of its shareholders favored its planned $37 billion merger with

Viacom

(VIA) - Get Report

. Viacom, which slipped 5/16 to 58, said that roughly 99.7% of its Class-A shareholders showed their approval for the transaction.

News Corp.'s

(NWS) - Get Report

Fox

division and

Time Warner's

(TWX)

cable unit entered a new long-term agreement, which calls for Fox stations' programming to be carried by

Time Warner Cable

, according to a report in

The Wall Street Journal

. News Corp. was unchanged at 38 9/16, while Time Warner climbed 11/16 to 70 5/16.

Niagara Bancorp

(NBCP)

fell 1/16 to 10 1/4 after saying it is buying

CNY Financial

(CNYF)

for $87.9 million. CNY edged up 15/16, or 5.5%, to 18.

Earnings/revenue reports and previews

Antec

(ANTC)

shed 8 1/4, or 21.6%, to 29 15/16 after it said its fourth-quarter earnings will miss the nine-analyst estimate of 30 cents a share by as much as 10 cents to 15 cents. The company said the shortfall was largely caused by lower margin levels, though it said it was acting to correct the margin shortfall. Antec said it will take a fourth-quarter restructuring charge of $16 million and that fourth-quarter revenue will be above third-quarter revenue, and almost twice that of the year-ago period.

Charles Schwab popped 5 5/8, or 16.4%, to 39 15/16, after saying it expects to post fourth-quarter net income of 19 cents to 20 cents a share, which would put it ahead of the 13-analyst estimate of 17 cents and above the year-ago 12 cents. Schwab also expects full-year earnings to come in between 69 cents and 70 cents a share, which would put it ahead of the 13-analyst estimate of 67 cents and the year-ago 42 cents.

For more on Schwab's earnings, take a look at the

story written by

TheStreet.com/NYTimes.com's

joint newsroom.

Offerings and stock actions

Cytyc

(CYTC)

gained 2 1/8 to 58 1/8 after it said it set a 2-for-1 stock split.

Oregon Steel Mills

(OS)

slipped 1/8 to 7 7/8, after it said its board adopted a shareholder rights plan to protect the company in the event of a hostile takeover bid, but added that it knew of no such action. Under terms of the plan, one preferred stock purchase right will be distributed for each share of common stock outstanding at the close of business Jan. 12.

Analyst actions

Banc of America Securities

upped its price target on

Analog Devices

(ADI) - Get Report

to 150 from 100 and raised its fiscal 2000 earnings estimate to $2.32 a share from $2.20. Shares jumped 5 7/16, or 6.5%, to 88 11/16.

Warburg Dillon Read

upped its fourth-quarter earnings estimates on

Calpine

(CPN)

to 41 cents a share from 36 cents. Calpine lost 1 7/8 to 58.

Lehman Brothers

sliced its price target on

Coca-Cola Enterprises

(CCE)

to 26 from 36 but raised it fiscal 1999 EPS estimate to 26 cents a share from 23 cents and its fiscal 2000 earnings estimate to 45 cents a share from 42 cents. Coca Cola slipped 1/2 to 20 1/8.

DLJ upped its six- to 12-month price target on DoubleClick to 300 from 190. Shares popped 28 3/4, or 13.1%, to 249 1/8.

Merrill Lynch

analyst Jeffrey Kauffman cut his intermediate-term rating on shares of

Eagle USA Airfreight

(EUSA) - Get Report

to neutral from accumulate. Eagle dropped 4 7/8, or 10.2%, to 42 29/32.

Credit Suisse First Boston

started coverage of

Fifth Third Bancorp

(FITB) - Get Report

with a hold rating. Shares climbed 1 1/8 to 72 3/4 despite the rating.

Lehman Brothers

said it maintains its

Hershey

(HSY) - Get Report

buy rating but cut its fourth-quarter estimate to 69 cents from 74 cents and its 2000 estimate to $2.45 a share from $2.50. Yesterday, the company said slow December sales and distribution problems could trim its fiscal 1999 earnings by 10 cents a share.

PaineWebber

reduced its price target on the stock to 48 from 54, while

Merrill Lynch

cut its fourth-quarter estimate to 69 cents from 81 cents a share. Merrill lowered its 2000 EPS estimate to $2.25 to $2.35 a share from a range of $2.40 to $2.50. Shares of Hershey fell 1 1/2 to 46 5/16.

Deutsche Banc Alex. Brown

sliced its first-quarter earnings estimates on

Indiana Energy

(IEI) - Get Report

to 45 cents a share from 55 cents and its 2000 estimate to $1.65 a share from $1.75. Indiana slipped 1/8 to 18.

Banc of America Securities started coverage of

Intraware

(ITRA)

at buy and set a price target of 86. Shares of Intraware shot up 23 3/16, or 49.3%, to 68 13/16.

Goldman Sachs

sliced its rating on

Sodexho Marriott

(SDH)

to market perform from market outperform and cut its fiscal 2000 estimates to 95 cents a share from $1.05. Last night, Sodexho Marriott warned investors that first-quarter earnings would be roughly 5% below the two-analyst consensus estimate of 47 cents a share.

The company blamed softer-than-expected operating margins in its corporate services business, start-up costs for new contracts and Y2K expenses for the disappointing results. The company said its disappointing first quarter could cause fiscal 2000 earnings to fall roughly 5% below the three-analyst consensus estimate of $1.05 a share.

Banc of America sliced its first-quarter earnings estimates on the stock to 44 cents a share from 46 cents and its fiscal 2000 EPS to $1.04 a share from $1.06. Shares of Sodexho Marriott lost 5/8 to 13 9/16.

Lehman Brothers sliced its fiscal 1999 estimate on

W.W. Grainger

(GWW) - Get Report

to $2.10 a share from $2.20 and its 2000 estimate to $2.35 a share from $2.60. Shares of W.W. Grainger skidded 1/2 to 48.

PaineWebber raised its price target on

Xceed

(XCED)

to 65 from 36. Shares of Xceed lifted 1 3/16 to 37 9/16.

Miscellany

AT&T

(T) - Get Report

and

Covad Communications

(COVD)

have asked a

U.S. District Court of Appeals

in the District of Columbia to throw out a

Federal Communications Commission

decision, which enables

Bell Atlantic

(BEL)

to provide long-distance service in New York. AT&T and Covad are trying to push back Bell Atlantic's debut as a long-distance carrier in New York until their dispute is resolved.

According to the 1996 Telecommunications Act, Bell Atlantic cannot be a long-distance voice and data-service provider for any of the 13 states in which it offers local service until it allows competitors into the local networks. The FCC gave its approval to Bell Atlantic, saying it provided rivals with equal access into 14 key areas of the local network in New York. AT&T and Covad claim that Bell Atlantic has not offered them an entrance into areas of the network they wanted to lease to compete in the local market. Shares of AT&T edged up 3/16 to 50 13/16, while Covad Communications added 1 7/16 to 54 1/16. Bell Atlantic slid 7/16 to 61 3/4.

Highlands Insurance

(HIC)

declined 1/4 to 9 1/8 after it said it would reduce its workforce by 120 jobs, or 12%, in order to cut costs by roughly $4.4 million. The company said the restructuring, which would result in a pretax charge of $780,000 in the fourth quarter, would end up saving $3.3 million in 2000. Highlands said the restructuring would begin in January.

Ireland's

Elan

(ELN)

submitted a new drug application to the

Food and Drug Administration

for ziconotide, a potential treatment for intractable pain. Shares of Elan gained 9/16 to 28 11/16.

Wall Street analysts who write research reports criticizing companies have run the risk of being derided by institutional investor clients, blocked from company conference calls and even fired, but now libel suits from these companies are posing a new problem for analysts, the Heard on the Street column in

The Wall Street Journal

said.

The column pointed to a defamation suit filed by

Sunrise Technologies International

(SNRS)

against both

Sturza's Institutional Research

and

Avalon Research Group

, two firms that issued separate reports on Sunrise this summer questioning the profit potential of the company. Shares of Sunrise Technologies shed 7/16 to 12.

For more on Sunrise, check out

TheStreet.com's

coverage of

the

company.

TSC's

Herb Greenberg

has also

written

extensively

on

Sunrise.

United Parcel Service

(UPS) - Get Report

mounted 3/8 to 69 3/8 after it said it hiked delivery rates in a move toward its annual year-end adjustment. UPS said higher fuel prices were not the main reason for the increase and that the company has "historically" upped rates at the end of the year. UPS said it raised its air express rates for UPS Next Day Air, 2nd Day Air and 3 Day Select commercial services by 3.5%, up from the year-ago 2.5% hike. The company also raised ground commercial rates by 3.1%, up from the year-ago average hike of 2.5%, while taking its international export rates from the U.S. up to 2.9%. The export increase is the first in three years. UPS said labor and other human costs account for the company's biggest expenses.