Nasdaq Continues Its Record Run as Feeding Frenzy Commences Early

Most major indices finished on the upside today in relatively busy action.
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Ravenous tech-stock investors could not wait for the official start of the season of conspicuous consumption, bidding some of the market's most richly priced names higher today. Blue-chip averages also gained, but investors' appetites for non-tech names was far less robust.

The

Nasdaq Composite Index

rose 77.56, or 2.3%, to 3420.43, racing back into record territory after

yesterday's respite.

The Comp got a lift from big components such as

Cisco

(CSCO) - Get Report

, up 4.5% to an all-time high after signing a $200 million deal to provide networking equipment to a Swedish telecommunications company (with a very long and unpronounceable name).

Other bellwethers hitting new highs included

Sun Microsystems

(SUNW) - Get Report

and

Nextel Communications

(NXTL)

, up 17.8% after receiving a favorable ruling from a U.S. Appeals court and positive comments from

Morgan Stanley Dean Witter

. The

Nasdaq 100

jumped 3.6% to a record 3108.08.

Elsewhere,

Intuit

(INTU) - Get Report

rose 14.5% to a 52-week high of 50 3/8 after its narrower-than-expected losses, posted

last night , were met with a slew of positive analyst comments today.

Internet favorites such as

Yahoo!

(YHOO)

also prowled higher, lifting

TheStreet.com Internet Sector

index up 18.75, or 2%, to 968.04. Additionally,

TheStreet.com

Red Hots index rose 10.97, or 3.39% to 334.45. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.

Traditional tech bellwethers gave blue-chip gauges a boost as well. The

Dow Jones Industrial Average

rose 12.54, or 0.1%, to 11,008.17 after trading as high as 11,044.26. The

S&P 500

gained 12.44, or 0.9%, to 1417.08, while the Russell 2000 rose 1.48, or 0.3%, to 455.93.

In addition to

Microsoft

(MSFT) - Get Report

, and

Intel

(INTC) - Get Report

-- up 4.1% following an upgrade from

Bank of America Securities

-- the Dow was hoisted by

Hewlett-Packard

(HWP)

and

AT&T

(T) - Get Report

. Ma Bell rose 5.1% after

The Wall Street Journal

furthered speculation that the company will issue tracking stock for its wireless business.

Other blue-chip standouts included

American Home Products

(AHP)

, up 3.3% after receiving preliminary approval for a settlement with people who took its "fen-phen" diet drugs. Also,

Avon Products

(AVP) - Get Report

rose 11.4%, thanks to an upgrade from

Prudential Securities

.

Coinciding with the bond market's drop, financials were among the few major industry groups with notable losses today. Fittingly,

American Express

(AXP) - Get Report

and

J.P. Morgan

(JPM) - Get Report

were among the Dow's biggest laggards.

The price of the 30-year Treasury bond finished down 6/32 to 98 27/32, its yield rising to 6.21%. An upward revision to third-quarter gross domestic product to 5.5% from 4.8% plus continued weakness in the dollar vs. the yen kept the downward pressure on bonds.

"We thought interest rates were going to turn around -- they didn¿t," said Sam Ginzburg, Managing director of equity trading at

Gruntal

. "Hopefully we'll see the economy slow and the bond market come back. If it doesn't, we're going to run into a lot more problems."

While acknowledging the Comp's impressive performance, Ginzburg said "it feels like we're going to get smacked" next week. "Everybody is saying things are okay, but I don't feel that irrational exuberance anymore."

Today was busier than a typical preholiday session, he said, suggesting market players were "selling what they could" and "squaring up" ahead of the end of the month.

"If you don't have a name stock or one where management is going to pump it up at a conference or aren't in the right sector, everything else is dead and going one way -- down," he said. "I do see the Comp is up but if it gives it up, if it has one bad day they're going to come after everything else with a vengeance."

In

New York Stock Exchange

trading, 737.3 million shares were exchanged while declining stocks led advancers 1,625 to 1,391. In

Nasdaq Stock Market

action 1.277 billion shares traded while gainers led 2,146 to 1,861. New 52-week lows outpaced new highs 244 to 41 on the Big Board while new highs led 145 to 77 in over-the-counter trading.

All Bets Are On

Like Ginzburg, many market players are concerned about the market's narrowing breadth and the rise in bond yields. But Scott Bleier, chief investment strategist at

Prime Charter

, expects equities to remain strong for the duration of 1999.

A big reason being there's "so much performance" for fund managers to "chase," Bleier said, noting nearly 400 stocks with at least $500 million market caps are up over 100% year-to-date. Given the multibillion dollar market caps of many companies with only a fraction of the revenue, he predicted the "capital shift" will continue. Soon, "virtual" companies will be buying up "old world" names because of their compelling "value," he said (confessing value is a "dirty" word these days).

"This is the ultimate casino and the money is coming in fast and hard," the strategist continued. "Believe it or not, you have better odds here than in a casino. Now wonder gambling companies are doing so poorly."

Bleier, who called the top in e-commerce stocks back in

mid-April before their swoon, believes the current hot names in business-to-business and Internet infrastructure will ultimately suffer a similar comeuppance.

But, the market "is going to be strong for the rest of the year," he said. "There might be a few days of drawdowns, but this casino doesn't want to die so fast."

Among other indices, the

Dow Jones Transportation Average

shed 56.96, or 1.9%, to 2923.33; the

Dow Jones Utility Average

rose 1.64, or 0.6%, to 283.20; and the

American Stock Exchange Composite Index

dipped 0.02 to 822.84.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

rose 55, or 0.7%, to 7764.6 and the

Mexican Stock Exchange IPC Index

jumped 71.29, or 1.2%, to 6182.04.

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.

)

Among high-flying Nasdaq gainers, Nextel Communications popped 17 3/8, or 17.8%, to a record 115 1/16 close after it said Dan Akerson would remain the company's chairman through 2000, a year longer than expected.

Mergers, acquisitions and joint ventures

Coca-Cola

(KO) - Get Report

rose 1 to 67 15/16 after saying it will not adjust its offer to purchase

Pernod-Ricard's

Orangina

soda brand, after a French government decision to stop the acquisition. The French government threw out the offer due to concerns that Coke was creating a monopoly in the French soft drink market.

General Electric

(GE) - Get Report

lost 0.5% to 136 7/8 and

Time Warner

(TWX)

climbed 3 3/16 after saying GE hasn't offered to sell

NBC

to Time Warner. The denials came after Rupert Murdoch said on the

Fox News Channel

that GE offered to sell NBC to Time Warner for $25 billion. Murdoch is chairman and CEO of

News Corp.

(NWS) - Get Report

, which owns

Fox News Channel

. Shares of News Corp slipped 3/16 to 32 7/8.

Goldman Sachs

(GS) - Get Report

fell 5/8 to 77 1/8 after saying it is talking with some market players, including the

Chicago Stock Exchange

, about creating an electronic options exchange.

Korea Thrunet

(KOREA)

jumped 5 1/2, or 16.4%, to 39 5/16 after it said Microsoft plans to exercise its option to purchase an additional 6% interest in the company, boosting its holding to 10.5%. Once the option is exercised, Microsoft will be eligible to appoint one of Korea Thrunet's directors. Microsoft rose 2 1/8 to 91 11/16.

Separately, analysts say Microsoft's plans to take a majority interest in Japanese cable television giant

Titus Communications

, is part of its effort to expand data pipelines for disseminating its product lines globally, reported in the

Nihon Keizai Shimbun

. In January, Microsoft took a stake in the Britain-based cable operator

NTL Group

and in May, it forged a capital tie-up with AT&T, in order to pursue telecom investment opportunities domestically.

Mead

(MEA)

slipped 1.2%, to 36 1/16 after saying it sold a 50% stake in

Northwood

, which owns and operates a pulp mill in Prince George British Columbia, to

Canfor

. The purchase price was $635 million, payable by cash of $480 million and the issuance to Mead subsidiary

Nexfor

, a total of $155 million of convertible subordinated debentures of Canfor.

Unilever

(UN) - Get Report

climbed 1.1%, to 57 7/16 after saying it's buying

Amora Maille

for about $744 million. Amora Maille is a French mustard maker.

Earnings/revenue reports and previews

ING Groep

(ING) - Get Report

lost 9/16 to 60 11/16 after saying its nine-month operational net profit soared 51% to 2.42 billion euros. The Dutch financial services group said it expects operational net profit for the entire year to increase by 40% to 45% compared to 1998.

Offerings and stock actions

American Industrial Properties

(IND)

inched up 3/16 to 11 7/8 after saying it has brought

Salomon Smith Barney

and

Prudential Securities

on board, "to evaluate strategic alternatives to increase shareholder value." American Industrial said it is considering options including a merger, sale or other business combination.

Amcore Financial

(AMFI)

rose 11/16 to 24 7/8 after it said it has set 1.4 million share repurchasing program.

Electronic Boutique

(ELBO)

fell 7/8 to 20 1/2 after it said it was offering 3.5 million common shares at 21 3/8.

Hormel

(HRL) - Get Report

climbed 2 5/8, or 6.5%, to 43 1/16 after it said its board approved a 2-for-1 stock split.

Insurance titan

Metropolitan Life

filed with the

Securities and Exchange Commission

to raise up to $6.5 billion in an IPO. MetLife said it plans to sell 225 million shares, or 31% of the company, and expects to price the shares between $14 to $24 a share.

CIBC World Markets

priced 3.75 million shares of

PNV

(PNVN)

at $17 a share, the top of the expected range. Shares turned in a lackluster performance, sliding 1 1/2, or 8.8%, to close at 15 1/2.

Analyst actions

J.P. Morgan started coverage of

Annuity & Life Re

(ALRE)

with a buy rating and a price target of 34. Annuity rose 3/4 to 27.

Credit Suisse First Boston

raised its rating on shares of

Autodesk

(ADSK) - Get Report

to buy from hold. Autodesk climbed 3/4 to 27.

Prudential Securities

upped its rating on

Avon Products

(AVP) - Get Report

to strong buy from hold. Avon jumped 3, or 11.4%, to 33 1/2.

Deutsche Banc Alex. Brown

raised its rating on

Black & Decker

(BDK)

to strong buy from buy. Shares climbed 2, or 5.3%, to 47.

First Boston started coverage of

Bsquare

(BSQR) - Get Report

with a buy rating. Bsquare slipped 1 to 46 1/16 despite the news.

Robertson Stephens

initiated coverage of

Celgene

(CELG) - Get Report

with a long-term attractive rating. Celgene lost 2 15/16 to 59 3/4.

Deutsche Banc Alex. Brown said it rolled out coverage of

Digital Insight

(DGIN)

with a buy rating. Digital climbed 3/16 to 44 3/4.

Merrill Lynch

rolled out coverage on

Epcos

(EPC) - Get Report

with a buy rating and a price target of 71. Epcos gained 2 11/16 to 59 1/2.

Banc of America

raised its rating on

Intel

(INTC) - Get Report

to strong buy from buy. Intel climbed 3 1/4 to 82 3/16.

Robertson Stephens

reiterated its buy rating on Intuit . First Boston reiterated a strong buy rating and

Warburg Dillon Read

raised Intuit's price target to 70 from 37. Intuit jumped 6 3/8, or 14.5%, to 50 3/8.

Merrill Lynch upgraded

Kent Electronics

(KNT)

to intermediate-term accumulate from neutral. Shares inched up 5/16 to 24 1/16.

Deutsche Banc raised its rating on

Martin Marietta Materials

(MLM) - Get Report

to strong buy from buy. Martin Marietta slipped 9/16 to 38 11/16.

Merrill Lynch reinstated coverage of

Masco

(MAS) - Get Report

with a buy rating and set a price target of 39. Masco moved down 11/16 to 26.

Merrill raised its price target on shares of

Methode Electronics

(METHA)

to the mid-40s from around 30. Methode moved up 1 5/8, or 6.4%, to 27 1/4.

Morgan Stanley Dean Witter cut its rating on

Novell

(NOVL)

to neutral from outperform. Novell slipped 15/16 to 21 1/16.

First Boston started coverage of

SDL

(SDLI)

with a buy rating. Shares rose 1 3/16 to 168 3/4.

Salomon Smith Barney

upped its rating on

Sovereign Bancorp

(SVRN)

to buy from outperform. Sovereign climbed 7/16 , or 5.5%, to 8 7/16.

First Boston started coverage on

Sycamore Networks

(SCMR)

with a buy rating. Sycamore popped 5 1/16 to 238 7/16.

SG Cowen

upgraded shares of

Vignette

(VIGN)

to strong buy with a 250 price target. Vignette shot up 13 5/16, or 7.3%, to 196 5/16.

Deutsche Banc cut its rating on shares of

Vulcan Materials

(VMC) - Get Report

to buy from strong buy. Vulcan fell 1 to 39 1/2.

Miscellany

Ikon Office

(IKN)

climbed 3/4, or 11.7%, to 7 3/16 after saying it reached an agreement to settle a class-action lawsuit and will pay $111 million before taxes. Ikon said it would take a one-time charge for the settlement.

National City

(NCC)

lost 1 1/8 to 25 after it said the

Internal Revenue Service

had disallowed some of its tax deductions and was seeking $200 million.

Newbridge Networks

(NN)

lost 3/16 to 22 7/16 after it laid off 300 staff at its Ottawa headquarters and announced 400 additional layoffs in other operations. Newbridge, which plans to cut another 200 U.S. jobs on Monday, is slashing expenses after opening the door to takeover bids last week.

The Heard on the Street column in the

Journal

reports

IBM

(IBM) - Get Report

is facing scrutiny for its use of an accounting method which raised operating income by lowering reported costs. IBM dropped 1 to 104 1/16.

IBM reported a 53% rise in operating income to $8.9 billion, on a mere revenue jump of only $63.4 billion, or 12%, in the nine months ended Sept. 30. At issue is the manner in which IBM booked one-time gains of $4 billion from the sale of its Global Network business to

AT&T

(T) - Get Report

in the second and third quarters.

Value America

(VUSA)

dropped 3/4 to 14 11/16 after it said Glenda Dorchak has been named CEO, replacing Tom Morgan who's leaving for personal reasons.

Westpoint Stevens

(WXS)

rose 1, or 5.6%, to 19 after it announced it plans to consider strategic and financial options for the company and said it has withdrawn its tender offer for 6% of its shares.