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.
Nasdaq Composite Index
rose 77.56, or 2.3%, to 3420.43, racing back into record territory after
The Comp got a lift from big components such as
, 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
, up 17.8% after receiving a favorable ruling from a U.S. Appeals court and positive comments from
Morgan Stanley Dean Witter
jumped 3.6% to a record 3108.08.
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
also prowled higher, lifting
TheStreet.com Internet Sector
index up 18.75, or 2%, to 968.04. Additionally,
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
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
-- up 4.1% following an upgrade from
Bank of America Securities
-- the Dow was hoisted by
. 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
, up 3.3% after receiving preliminary approval for a settlement with people who took its "fen-phen" diet drugs. Also,
rose 11.4%, thanks to an upgrade from
Coinciding with the bond market's drop, financials were among the few major industry groups with notable losses today. Fittingly,
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
. "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."
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
, 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
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
rose 1 to 67 15/16 after saying it will not adjust its offer to purchase
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.
lost 0.5% to 136 7/8 and
climbed 3 3/16 after saying GE hasn't offered to sell
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
, which owns
Fox News Channel
. Shares of News Corp slipped 3/16 to 32 7/8.
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.
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
, 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
and in May, it forged a capital tie-up with AT&T, in order to pursue telecom investment opportunities domestically.
slipped 1.2%, to 36 1/16 after saying it sold a 50% stake in
, which owns and operates a pulp mill in Prince George British Columbia, to
. The purchase price was $635 million, payable by cash of $480 million and the issuance to Mead subsidiary
, a total of $155 million of convertible subordinated debentures of Canfor.
climbed 1.1%, to 57 7/16 after saying it's buying
for about $744 million. Amora Maille is a French mustard maker.
Earnings/revenue reports and previews
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
inched up 3/16 to 11 7/8 after saying it has brought
Salomon Smith Barney
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.
rose 11/16 to 24 7/8 after it said it has set 1.4 million share repurchasing program.
fell 7/8 to 20 1/2 after it said it was offering 3.5 million common shares at 21 3/8.
climbed 2 5/8, or 6.5%, to 43 1/16 after it said its board approved a 2-for-1 stock split.
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
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.
J.P. Morgan started coverage of
Annuity & Life Re
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
to buy from hold. Autodesk climbed 3/4 to 27.
upped its rating on
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
to strong buy from buy. Shares climbed 2, or 5.3%, to 47.
First Boston started coverage of
with a buy rating. Bsquare slipped 1 to 46 1/16 despite the news.
initiated coverage of
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
with a buy rating. Digital climbed 3/16 to 44 3/4.
rolled out coverage on
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
to strong buy from buy. Intel climbed 3 1/4 to 82 3/16.
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
to intermediate-term accumulate from neutral. Shares inched up 5/16 to 24 1/16.
Deutsche Banc raised its rating on
Martin Marietta Materials
to strong buy from buy. Martin Marietta slipped 9/16 to 38 11/16.
Merrill Lynch reinstated coverage of
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
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
to neutral from outperform. Novell slipped 15/16 to 21 1/16.
First Boston started coverage of
with a buy rating. Shares rose 1 3/16 to 168 3/4.
Salomon Smith Barney
upped its rating on
to buy from outperform. Sovereign climbed 7/16 , or 5.5%, to 8 7/16.
First Boston started coverage on
with a buy rating. Sycamore popped 5 1/16 to 238 7/16.
upgraded shares of
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
to buy from strong buy. Vulcan fell 1 to 39 1/2.
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.
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.
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
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
in the second and third quarters.
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.
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.