SAN FRANCISCO -- Meet the new market, same as the old market -- only more so.
The extreme elements in force on Wall Street were on display again today with noticeable vigor. As was the case
Friday, tech stocks failed to sustain their early impetus but maintained enough momentum to send the
Nasdaq Composite Index
to yet another record. Meanwhile, blue-chips and the bond market extended their recent struggles.
The price of the 30-year Treasury bond fell 23/32 to 95 28/32, its yield rising to 6.44% ahead of tomorrow's meeting of the
Federal Open Market Committee
. No rate change is forecast but many players expect the
to adopt a tightening bias tomorrow. Speculation of such a change restrained blue-chip stocks as well as the bonds.
Barry Berman, head of stock trading at
Robert W. Baird
in Milwaukee, called the Fed gathering "the only reason" for the blue-chips' decline. "I think there's a quarter-point increase already built into the market. So whether or not they get it tomorrow, there's just a general concern over what might be said,
such as if the stock market is targeted as a concern. So it's just the uncertainty" weighing on stocks.
However, barring something "more ominous than people expected," Berman expects the market to "move back up again" after the FOMC adjourns.
Today, however, the
Dow Jones Industrial Average
struggled after rising as high as 11,310.03 in the first hour of the session. Losses mounted as the day progressed and after trading as low as 11,110.93, the Dow closed off 113.16, or 1%, to 11,144.27. Following a similar pattern, the
shed 2.96, or 0.2%, to 1418.09 after trading as high as 1429.16 and as low as 1411.10.
The Nasdaq Comp failed to sustain its early high of 3801.93 but remained in positive territory throughout -- save for a brief moment in the final hour -- before closing up 30.81, or 0.8%, to 3783.87, its 26th record in the past 36 trading days.
Leading the Comp among big tech bellwethers were
, up 6.2% after announcing a 2-for-1 stock split, and
, up 3.6% after agreeing to buy the fiber-optics business of Italy's
Those gains helped offset setbacks by
, which each surrendered some of last week's big advance.
Additionally, Internet stalwarts such as
rose sharply, helping the Comp as well as the
, which rose 0.9%.
TheStreet.com Internet Sector
index fell 14.34, or 1.3%, to 1098.75, owing to weakness in components such as
Red Hots index rose 9.85, or 2.7%, to 370.16. 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
The Red Hots got a boost from
, which rose 5.7%. Rather than lamenting the Linux distributor's wider-than-expected loss, investors focused on Red Hat's revenue increase and 2-for-1 stock split. (
joint newsroom covered the Red Hat news in a
The Logic of It All
"Everything that's going on makes sense," said Alan Skrainka, chief market strategist at
in St. Louis. "The stock market is reacting like it should to what's taking place in the bond market. The exception, of course, is technology. I don't think it's justified
but I understand why it's happening. Investors are looking for companies that can produce very strong earnings growth in the absence of price increases."
Evincing the stark difference between investors' attitudes toward tech stocks and just about everything else, even news of mergers or stock splits or blockbuster earnings failed to inspire the latter.
So while Cisco jumped on the news of its $2.15 billion acquisition,
fell 12.3% and
Pharmacia & Upjohn
dumped 6.2% on news of their
American Stock Exchange Pharmaceutical Index
Skrainka attributed the weakness among the drug makers to the absence of a big premium in the Monsanto-Pharmacia & Upjohn deal.
"People are saying 'I bid up some drug names in the hope I'll get bought out
at a premium' and it didn't happen" in this case, he said.
slid 11.2% on news it plans to buy
for $2.2 billion. Pittway shares soared 54.7%.
And while Red Hat leapt in its split announcement,
Morgan Stanley Dean Witter
rose just 0.7% despite
reporting blowout fourth-quarter earnings and establishing a 2-for-1 stock split.
Honeywell, which recently completed its merger with
, was the biggest negative influence on the Dow. Others included Microsoft,
Johnson & Johnson
While both the majority of industry groups and individual stocks fell on the session, the
rose 0.98, or 0.2%, to 467.19.
New York Stock Exchange
trading, 905.2 million shares were exchanged while declining stocks led advancers 1,816 to 1,292. In
Nasdaq Stock Market
action 1.309 billion shares traded while losers led 2,419 to 1,871. New 52-week lows swamped new highs 279 to 85 on the Big Board while new highs led 193 to 169 in over-the-counter trading.
Among other indices,
Dow Jones Transportation Average
slid 33.95, or 1.2%, to 2884.47; the
Dow Jones Utility Average
slid 0.44, or 0.2%, to 273.83; and the
American Stock Exchange Composite Index
added 1.35, or 0.2%, to 831.15.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
gained 33.21 to 8131.40 and the
Mexican Stock Exchange IPC Index
fell 16.25 to 6943.10.
Monday's Company Report
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.
Mergers, acquisitions and joint ventures
Pharmacia & Upjohn
agreed to a merger of equals estimated at $29 billion -- or at least it
estimated at that, before the market took both stocks lower on the news. Pharmacia finished down 3 1/8, or 6.2%, to 47 1/8, while Monsanto slid 5 1/8, or 12.2%, to 36 5/8.
The merger creates the world's 11th-largest drug company, with a market capitalization of about $50 billion and total sales of $17 billion. The partners see cost savings of about $600 million a year.
said it would keep its marketing pact with Monsanto, even if Monsanto merges with Pharmacia & Upjohn. Pfizer and Monsanto's G.D Searle co-market the widely successful arthritis formula
slashed Monsanto to neutral from buy, citing disappointment that the deal included no premium for Monsanto's
For more on the
merger announcement, check out a story by
fell 3/16 to 26 5/16 after it said it has entered a deal to purchase
Energy Corp. of America
for $323 million.
Burlington Northern Santa Fe
Canadian National Railway
agreed to link up in a $19 billion stock merger. The partners expect the combined company, to be called
North American Railways
, to realize $500 million to $600 million in improved income during its first three years. Shares of Burlington retreated 3 9/16, or 12.5%, to 24 13/16, while Canadian National slipped 11/16 to 29 1/16.For more on
the merger, check out a story by
Cisco popped 3 5/8 to 103 1/4 after it announced that it will buy the optical networking systems business of Italy's
for $2.15 billion.
For more on
Cisco's acquisition , check out a story by
joint news room.
agreed to buy
in a $990 million stock deal. Maker holders will receive 0.66 of a Conexant share for each Maker share. Shares of Conexant skidded 3 5/16 to 66 5/16, while Maker Communications jumped 7 3/4, or 22.9%, to 41 3/4.
said it has entered a $580 million stock deal to buy
. The terms call for Interpublic to pay $26 a share for each NFO share upon the deal's completion. The deal includes a collar that if exceeded would allow either Interpublic or NFO to renegotiate the transaction. Shares of Interpublic stumbled 2 5/16 to 55 3/4, while NFO mounted 8 1/4, or 58.9%, to 22 1/4.
advanced 9/16 to 80 9/16 after
both plan to bid for control of
, their joint venture with
. MCI WorldCom is in the process of acquiring Sprint. Shares of France Telecom climbed 1 9/16 to 114 1/16, while Deutsche mounted 2 3/8 to 60 3/4.
ran up 2 7/16, or 26%, to 11 3/4 after said it would be acquired by
in a deal valued at $150 million.
said it has agreed to buy an interest in Brazilian wireless provider
. SBC said Telefonos de Mexico also plans to invest in the company, while
will slice its interest in Algar to 50%. Shares of Williams skidded 1/2 to 26 7/16.
CNN News Group has entered an agreement which could potentially lead to a $20 million interest in
, the flagship division of
. The purchase would immediately give CNN a little less than a 10% interest in the company with the possibility of taking no more than a 20% stake over the life of the three-year contract, which would total $20 million. The transaction calls for Leisureplanet to be the exclusive travel services provider for most CNN Web sites and purchase $30 million worth of advertising on CNN's Web sites and television network starting in 2000. Shares of Time Warner declined 1/4 to 65 7/8, while Leisureplanet Holdings advanced 1/16 to 13 7/8.
In addition, Leisureplanet said that
Warburg Dillon Read
would take a $20 million stake in its parent company Leisureplanet Holdings.
said it plans to post its offer document for
on Thursday and will leave its hostile bid open until Feb. 7. Vodafone's bid for Mannemann, launched in November, currently values Mannesmann around $135 billion. Shares of Vodafone lost 1 3/8 to 47 7/8, while Mannesmann, which did not trade, was at 238 1/2.
fell 1/16 to 20 1/2 after it agreed to acquire
in a $650 million stock swap. The deal values Star at $10.50 a share. Combined with World Access' acquisition of privately held
Long Distance International
, the Star buy gives World Access an annual revenue run rate of more than $2.3 billion. Shares of Star Telecommunications hopped 1 31/32, or 28.6%, to 8 7/8
Earnings/revenue reports and previews
slid 11/16 to 31 after it said unseasonably warm weather could shave 10 cents from its fourth-quarter EPS. The nine-analyst estimate sees the company posting fourth-quarter earnings of 73 cents a share.
slipped 1 3/16, or 5.1%, to 21 3/4 after it said it upped its capital spending budget for 2000 by $300 million, to $2.2 billion. Conoco said $1.6 billion of the budget would be spent on exploration and production. Chairman and CEO Archie Dunham said the spending plan would increase production by 5% to roughly 245 million barrels of oil equivalent next year.
was unchanged at 27 after it said it plans to downsize its structural products facility and reorganize its South America and European divisions, which would result in pretax restructuring charges between $150 million to $200 million.
was soaring 28 1/4, or 33.1%, to 113 9/16 after saying late Friday it expects its fourth-quarter earnings to beat the 22-analyst forecast of 65 cents a share. The company also set a 2-for-1 stock split.
Warburg Dillon Read
today upgraded the stock to strong buy from buy and boosted its price target to 120 from 90.
tacked on 3/4 to 28 3/8 after it reported third-quarter earnings of $1.23 a share, crushing the two-analyst estimate of 81 cents and the year-ago 70 cents.
climbed 3/8 to 12 3/4 after it reported third-quarter earnings of 43 cents a share, a penny better than the six-analyst outlook and up from the year-ago 14 cents (not including discontinued operations). The company said it's comfortable with estimates of $1.30 to $1.35 for fiscal 2000; the current First Call/Thomson Financial view calls for $1.31.
added 1 1/4, or 6.1%, to 21 3/4 after it said it expects its fourth-quarter earnings to exceed the six-analyst estimate of 14 cents a share. The company earned 15 cents in the year-earlier period.
Juno Online Services
announced its plans to increase services and cut its charges to compete with its rivals such as
. Shares of Juno leaped 12 5/8, or 77.1%, to 29.
Morgan Stanley Dean Witter
gained 1 3/8 to 129 7/16 after it reported fourth-quarter earnings of $2.84 a share, far ahead of the 14-analyst estimate of $1.96 and up from the year-ago $1.49.
For more on
Morgan Stanley's earnings, check out a story by
joint news room
soared 14 5/16, or 5.6%, to 267 15/16 after it reported a third-quarter loss of 5 cents a share, a penny wider than the three-analyst expectation and down from the year-ago break-even result. The Linux distributor also set a 2-for-1 stock split and said it may pursue a secondary share offering.
For more on
Red Hat's red-hot earnings, check out a story by
joint news room.
lost 2 1/2, or 20%, to 10 after it said it is forecasting third-quarter earnings to be 4 cents to 6 cents a share below its second-quarter report of 21 cents a share. The 10-analyst estimate sees the company posting third-quarter earnings at 28 cents a share. Steris blamed the disappointing results on higher expenses from revamping.
Merrill Lynch cut its rating on
to intermediate-term neutral from accumulate. Shares of Aetna skidded 1 3/4 to 49 3/4.
upped its price target on
to 100 from 50. Shares of Braun popped 7 1/2, or 12.7%, to 66 1/2.
Credit Suisse First Boston
analyst Lise Buyer initiated coverage of
with a buy rating. First Boston was the lead underwriter on the firm when it went public last month. Shares of Digital Impact hopped 6 9/16, or 14.6%, to 51 3/4.
initiated coverage of
with a buy rating and a price target of 63. Shares of GetThere.com slid 4 3/8, or 12.4%, to 31 1/4.
Salomon Smith Barney
started coverage of
with a buy rating and a price target of 115. E-tek Dynamics edged up 6 3/4, or 7.4%, to 97.
First Boston analyst Stephen DeNelsky initiated coverage of
with a strong buy rating and a price target of 35. Shares of InfoCure added 3 3/16, or 13.4%, to 27
Morgan Stanley Dean Witter
made positive comments on
Kulicke & Soffa Industries
, saying bookings are ahead of schedule. Shares of Kulicke & Soffa gained 3 13/16, or 10.7%, to 39 1/2.
sliced its rating on
to intermediate-term neutral, long-term accumulate rating from intermediate, long-term buy rating. Shares of Lason plummeted 12 5/8, or 52.3%, to 11 7/16.
May Department Stores
to buy from neutral and upped
to attractive from neutral. Shares of May Department stores stumbled 1/2 to 30 1/4, while Saks gained 1/4 to 15 13/16.
sliced its fiscal 2000 estimate on
to $3.30 from $4.10 a share. Shares of Progressive retreated 5 15/16, or 7.7%, 71 1/16.
Salomon Smith Barney rolled out coverage of
with a buy rating and a price target of 230. SDL were 9 7/8, or 5.9%, to 174 3/4.
Morgan Stanley Dean Witter upped its fiscal 1999 estimate on
to 54 cents a share from 42 cents. Sotheby's Holdings bounced 3 7/8, or 14.5%, to 30 7/16.
Merrill Lynch said it upped its rating on
to a near-term buy from accumulate. Vimpel-Communications added 3 3/4, or 16.4%, to 26 1/2.
Morgan Stanley Dean Witter initiated coverage of
with a strong buy rating and a price target of 80. Shares of Viatel 1 15/16 to 50 13/16.
Offering and stock actions
Check Point Software
set a 2-for-1 stock split for shareholders of record "at or around" Jan. 23 of next year. Check Point Software Technologies fell 5 to 192 13/16.
set a 2-for-1 stock split for shareholders of record Dec. 30. The company split its stock 3-for-2 this February. Shares of Oracle popped 5 5/8, or 6.2%, to 96 5/16.
New York Stock Exchange
PE Corp. Celera Genomics Group
would not comment on its stock's recent price surge. The shares soared 14, or 15.9%, to 102.
jumped 11 13/16 to 466 13/16 after it said its shareholders have given their stamp of approval to a 4-for-1 stock split.
tacked on 3/16 to 26 3/8 after it said it set a share buyback of up to 8 million shares.