controversial analysis of evil, tech stock investors are now dealing with the banality of higher prices. The
Nasdaq Composite Index's
latest record-setting rise -- the average's 22nd in the past 30 trading days -- elicited little celebration today, save for a burst of excitement in the afternoon.
In a modified repeat of
yesterday's riotous session, major proxies surrendered big early gains before recovering. The Comp spent much of the afternoon session lagging its blue-chip counterparts, which closed with solid gains, albeit off their intraday highs.
Today's midmorning swoon came after the
New York Stock Exchange
National Association of Securities Dealers
submitted a proposal to the
Securities & Exchange Commission
recommending a dramatic increase in margin requirements for day traders. But strength in financials plus continued pure, unadulterated demand for certain tech stocks left stock proxies upright at the close.
"There's definitely some interest in other stuff
but the Nasdaq continues its upward climb," said Doug Myers, vice president of equity trading at
in Atlanta. "There's a lot of money flowing into tech, especially these wild Linux types and Internet infrastructure companies. It does not seem to be waning."
Save some "external event that pops the bubble," Myers foresees continued higher prices. "I think barring any type of bent tracks, we're going to keep chugging along."
Banking stock followed the bond market higher; the 30-year Treasury rose 22/32 to 99 13/32, its yield declining to 6.17% after the
Producer Price Index
provided further evidence inflation remains subdued. (For more, see today's
Bond Focus .)
Gains by financial components such as
, as well as
Dow Jones Industrial Average
, which closed up 89.91, or 0.8%, to 11,224.70 after trading some 50 points higher around 3:30 p.m. EST.
rose 8.93, or 0.6%, to 1417.04. The index was similarly boosted by its financial components, as well as strength in recently sluggish groups. The
Philadelphia Stock Exchange/KBW Bank Index
American Stock Exchange Broker/Dealer Index
each gained about 2%. Additionally, the
S&P Retail Index
rose 2.2% while the
American Stock Exchange Pharmaceutical Index
gained 0.7% and the
Morgan Stanley Cyclical Index
Blue-chip averages were restrained by energy stocks such as
, down 3.9% as crude prices fell 3.3% to $25.50 a barrel. The
American Stock Exchange Oil & Gas Index
The tech-fettered Comp rose as high as 3636.65 early on, then slid as low as 3560.91 when word of the margin requirement proposal emerged.
But gains from bellwethers such as
-- plus a slew of smaller tech names -- supported the index, which closed up 26.11, or 0.7%, to 3620.28.
TheStreet.com Internet Sector
index also set another record, up 22.88, or 2.1%, to 1129.50. However,
Red Hots index fell 3.25 to 366.08. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.
Big movers again included smaller stocks connected to the Linux operating system.
up 37.8%. Conversely,
slid 14.1% to 20 1/8 after trading as high as 31 5/8.
Among new issues,
But it wasn't a smooth ride for all of tech.
was the Dow's biggest negative influence, falling 3.9% as investors reassessed their recent enthusiasm.
"We think the stock has gotten ahead of itself given negative earnings momentum in the next two quarters,"
analyst Steve Milunovich wrote in a report today. "We are neutral on the shares intermediate term."
Semiconductor and equipment stocks such as
were also notable losers. The
Philadelphia Stock Exchange Semiconductor Index
slid 2.9% after
BancBoston Robertson Stephens
analyst Dan Niles reportedly reiterated some concerns. Meanwhile, recent high-flyers suffered some retrenchment, including
, down 22.5%.
The Russell 2000 rose 1.83, or 0.4%, to 466.73 as market breadth improved as the session progressed.
In NYSE trading, 987 million shares were exchanged while advancers led declining stocks 1,550 to 1,492. In
Nasdaq Stock Market
action 1.55 billion shares traded -- the fourth-busiest session in history -- while gainers led 2,142 to 2,014. New 52-week lows outpaced new highs 316 to 83 on the Big Board while new highs led 228 to 138 in over-the-counter trading.
Out with the New
Although few say tech stock momentum is waning, some market players are turning their attention elsewhere.
Stocks without "four letters or 'Dot something' are absolutely ignored right now," said Sam Ginzburg, managing director of equity trading at
. "Because of all that volatility
in tech stocks it's taking away from meat and potatoes-type investing. We're tired of 'em. It's a huge pyramid scheme."
Ginzburg declined to name names but said "there are so many good, quality companies that are so cheap to buy right now, it's unbelievable.''
Because many investors have such outsized gains in tech stocks this year, however, the trader expects tax-loss selling in more traditional issues to continue through year-end.
But "talking to major portfolio managers they say it's a buyer's market," he said. "If we keep the long bond down and get another goon round of earnings, we're going to have a nice little January effect."
Among other indices,
Dow Jones Transportation Average
rose 50.16, or 1.8%, to 2874.94; the
Dow Jones Utility Average
slid 1.26, or 0.5%, to a 52-week low of 273.18; and the
American Stock Exchange Composite Index
fell 1.44, or 0.2%, to 827.86.
For the week, the Dow slid 0.5%, the S&P fell 1.1%, the Nasdaq rose 2.8%, the Russell added 0.5%, the DOT jumped 9.8%, the Dow transports shed up 1.8%, the Dow utilities lost 3.5% and the Amex Composite fell 0.9%.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
gained 112.64, or 1,4%, to 7933.7 and the
Mexican Stock Exchange IPC Index
rose 61.69 to 6780.02.
Friday'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
was unchanged at 47 1/4 after saying it will join forces with Dutch
and buy a 100% stake in German mobile phone operator
. KPN jumped 8 3/4, or 12.7%, to 77 5/8. The deal struck between BellSouth and KPN frustrates a $9.3 billion bid by
for E-Plus. BellSouth, which already owns a 22.5% stake in E-Plus, said it is taking a $9.4 billion loan from KPN to buy shares in E-Plus owned by
. Shares of Vodafone dropped 1 3/8 to 49 3/8.
climbed 1 1/4 to 117 and
popped 3 1/4 to 95 3/4 after the companies said the
Federal Trade Commission
had granted early termination of the waiting period for their merger. The $1.8 billion deal, announced last month, still needs approval from the
Securities and Exchange Commission
, owner of
, fell 1 3/16 to 78 after it approached British publisher
News Communications & Media
about making a cash offer for the group. Newscom is currently valued at about $284 million. Today, Newscom rejected Gannett's approach, saying it was too low.
Fuji Heavy Industries
is buying a 20% stake in Fuji for approximately $1.4 billion. Shares of GM fell 11/16 to 72. Fuji Heavy makes Subaru brand cars.
slipped 1/8 after saying it will sell two properties to
for $195 million in cash. Penn gained 9/16, or 7%, to 8 3/4.
gained 1 9/16 to 43 13/16 after
The Wall Street Journal
reported its board is expected to formally discuss today ways of splitting its
pharmaceutical business from its agricultural business, which is struggling.
National Westminster Bank
added 1 to 128 after saying it cancelled a $1.62 billion tender offer that it planned in November to block
Bank of Scotland's
hostile offer. NatWest said that it axed the tender offer, which was set for Dec. 20 to Jan. 14, after
Royal Bank of Scotland
emerged as rival bidder for NatWest just two days after the offer was announced. NatWest said it would set new plans to "return capital to shareholders" in the future.
popped 5 3/4, or 7%, to 88 1/4. said it has agreed to a three-year, $600 million wireless network supply deal with
AT&T slipped 13/16 to 57.
rose 7/16 to 23 7/16 after it said it retained an unnamed investment bank to help it sell, or otherwise explore, alternatives for its Latin American investments as part of a change in strategy. The company has decided to focus on a strategy toward developing asset-backed trading and marketing in Europe.
Earnings/revenue reports and previews
Alexander & Baldwin
inched up 5/16 to 22 1/8 after it said it would write down about $12 million of its investment in
in the fourth quarter. The company also said it increased its stock repurchase plan by 1 million shares.
jumped 4 3/16 after it said that its new warranty accounting will slice third-quarter earnings by a penny.
flew 10 3/16, or 16.6%, to 71 7/8 after it posted fourth-quarter earnings of 3 cents a share, a penny ahead of the 17-analyst estimate and up from the year-earlier loss of 5 cents a share, which excluded merger-related charges.
lost 3 1/2, or 19.2%, to 14 3/4 after it warned its fourth-quarter results will not be as strong as expected. The company said it still sees record results for 1999, with earnings-per-share up 5% to 7%.
rose 1 1/2, or 8.2%, to 19 13/16 after it said it expects to take a fourth-quarter charge of $21.7 million.
gained 1 5/16, or 5.9%, to 23 5/8 after it said it would assume a fourth-quarter charge between 42 to 47 cents a share, as a result of a restructuring announcement in November.
slipped 9/16 to 21 5/8 despite saying it expects to meet fourth-quarter estimates. The current nine-analyst estimate is for 49 cents a share.
fell 13/16 to 23 9/16 after it said its fiscal 2000 spending budget is set for $444 million, topping the $423 million for 1999. The company said the budget contains $235 million for base infrastructure spending and $91 million for plant turnarounds. In addition, $118 million would be allocated to growth programs.
Credit Suisse First Boston
to strong buy from buy. Apache fell 1/4 to 32.
Salomon Smith Barney
sliced its rating on
to outperform from buy. AXA fell 1 1/8 to 35.
First Boston late yesterday upgraded
to strong buy from buy. Shares fell 5/16 to 18 15/16.
initiated coverage of
with a strong buy rating and a price target of 80. Shares popped 12 1/8, or 22.8%, to 65 1/4.
to intermediate-term accumulate from intermediate-term neutral. Caterpillar gained 7/8 to 46 11/16.
First Boston started coverage of
with a hold rating. Shares of Centennial were unchanged at 2 15/16.
said the banking industry looks oversold, adding that only selected names are rated a buy. The brokerage firm advised investors to add to positions of selected bank stocks when valuations reflect excessive fear, as they currently do. Names to focus on include
Bank of New York
First Tennessee National
. Shares of Bank of New York added 3 15/16, or 10.4%, to 41 1/2, while Chase Manhattan popped 11/16 to 78 9/16. First Tennessee climbed 5/16 to 29 1/8 and Wells Fargo gained 1/8 to 44 7/8.
Deutsche Banc Alex. Brown
to strong buy from buy. Harcourt General edged up 3 3/4, or 10.3%, to 40.
Merrill Lynch reiterated a near-term neutral, long-term buy rating on
. Shares of IBM slid 4 7/16 to 109.
Warburg Dillon Read
raised its target on
to 68 from 58 , while PaineWebber increased its price target to 70. Merrill reiterated a near- and long-term neutral rating, while SG Cowen upped it to a buy. Robertson Stephens reiterated a buy rating and upped its earnings estimates. Shares of National Semiconductor retreated 3, or 5.8%, to 48.
First Boston analyst James Parmelee raised his price target on
to 100 from 80. Shares of Nortel climbed 5 3/4, or 6.9%, to 88 1/4.
initiated coverage of
with a strong buy rating and a price target of 25. Shares of OneMain.com advanced 7/8, or 5.1%, to 17 11/16.
upped its intermediate-term rating on
to accumulate from neutral. Shares of Piedmont General fell 9/16 to 29 7/8.
Robertson Stephens analyst Sue Billat said she raised her 2000 earnings estimates on
to $1.02 from $1.00 a share. Photronics dwindled 13/16 to 24.
PaineWebber initiated coverage of
with an attractive rating and a price target between 95 to 100. Shares of Proxicom climbed 3 to 89 5/8.
Donaldson Lufkin & Jenrette
upped its rating on
Ticketmaster Online-City Search
to buy from market performer. Shares of Ticketmaster Online-City Search mounted 4 1/16, or 10.2%, to 43 5/8.
Banc of America
initiated coverage of
Triad Hospitals Holdings
with a buy rating and a price target of 17. The stock is a spin-off of
Shares of Triad Hospital Holdings bounced 3/16 to 14..
resumed coverage of
as a buy. Warburg Dillon Read maintained a strong buy rating and a price target of 60. Shares of Tyco added 2 1/8, or 7.5%, to 30 3/8.
with a market performer rating. Shares of Unitrin were unchanged at 38 3/16.
Lehman upped its rating on
to buy from outperform. Shares of USX Steel hopped 1 1/4 to 29 1/2, while National Steel gained 11/16, or 11.1%, to 6 7/8.
Merrill increased its rating on shares of
to near-term buy from accumulate. Vitesse Semiconductor advanced 2 1/2, or 5.3%, to 49 1/16.
to outperform from neutral. WHX shares climbed 5/16 to 9 1/16.
SG Cowen said it initiated coverage of
with a buy rating. Xircom shares climbed 5 1/2, or 10.3%, to 58 1/2.
Offering and stock actions
rose 1/16 to 22 3/4 after it said it approved a 10 million-share increase for its buyback plan.
stumbled 1/16 to 10 1/2 after it said it added 4.5 million shares, or about 10% of its common stock, to its current 3.5 million-share repurchasing program.
Morgan Stanley Dean Witter
priced a 3.6 million-share IPO for
, a business-to-business online auctioneer, at an above-range price of $48 per share. The anticipated range for the offering had been $40-$42. Initially, this IPO was slated to come in the $14-$16 range.
whipped out coverage of FreeMarkets with a buy rating and set a 12-month price target of 300. Shares of FreeMarkets soared 231 1/4, or 481.7%, to 280.
weighed in on
the offering earlier this week. (See table below for latest stock price results)
climbed 7 13/16, or 13.2%, to 67 1/8 after it said its board approved a 2-for-1 stock split.
plans an offering of 3 million common shares in the first quarter. Shares of Leap Wireless edged up 7/8 to 56.
said it set a $40 million share repurchasing plan. Shares of Wabash lifted 3/16 to 14 1/4.
The "Heard on the Street" column in the
took a look at
Pixar Animation Studios'
and its stock price's inability to cash in on the success of
Toy Story 2
. Shares have fallen more than 25% since the film's release before Thanksgiving, while marketing and distribution partner
share price seems to be enjoying a boost. Shares of Pixar climbed 5/16 to 38 7/8, while shares of Disney popped 3/8 to 28.
In the Inside Wall Street column in
this week, penned by Gene Marcial,
is mentioned as a takeover target. James Boyle of
First Union Securities
said, with its undervalued assets and great management, the company is attractive, the column reported. Shares of Adelphia added 5/8 to 61 11/16.
Elsewhere, the column offers a bullish look at
, a developer of Internet traffic management systems, and
. Shares of Radware tacked on 3/8 to 50 3/4, while Gentner Communications hopped 2 5/16, or 17.7%, to 15 1/2.
As originally published this story contained an error. Please see
Corrections and Clarifications.