For roughly a week and one very bad day, tech stocks lumbered and lagged, and were generally lugubrious while cyclical stocks lollygagged their way into favor. Since
Monday, however, high-tech has unashamedly muscled its way back to the front of the line, and today was no exception.
The dominant event on Wall Street was the fallout from
unsolicited $62 billion bid
last night to acquire
. The offer topped by 17% the value of an existing merger agreement between MediaOne and
. In an earlier
looked into the Ma Bell-MediaOne-Comcast saga, which somewhat obscured the bigger picture today; while secondary names followed big-cap tech higher, other blue-chip groups mainly sagged.
Nasdaq Composite Index
rose 29.08, or 1.1%, to 2590.69. The index closed down from its intraday best of 2603.10 but still nearly eclipsed its all-time high of 2598.81 just four sessions after suffering one of its worst days ever.
The tech-encrusted index was inspired by traditional bellwethers such as
But the index got a bigger lift from fallen angel
, which gained 15.4% on takeover rumors.
Traders said the market reacted to speculation of a 3Com takeover on
Silicon Investor, itself fueled by comments about a possible bid for 3Com by
from Michael Murphy, fund manager and publisher of
California Technology Stock Letter
reported possible interest in 3Com by
"We bid it up ahead of the weekend, if nothing happens we'll lose a few dollars," one market player said ruefully.
Meanwhile, Net giant
jumped 10.4%, helping
TheStreet.com Internet Sector
gain 20.76, or 3.2%, to 680.07.
In addition, the
rose 2.97, or 0.7%, to 431.82, while the
American Stock Exchange Composite Index
pushed further into record territory, rising 11.98, or 1.6%, to 770.36.
Bolstered by the aforementioned tech giants (save Amazon.com), the
rose as high as 1363.70 but faltered in the late going to finish down 1.97, or 0.2%, to 1356.85. The index was hampered by weakness in recent gainers in the pharmaceutical, energy and transportation sectors.
Dow Jones Industrial Average
dipped 37.51, or 0.4%, to 10,689.67, unable to overcome the 6% drop in AT&T. Weakness in
Procter & Gamble
from doing its strongman routine (lifting the index all by its lonesome) once again.
Not that Big Blue didn't try. Coming off its blockbuster 13% rise
yesterday, IBM gained a further 2.7% to an all-time high of 199 3/4 today.
"The best thing to take away
from this week is,
is a company-specific" problem, said Bryan Piskorowski, market analyst at
. "We got a strong quarter from IBM and a strong
quarter. We're coming into a seasonally slow quarter, but I think investors will start discounting the second half and corporate spending outside the U.S. is poised for expansion."
Nonetheless, "tech has gotten ahead of itself," Piskorowski said. "A lot of Internet stocks report next week and are priced for perfection. If they don't report strong it'll be 'sell the news.' Don't get me wrong, it was a strong week, but what's our encore? It's a tough act to follow."
New York Stock Exchange
trading, 744.9 million shares were exchanged while gainers led losers 1,521 to 1,399. In
Nasdaq Stock Market
activity 1.06 billion shares were exchanged -- its 14th-straight billion-plus session -- while gainers led 2,209 to 1,811. New 52-week highs led new lows 57 to 18 on the Big Board and by 69 to 51 in over-the-counter trading.
Good, but Not Great
Given this week's gains by major proxies and the improvement in market internals, you'd think Greg Nie, chief technical analyst at
in Chicago, would be downright effusive over the market's recent performance. But Nie, who correctly forecast the most recent upturn when last interviewed by
April 7, is less than ebullient.
"The momentum has been decent this week
but we had good market action, not great market action," he said. "I'm not poo-pooing this rally, it's a good move. I honestly thought breadth and volume would have to be stronger than they have been to carry the market up. So far, it's worked."
Regarding breadth, there's been a "short-term improvement within a bearish overall look
but not a breakthrough move, in my opinion," Nie said. Consistent 2-to-1 or even 3-to-1 outperformance by advancers is necessary to reverse the "intermediate-term bearish" trend in breadth.
Volume, while improved, "would be challenging records consistently" if money managers heretofore cautious on the market were indeed capitulating and "jumping in," as some have suggested, he said.
Given the lack of overwhelmingly bullish market internals, the technician foresees "enough momentum left to push
the Dow over 11,000" and perhaps as high as 11,200 next week, "before we get into more of an overbought condition. I've got strong conviction in the saw-toothed pattern where rallies are followed by heavy doses of profit-taking."
With excuses such as the "nonconfirmation" of the
Dow Jones Transportation Average
, the "preponderance" of bullish sentiment, and the "warning flag" of the
at the ready, he predicted "once the short-term bullish scenario plays out into overbought, the onset of a dose of profit-taking capable of taking us back down to 10,000" could emerge.
The Dow transports today fell 20.24, or 0.6%, to 3589.68 and the Dow utilities slid 1.17, or 0.4%, to 301.27.
For the week, the Dow industrials rose 195.89, or 1.9%; the S&P 500 gained 38.02, or 2.9%; the Nasdaq Comp climbed 108.25, or 4.4%; the Russell 2000 added 10.30, or 2.4%; TheStreet.com Internet index climbed 11.05, or 1.7%; the Dow transports added 60.98, or 1.7%; the Dow utilities gained 5.12, or 1.7%; and the Amex Composite rose 24.95, or 3.3%.
The price of the 30-year Treasury bond rose 3/32 to 94 31/32, its yield at 5.60%.
Elsewhere in North American equities today, the
Toronto Stock Exchange 300
rose 11.48 to 7028.49 and the
Mexican Stock Exchange IPC Index
added 6.11 to 5481.78. For the week, the TSE 300 gained 15.26, or 0.2%, and the IPC fell 74.66, or 1.3%.
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.
As noted above, MediaOne jumped 7 7/8, or 11.3%, to an all-time high of 77 3/8 after AT&T late yesterday made an unsolicited bid for the company valued at more than $62 billion, including debt, topping Comcast's friendly $54 billion offer made last month. AT&T sliced off 3 3/8, or 6%, to 53 3/8; Comcast lowered 3/16 to 65 13/16. The deal lent cable stocks something of a helping hand:
rung up 5 7/8, or 8.2%, to 78 and
rung in 1 1/4 to 73.
Elsewhere in the sector,
climbed 10 5/8, or 23.7%, to an all-time high of 55 1/2 after late yesterday
said it will buy the company's cable systems for $1.4 billion. The systems serve about 260,000 customers in Virginia, according to Cox, which added 1 1/4 to 73 3/4.
, which provides software for personalized online marketing, shot up 15 13/16, or 112.9%, to 29 13/16 after
BancBoston Robertson Stephens
priced its 3.65 million-share IPO at $14 a share.
Elsewhere among first offerings,
rose 6 5/16, or 28.7%, to 28 3/8 after last night
Hambrecht & Quist
priced its 3.4 million-share IPO above range at $22 a share. The Santa Monica, Calif.-based company runs a music Web site. Meanwhile,
, a direct marketer of fee-based products and services, rose 2 3/8, or 19.8%, to 14 3/8 after
priced its 5 million-share IPO bottom-range at $12 a share. And
, an oil storage company, lost 1 9/16, or 7.8%, to 18 3/8 after
priced its 7.6 million-share IPO midrange at $20 a share.
Mergers, acquisitions and joint ventures
Chock Full o' Nuts
soared 3 15/128, or 48.9%, to 9 63/128 after last night announcing that it rejected a $10.50-a-share buyout offer from
, calling the proposal inadequate. Sara Lee slipped 1/2 to 23 1/2.
scooped up 1/4, or 10.5%, to 2 11/16 after
Inside Wall Street column quoted sources dismissing worries that
takeover of Prism might be in trouble. Ardent Software fell 1 1/8, or 5.9%, to 20 1/4.
Earnings/revenue reports and previews
American Power Conversion
expanded 5 1/16, or 17.3%, to 34 5/16 after late yesterday reporting first-quarter earnings of 36 cents a share, 4 cents better than the three-analyst estimate and up from the year-ago 28 cents. The company also backed the second-quarter estimate of 41 cents and the full-year estimate of $1.85. Today,
added the stock to its recommended list, raising it from market performer.
skid 1, or 9.8%, to 9 3/8 even after last night reporting first-quarter earnings of 14 cents a share, in line with estimates.
declined 1 5/16, or 13.3%, to 8 5/8 after last night posting a third-quarter loss of 42 cents a share, deeper than the expected loss of 35 cents.
picked up 1 3/4, or 6.7%, to 28 after last night recording a first-quarter loss 13 cents narrower than expected.
knocked off 4 3/16, or 23.1%, to 14 after last night recording first-quarter earnings of a dime a share, below the outlook for 24 cents.
hopped up 3 15/16, or 6.5%, to 64 3/8 after last night reporting first-quarter earnings 2 cents a share above estimates.
grew 5 7/8, or 6.9%, to 91 after meeting fourth-quarter earnings forecasts for 65 cents a share.
excelled 1 7/8, or 7.2%, to 28 1/8 after last night beating first-quarter earnings estimates by 3 cents a share.
advanced 2 3/4, or 6.3%, to 46 3/4 after last night topping third-quarter earnings estimates by 2 cents a share.
swelled 2 1/2, or 13.9%, to 20 1/2 after last night posting second-quarter earnings 2 cents a share higher than expected.
tacked on 7 5/16, or 21%, to an all-time high of 42 1/8 after last night reporting a first-quarter profit of $1.15 a share, blowing away the forecast for 75 cents.
flew up 2 1/8, or 6.2%, to 36 7/16 after last night posting a first-quarter loss a dime per share narrower than expected. Today, BancBoston Robertson Stephens upgraded the stock to strong buy from buy.
gave up 1 27/32, or 24.4%, to an all-time low of 5 3/4 after late yesterday warning it foresees "significant downward pressure" on its second-quarter results, for which it is currently expected to earn 20 cents a share. The company also posted first-quarter earnings of 17 cents a share, up from break-even results a year ago and in line with the eight-analyst estimate. Today,
dropped the stock to intermediate neutral from buy.
added on 1 3/4, or 6.1%, to 30 1/4 after last night beating first-quarter earnings estimates by 4 cents a share.
dropped 3 7/8, or 14.4%, to 23 1/8 even after last night posting a first-quarter loss 2 cents narrower than expected.
Transaction Systems Architects
skidded 6, or 16.3%, to 31 even after last night besting the second-quarter earnings forecasts for 33 cents a share by a penny.
shot up 16 3/4, or 32.2%, to 69 1/8 after last night posting a first-quarter loss of 27 cents a share, narrower than the expected loss of 34 cents.
lowered 1 5/8, or 13.2%, to 10 11/16 after last night missing first-quarter earnings forecasts for 19 cents a share by 1 cent.
In other earnings news:
Offerings and stock actions
swelled 7 9/16, or 7.8%, to 104 1/16 after setting a 2-for-1 stock split.
lifted 6 3/8, or 12.5%, to 57 1/4 after
Donaldson Lufkin & Jenrette
raised the stock to buy from market perform.
slipped 1 13/16 to 135 3/8
cut it to buy from strong buy.
, meanwhile, lifted its price target for AXP to 158 from 143 a share.
lost 3/16 to 66 9/16 after CIBC Oppenheimer lowered it to hold from buy.
Iridium World Communications
deflated 1 1/16, or 6.3%, to 16 after
Credit Suisse First Boston
dropped it to hold from buy. Late yesterday, the company's CEO resigned due to disagreements with the board over strategy.
shed 11/16 to 36 1/4 after DLJ downgraded the stock to market perform from top pick.
rallied up 11 9/16, or 15.1%, to 88 on news of a prematurely released Goldman Sachs report, which initiated coverage of the stock by placing it on the firm's recommended list. Amazon.com, which grew 19 3/4, or 10.4%, to an all-time high of 209 1/8, and
, which grew 27 5/16, or 15.8%, to an all-time high of 200 1/8, also were mentioned in the report, which was scheduled to go out after today's close or Monday.
advanced 15/16, or 7.8%, to 13 after Merrill Lynch lifted the stock to near-term accumulate from neutral.
plunged 15 5/16, or 10.5%, to 131 1/16 after
Morgan Stanley Dean Witter
analyst Mary Meeker lowered the stock to neutral from outperform based on valuation. Last night, the company posted a first-quarter loss of 8 cents a share, 2 cents narrower than expected.
lowered 4 7/8, or 9.2%, to 48 3/8 after Prudential downgraded it to accumulate from strong buy. Late yesterday, the semiconductor maker beat fourth-quarter earnings predictions for 25 cents a share by a penny.
soured down 4 1/8, or 25.8%, to an annual low of 11 7/8 after
Giant Food Stores
unit said it won't renew its supply contract with Richfood when it expires Dec. 31. Giant is Richfood's largest wholesale customer and buys about $600 million of dry grocery products from Richfood annually. Ahold fell 3/4 to 37 1/2.