Nasdaq Wraps Up Remarkable Week Near a Record

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

AT&T's

(T) - Get Report

unsolicited $62 billion bid

last night to acquire

MediaOne

(UMG)

. The offer topped by 17% the value of an existing merger agreement between MediaOne and

Comcast

(CMCSK)

. In an earlier

story,

TheStreet.com

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.

The

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

Cisco

(CSCO) - Get Report

,

Oracle

(ORCL) - Get Report

and

Dell

(DELL) - Get Report

; the

Nasdaq 100

gained 1.2%.

But the index got a bigger lift from fallen angel

3Com

(COMS)

, 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

Ericsson

(ERICY)

from Michael Murphy, fund manager and publisher of

California Technology Stock Letter

. Additionally,

Lehman Brothers

reported possible interest in 3Com by

Siemens

,

Alcatel

(ALA)

and/or

Nokia

(NOK) - Get Report

.

"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

Amazon.com

(AMZN) - Get Report

jumped 10.4%, helping

TheStreet.com Internet Sector

gain 20.76, or 3.2%, to 680.07.

In addition, the

Russell 2000

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

S&P 500

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.

Meanwhile, the

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

J.P. Morgan

(JPM) - Get Report

,

Chevron

(CHV)

and

Procter & Gamble

(PG) - Get Report

also prevented

IBM

(IBM) - Get Report

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,

Compaq's

(CPQ)

is a company-specific" problem, said Bryan Piskorowski, market analyst at

Prudential Securities

. "We got a strong quarter from IBM and a strong

Gateway

(GTW)

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."

In

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

Everen Securities

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

TSC

,

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

Dow Jones

Utility Average

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

By Heather Moore
Staff Reporter

(

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:

Cablevision

(CVC)

rung up 5 7/8, or 8.2%, to 78 and

Time Warner

(TWX)

rung in 1 1/4 to 73.

Elsewhere in the sector,

Media General

(MEGA)

climbed 10 5/8, or 23.7%, to an all-time high of 55 1/2 after late yesterday

Cox Communications

(COX)

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.

Net Perceptions

(NETP)

, 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,

Launch Media

(LAUN)

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,

CompuCredit

(CCRT)

, a direct marketer of fee-based products and services, rose 2 3/8, or 19.8%, to 14 3/8 after

PaineWebber

priced its 5 million-share IPO bottom-range at $12 a share. And

Statia Terminals

(STNV)

, an oil storage company, lost 1 9/16, or 7.8%, to 18 3/8 after

Bear Stearns

priced its 7.6 million-share IPO midrange at $20 a share.

Mergers, acquisitions and joint ventures

Chock Full o' Nuts

(CHF)

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

Sara Lee

(SLE)

, calling the proposal inadequate. Sara Lee slipped 1/2 to 23 1/2.

Prism Solutions

(PRZM)

scooped up 1/4, or 10.5%, to 2 11/16 after

Business Week's

Inside Wall Street column quoted sources dismissing worries that

Ardent Software's

(ARDT)

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

(APCC)

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,

Goldman Sachs

added the stock to its recommended list, raising it from market performer.

Aris

(ARSC)

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.

Auspex Systems

(ASPX)

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.

Autoweb.com

(AWEB)

picked up 1 3/4, or 6.7%, to 28 after last night recording a first-quarter loss 13 cents narrower than expected.

Avid Technology

(AVID) - Get Report

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.

BroadVision

(BVSN) - Get Report

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.

Catalina Marketing

(POS)

grew 5 7/8, or 6.9%, to 91 after meeting fourth-quarter earnings forecasts for 65 cents a share.

Cheesecake Factory

(CAKE) - Get Report

excelled 1 7/8, or 7.2%, to 28 1/8 after last night beating first-quarter earnings estimates by 3 cents a share.

Emulex

(EMLX)

advanced 2 3/4, or 6.3%, to 46 3/4 after last night topping third-quarter earnings estimates by 2 cents a share.

IDG Books

(IDGB)

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.

K-Swiss

(KSWS)

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.

Lam Research

(LRCX) - Get Report

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.

Maxtor

(MXTR)

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,

Merrill Lynch

dropped the stock to intermediate neutral from buy.

Ocular Sciences

(OCLR) - Get Report

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.

Onyx Software

(ONXS)

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

(TSAI)

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.

uBid

(UBID)

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.

Varco

(VRC)

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

E*Trade

(EGRP)

swelled 7 9/16, or 7.8%, to 104 1/16 after setting a 2-for-1 stock split.

Analyst actions

Adolph Coors

(RKY)

lifted 6 3/8, or 12.5%, to 57 1/4 after

Donaldson Lufkin & Jenrette

raised the stock to buy from market perform.

American Express

slipped 1 13/16 to 135 3/8

(AXP) - Get Report

after

CIBC Oppenheimer

cut it to buy from strong buy.

Prudential Securities

, meanwhile, lifted its price target for AXP to 158 from 143 a share.

Delta

(DAL) - Get Report

lost 3/16 to 66 9/16 after CIBC Oppenheimer lowered it to hold from buy.

Iridium World Communications

(IRID)

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.

PepsiCo

(PEP) - Get Report

shed 11/16 to 36 1/4 after DLJ downgraded the stock to market perform from top pick.

priceline.com

(PCLN)

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

eBay

(EBAY) - Get Report

, 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.

Quorum Health

(QHGI)

advanced 15/16, or 7.8%, to 13 after Merrill Lynch lifted the stock to near-term accumulate from neutral.

VeriSign

(VRSN) - Get Report

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.

Xilinx

(XLNX) - Get Report

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.

Miscellany

Richfood Holdings

(RFH)

soured down 4 1/8, or 25.8%, to an annual low of 11 7/8 after

Ahold's

(AHO)

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.