It's a lesson Manhattanites have learned well from their horrible little real estate market. When it looks like asset prices can't possibly rise any further, and then they do just that -- start the bidding. It may sound crazy to the buy-the-dip crowd, but it makes a whole lot of sense from where the market's standing today, at the point where long-term investing meets the short-term momentum play.
The major indices were on another magic carpet ride at midsession, led by the
Nasdaq Composite Index
, lately above the 3000 mark and still probing deeper into record territory. Powered by increasingly big-cap technology issues, the Comp was up 39, or 1.3%, to 3007.
Nasdaq Hits 3000: Join the discussion on
Dow Jones Industrial Average
was up 87, or 0.8%, to 10,735, while the
was 12 higher to 1366. Strong breadth was helping the small-cap
advance 3 to 435.
TheStreet.com Internet Sector
index was exceptional on the downside, off 6 to 756.
The conventional wisdom was that stocks would need to breathe a bit after rallying so strongly and so broadly toward the end of last week. But investors impressed by the market's comeback and unwilling to get left behind were making that thesis look, well, rather conventional.
"Some people are worried that we're in a lockout phase," said Richard Dickson, technical analyst at
Scott & Stringfellow
in Richmond, Va. "The market screams higher and people say, 'I've got to wait for a pullback.' But in a market like this, waiting means paying higher prices. So I think people said, 'Why wait? Here we are, and we're buying it.'"
It's not like people are buying out of blind panic. Though frighteningly fierce, the market's run-up last week was markedly healthier than the sort of strength the indices have shown for some time now. "What you saw last week was a very important bottom," said Barry Hyman, senior market strategist at
Ehrenkrantz King Nussbaum
. "A bottom accompanied by good breadth, strong volume, renewed leadership by the growth stocks, and a very accommodative bond market."
Neither the day's economic data nor a morning
were having much effect on the bonds, which were shaving off a few more basis points in yield in an extension of last week's rally. The
released figures showing personal income unchanged in September. As has been the case for some time, spending outstripped income, growing 0.4% in September on the heels of a revised 0.8% clip in August.
The benchmark 30-year Treasury was up 18/32 to 99 24/32, its yield easing to 6.14%. (For more on the fixed-income market, see today's early
Meanwhile, the market continues to rotate. The possibility that those insatiable consumers aren't anywhere near ready to stop spending was helping send the
S&P Retail Index
was up 1.5%. The
Morgan Stanley Consumer Index
was up 0.5%.
Chip stocks were getting their wind back as the market seems to have decided that yesterday's 6.1 quake in Taiwan won't create any problems for the region's semiconductor industry. The
Philadelphia Stock Exchange Semiconductor Index
was up about 3.3%.
Financials were also looking strong, the Philadelphia Stock Exchange/KBW Bank Index up about 1.7%.
"This is not a one-sector market, as is witnessed by the breadth," Hyman said. "If it were the same old rally, with breadth 2-to-1 to the downside, I'd be suspicious. But that's not what's happening."
Breadth was indeed strong.
New York Stock Exchange:
1,828 advancers, 1,079 decliners, 522 million shares. 58 new 52-week highs, 56 new lows.
Nasdaq Stock Market:
2,056 advancers, 1,568 decliners, 706 million shares. 170 new highs, 65 new lows.
Tuesday's Midday Watchlist
Tech stocks were hopping as the Nasdaq broke through the key 3000 level. Among top movers helping fuel today's gains,
was flying 24 7/8, or 44.3%, to 81 1/8, while recently public
was hopping 14 1/2, or 25.5%, to 71 3/8.
Mergers, acquisitions and joint ventures
Barnes & Noble
rose 5/8 to 22 1/4 after it said it purchased a 49% interest in
Alaska Gov. Tony Knowles urged the
Federal Trade Commission
yesterday to block
proposed $26.8 billion takeover of
and said he suspended Alaska's talks over the deal with BP Amoco. Shares of BP Amoco fell 1 9/16 to 55 11/16, while Atlantic Richfield dropped 4 13/16, or 5.2%, to 87 3/8.
said it has obtained $100 million in fourth-round financing from
Martha Stewart Living Omnimedia
and others, which will contribute to the company's expansion into 20 new locations in 2000. Shares of Amazon slid 2 3/16 to 67, while Martha moved up 3/4 to 34 5/8. The online grocer said
Kleiner Perkins Caufield & Byers
Hummer Winblad Venture Partners
are among the other investors funding the project.
rose 11/16 to 31 13/16 and
was up 1/8 to 19 3/16 after the companies said they have forged a tech agreement to offer consulting, tech support and other services.
Separately, Perot posted third-quarter earnings of 14 cents a share, in line with the five-analyst estimate and up from a year-ago 9 cents a share.
U S West
jumped 1 5/16 to 62 11/16 after shareholders gave their stamp of approval to the company's planned $36 billion merger with
, lately rising 1/16 to 35. U S West said 93.7% of the votes favored the deal, which will be voted on by Qwest shareholders today.
Earnings/revenue reports and previews
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
lost 1, or 11.1%, to 8 1/8 after it posted first-quarter earnings of 17 cents a share before charges, missing the three-analyst estimate of 20 cents a share, and the year-ago 31 cents.
Fresh Del Monte
gained 3/4 to 42 1/4 posted third-quarter earnings of 21 cents a share, missing the five-analyst estimate of 25 cents and down from the year-ago 44 cents.
gained 1 1/16 to 26 1/16 after it posted a third-quarter loss of 59 cents a share, narrower than the six-analyst estimate of a 68-cent loss but wider than the year-ago 42-cent loss.
gained 1 15/16, or 15.6%, to 14 3/8 after it posted third-quarter earnings of 29 cents a share, beating the 16-analyst estimate of 15 cents and up from the year-ago 58-cent loss.
rose 1/2 to 31 7/8 after it reported fourth-quarter earnings of 36 cents a share, beating the 10-analyst estimate by a penny and up from the year-ago 31 cents.
lost 1/8 to 8 13/16 after it reported an unaudited net loss for the latest 13-week quarter of 6 cents a share. The seven-analyst estimate called for a loss of 26 cents a share. Since announcing preliminary second-quarter results in early October, Rite Aid has continued a review of its accounting, which was undertaken partly as a result of comments of the staff of the
. The company also continued to evaluate and make necessary adjustments for various matters identified as a result of that review.
rose 15/16, or 5.85%, to 17 3/16 after it reported third-quarter earnings of 13 cents a share, in line with the five-analyst estimate and up from the year-ago 5 cents a share.
reported fourth-quarter earnings of 40 cents a share, beating the single-analyst estimate of 36 cents and the year-ago 20 cents a share. The company said the latest quarter had compared with 13 weeks for the year-ago period.
Offerings and stock actions
Citibank Worldwide Securities Services
, a unit of
, launched an American depositary receipt program in connection with Italy's sale of shares in
, which is now one of the largest publicly traded electric utilities in Europe. The ADRs were priced at $45 each, and are equivalent to 10 ordinary shares. Lately the ADRs were at 45 3/16.
Kaufman & Broad
gained 1 1/16, or 5%, to 22 1/4 after it said it added 4 million shares to its buyback plan.
rose 9/16 to 14 1/8 after saying it plans to spin off
. Mattel said
and others will contribute $37.5 million in initial funds to the plan.
added 1/16 to 83 7/8 after it said its 30 million-share Class A offering was priced at Monday's closing of 83 13/16.
Morgan Stanley Dean Witter
Credit Suisse First Boston
Deutsche Bank Securities
served as underwriters for the deal.
popped up 13 15/16, or 34.9%, to 54 1/2 after it said Chairman and CEO Charles Johnson plans to acquire $1 million of the company's stock.
Goldman Sachs is expected to price a 25 million-share IPO for
at $11 to $13 a share tomorrow night.
U.S. Bancorp Piper Jaffray
raised its price target in
to 33 from 30. Shares of Air Express were bouncing 15/16 to 30 3/16.
Credit Suisse First Boston started coverage of
Expeditors International of Washington
as a strong buy, and
Circle Group International
as a hold. Expeditors International shares were slipping 1/16 to 38 1/8, while Circle Group was hopping 1 to 25 1/8.
Morgan Stanley Dean Witter started coverage of
with an outperform rating. Shares of Hertz were gaining 1/4 to 43 7/8.
Credit Suisse First Boston analyst Wendell Laidley started coverage of
with a buy rating and a price target of 105. Interwoven was jumping 3 1/8 to 84 7/8.
PaineWebber upped its earnings estimates for
first-quarter 2000 to 88 cents a share from 79 cents and for calendar year 2000 to $4.27 from $4.19. Micron Technology was popping 3 11/16 to 76 1/4.
Warburg Dillon Read
rolled out coverage of
with a buy rating and a price target of 21. Province Healthcare was adding 5/16 to 16 5/8.
Donaldson Lufkin & Jenrette
said it started coverage of
with a buy recommendation. SCI Systems shares were climbing 3 7/16, or 7%, to 52 1/2.
upped its price target on
to 125 from 85 and reiterated its market outperformer rating. STMicro was soaring 9 11/16, or 10.7%, to 99 1/2.
Warburg Dillon Read raised its price target on
to 70 from 69.
raised its intermediate rating on the stock to accumulate from neutral. Shares of Teva were mounting 1/16 to 49 3/8.
was sinking 2 1/4, or 5.5%, to 38 1/8 after it said it plans to pay the federal government $100 million to satisfy terms of a deal to cover its diagnostic manufacturing operations in Lake County, Ill.
was falling 9/16 to 75 5/8 on a
Wall Street Journal
report that it is expected to announce plans to discontinue its
brand, due to decreasing sales in recent years. According to the
, DaimlerChrysler could cut back on costs by axing Plymouth, without affecting its high-volume product lines.
was jumping 3 to 132 5/16 after it said Chairman and CEO Jack Welch plans to retire in April 2001. A company spokesman said that it has not named a replacement for Welch.
received a blow to its stock price after the
Food and Drug Administration
rejected its AIDS treatment
. Shares plummeted 17 7/16, or 27.6%, to 45 15/16 from yesterday's closing price of 63 3/16.
said it received FDA approval for its once-a-day form of AIDS treatment
. Prior to the approval, the drug needed to be taken twice a day. Bristol-Myers was sliding 15/16 to 76 5/16.