New Dow Sputters on Day One as Nasdaq Creeps to Record

There was nothing much special about the new-fangled Dow after last week's run-up, and the Nasdaq's challenge of 3000 failed.
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SAN FRANCISCO -- Following last week's robust gains, capped by

Friday's record-setting advance for the

Nasdaq Composite Index

, it was probably too much to expect further gains today. That proved to be the case today for blue-chip averages, but the Nasdaq Comp squeezed out another new high despite losing steam midday amid reports of another big earthquake in Taiwan.

The tech-conspired index closed up 1.21 to 2967.64 after trading as high as 2997.90. The news from Taiwan caused a shudder as investors recalled how a big quake in September was a factor in disappointing third-quarter profits from companies such as

Dell

(DELL) - Get Report

and

Intel

(INTC) - Get Report

.

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Message Boards.

The earthquake is a "wild card," but as far as it being a big problem for chipmakers, that's "not what the stocks are telling us," said Robert Harrington, co-head of block trading

PaineWebber

. He noted the performance of

Micron

(MU) - Get Report

, up 1.7%, and

Analog Devices

(ADI) - Get Report

, higher by 5.6%. However, the

Philadelphia Exchange Semiconductor Index

dipped 0.1% to 555.52 after trading as high as 566.58.

Although much of the press attention centered on newly minted

Dow

components Intel, down 1.8%, and

Microsoft

(MSFT) - Get Report

, off 0.2%, fellow tech bellwethers

Sun Microsystems

(SUNW) - Get Report

,

Cisco

(CSCO) - Get Report

and

MCI WorldCom

(WCOM)

also restrained the Comp. The

Nasdaq 100

dipped 0.8%.

Although the biggest tech bellwethers were subdued, the tech proxy got a boost from secondary plays such as

Wit Capital

(WITC)

, up 27.4% on

news it will buy

SoundView Technology

for $320 million in stock.

Additionally, Internet favorites were generally higher, sending

TheStreet.com Internet Sector

index up 11.06, or 1.5%, to 761.85.

TheStreet.com

Red Hots index rose 3.15, or 1.3%, to 242.15. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.

The

Dow Jones Industrial Average

closed at its intraday low, down 81.35, or 0.8%, to 10,648.51 after trading as high as 10,745.77.

American Express

(AXP) - Get Report

and

General Electric

(GE) - Get Report

were the biggest negative influences on the Dow, while

Procter & Gamble

(PG) - Get Report

was its biggest booster.

American Express fell 3.3% amid reports questioning the quality of its earnings, while financials in general retreated from last week's stellar gains. The

Philadelphia Stock Exchange/KBW Bank Index

fell 1.2%.

The

S&P 500

, meanwhile, dipped 8.81, or 0.7%, to 1354.12 thanks largely to weakness in financials, transports, and select big-cap tech names. The other sector in the news was gold stocks, down as the price of the metal fell 2.9% to $291.70 an ounce. The

Philadelphia Stock Exchange Gold & Silver Index

shed 3.7%.

The bond market's performance in the wake of the

National Association of Purchasing Management

report helped pressure blue-chip proxies. The price of the 30-year Treasury bond fell 11/32 to 99 7/32, its yield rising to 6.18%. However, that was off its worst levels of the session, reached on word that the NAPM report's prices-paid index rose to 69.4, its highest level since May 1995.

Gains in the inventory component of the NAPM report -- to its highest level since November 1988 -- suggest "a lot of the strength is Y2K-related and could be temporary," Harrington said. "The market acts pretty good today. It's one of those in-between days, the market is kind of resting, digesting some pretty big gains."

While financials declined, it was a modest retreat "given the moves they've had," he said, forecasting the BKX could hit 1000 by springtime. The Philly bank index closed today at 873.51.

"You had some upside gaps there so it's natural to get some pullback," he said, noting the "re-entry" point for most names is probably 5% to 7% down from last week's heights. For example,

Chase Manhattan

(CMB)

, down 4.2% on

reports its trading revenues were overstated, "is probably a buy on the pullback."

All in all, today was a day of "stock-specific" trading, he said, citing

Tyco International

(TYC)

, down a further 10.8% on "continued skepticism about its accounting practices," as an example.

Lilliputian Uprising

Small-caps, meanwhile, continued their recent gains: The

Russell 2000

rose 3.18, or 0.7%, to 431.82 and the

American Stock Exchange Composite Index

added 4.17, or 0.5%, to 804.97.

"Remember, today is the first day of

many mutual funds' new

fiscal year and maybe some of the small-cap fans are loading up on their favorite stocks," said Peter Coolidge, managing director of trading at

Brean Murray Foster Securities

. "I think it's as simple as that. Some folks are taking a second look. It's something that doesn't surprise me, only that it's taken so long to happen."

Despite the group's recent gains and today's outperformance, Coolidge said it's too early to call a "turnaround" in small-caps.

"There's definitely a lot of focus on small-caps but this is a market of momentum and small-caps don't have it yet," the trader said. "I'm still skeptical until I see more of a trend line."

In

New York Stock Exchange

trading, 861 million shares were exchanged while advancers edged by declining stocks 1,537 to 1,523. In

Nasdaq Stock Market

action 1.07 billion shares traded while losers led 2,095 to 1,901. New 52-week lows outpaced new highs 86 to 70 on the Big Board while new high led 189 to 97 in over-the-counter trading.

Among other indices, the

Dow Jones Transportation Average

fell 82.48, or 2.7%, to 2976.50 and the

Dow Jones Utility Average

lost 1.41, or 0.5%, to 305.20.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

rose 15.08 to 7271.3 while the

Mexican Stock Exchange IPC Index

rose 29.42 to 5479.79.

Monday's Company Report

By Eileen Kinsella
Staff Reporter

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.

)

As an earthquake in Taiwan rattled semiconductor stocks, a number of technology companies kept a firm grip on gains that followed a handful of joint venture and financing announcements, even as the tech-laden Nasdaq Composite Index, gave back all but a point of its earlier gains.

TradeOut.com

said it will receive $22 million in third-round financing from

eBay

(EBAY) - Get Report

,

Benchmark Capital

and

Morgan Stanley Dean Witter

(MWD)

. The deal calls for eBay CEO Meg Whitman and Benchmark venture capitalists Bill Gurley and David Beirne to sit on TradeOut.com's board. Shares of eBay rose 1 15/16 to 137 while Morgan inched up 5/16 to 110 5/8.

America Online

(AOL)

jumped 4 13/16 to 134 1/8 after it announced a two-year online marketing pact with

Toysrus.com

, a unit of

Toys R Us

(TOY)

which rose 7/8, or 6.2%, to 15.

Rival online retailer

eToys

(ETYS)

, which also has an agreement with AOL, wasn't exactly smiling about the news, falling 4 5/8 to 55 1/16.

Lastly, America Online and eBay announced four new co-branded sites on several AOL sites.

Mergers, acquisitions and joint ventures

Adaptec

(ADPT) - Get Report

gained 1 7/8 to 46 13/16 after saying it plans to acquire privately held

Distributed Processing Technology

for $235 million in a deal that will strengthen Adaptec's efforts to provide backup hardware and software for computer storage systems. The purchase price includes the cost of assuming Distributed Processing's stock option plan.

Germany's

Allianz

said it would assume a goodwill charge of $2.4 billion to $2.5 billion for the $3.3 billion majority interest it has taken in

Pimco Advisors

(PA)

. Shares of Pimco gained 2 11/16, or 7.8%, to 37 3/8. Allianz board member Helmut Perlet said at a news conference that the charge in 2000 would total roughly $120 million to $220 million in the following year,

Reuters

reported. Allianz said earlier that it plans to have the goodwill completely written off over a 15-year period.

Separately, Allianz said it could boost its 70% interest in Pimco Advisors, while

Pacific Life Insurance

, in which Pimco shareholders have a 30% stake, would possibly lower its interest in the interim. Allianz also said that after closing the transaction, Pimco would be delisted.

AlliedSignal

(ALD)

gained 13/16 to 57 3/4 after it said it would purchase

Tristar Aerospace

(TSX)

in a transaction valued at roughly $291 million in cash and debt. TriStar tacked on 2 9/16, or 38.7%, to 9 3/16. The deal calls for AlliedSignal to buy Tristar for $49.50 a share and take on $107 million of its debt.

AT&T

(T) - Get Report

rose 9/16 to 47 5/16, while

priceline.com

(PCLN)

lost 1 15/16 to 58 1/2 after the companies announced plans for a promotion agreement that would involve offering Priceline's online travel pricing option on AT&T's

Worldnet Internet

service.

According to the deal's terms, AT&T will take part in Priceline's "sponsor dollars" marketing campaign. Every time a Priceline customer registers for certain AT&T services while proposing a price for airline tickets or hotel rooms, up to $75 in sponsor dollars can be tacked on to the customer's offering price. The sponsor dollars would help increase the probability that the customer's offer would be accepted by the airline or hotel. The companies said they anticipate gaining tens of thousands of new customers for each other's businesses.

Separately, AT&T announced plans to form a new public company,

AT&T Latin America

, that will merge the operations of

Netstream

, the local exchange company AT&T is buying in Brazil, and

FirstCom

, a publicly traded company with telecommunications operations in Chile, Colombia and Peru.

TheStreet.com/nytimes.com

joint newsroom examined the deal in a

story today.

Citigroup

(C) - Get Report

lost 7/8 to 53 3/8 after it announced plans to take a minority interest in Japan-based online broker

Nikko Beans

. Citigroup said the 19% interest enables both parties to sell to each other's customers in Japan.

Four Media

(FOUR)

climbed 4 11/16 , or 78.1%, to 10 3/4 after it announced plans to sell all of its stock to

Liberty Media

(LMG.A)

. The transaction calls for Liberty to exchange 6.35 million shares of Class-A Liberty Media Group stock at par value of $1.00 for 100% of Four Media's stock. According to Four Media, one Liberty Media share will be issued for 3.1 shares of Four Media. Liberty lost 1 3/16 to 38 1/2.

King World Productions

(KWP)

rose 5/16 to 39 1/16 after it said it pushed back today's shareholder meeting to vote on its merger with

CBS

(CBS) - Get Report

until Nov. 15. It is the fifth postponement since CBS and

Viacom

(VIA) - Get Report

unveiled their merger plans. According to King World, the delay was necessary to allot enough time to revise and circulate a supplement to its proxy statement that contains information on the CBS-Viacom deal. The vote on the CBS-King World merger was initially set for Sept. 1, the same day CBS announced its planned union with Viacom. CBS lost 1/4 to 48 9/16 while Viacom was unchanged at 45 9/16.

Timber

(TGP) - Get Report

inched up 1/16 to 23 15/16 after it announced plans to sell its California timberlands to

Hawthorne Timber LLC

, in a deal for roughly $397 million.

Visio

(VSIO)

slipped 15/16 to 38 3/4 after it said the

Justice Department

requested additional information on the proposed acquisition of Visio by

Microsoft

(MSFT) - Get Report

. Shares of Microsoft fell 3/16 to 92 3/8.

Online investment bank Wit Capital jumped 4 13/16, or 27.4%, to 22 3/8 after saying its buying

SoundView Technology

, a private investment banking concern based in Connecticut, for about $320 million in stock.

TheStreet.com/nytimes.com

joint newsroom took a look at the deal in a

story today.

Earnings/revenue reports and previews

Air Express International

(AEIC)

rose 2 5/8, or 9.9%, to 29 3/8 after it posted third-quarter earnings of 38 cents a share, missing the 12-analyst estimate of 40 cents and in line with year-ago 38 cents.

Avado Brands

(AVDO)

fell 1/8 to 5 3/8 after it reported third-quarter earnings of 10 cents a share, shy of the six-analyst estimate of 18 cents and down from the year-ago 58 cents.

Expectations of flat results internationally in the fourth quarter drove down shares of

Baker Hughes

(BHI)

which lost 1 3/16 to 26 3/4. Management indicated its fourth-quarter earnings would be roughly in line with its third-quarter results of 3 cents per share. Analysts polled by

First Call/Thomson Financial

expected Baker to earn 7 cents in the fourth quarter.

The 3 cents Baker reported for its third quarter was a penny better than analysts' reduced expectations, but down sharply from 20 cents in the year-ago period. Third-quarter revenue of $1.2 billion was down 24% from the $1.6 billion in revenue Baker reported in the year-ago period. Including a one-time credit, net income was $13.1 million, or 4 cents per share.

Chase Manhattan dropped 3 11/16 to 83 9/16 after it said that its fourth-quarter trade revenues would be slashed by $60 million before taxes after trading profit results from previous periods has had to be revised. Chase said that although the funds were not misused and customer accounts were not effected, one employee was fired.

TheStreet.com/nytimes.com

joint newsroom covered the

Chase Manhattan story this afternoon.

Express Scripts

(ESRX)

jumped 6 1/16, or 12.4%, to 55 after it said it expects strong growth in 1999 and 2000 based on its operating results and business strategy.

Hospitality Properties

(HPT)

climbed 1/4 to 21 3/8 after it reported third-quarter funds from operations of 91 cents a share, in line with the eight-analyst estimate but down from year-ago 94 cents a share.

Mercury General

(MCY) - Get Report

fell 1 to 27 3/16 after it posted third-quarter earnings of 59 cents a share, missing the six-analyst estimate of 69 cents and down from the year-ago 73 cents.

Nextlink

(NXLK)

fell 1 3/4 to 58 1/16 after it reported a third-quarter loss of $1.27 a share, 2 cents narrower than the 15-analyst estimate but wider than a year-ago loss of 79 cents.

Nova

(NIS)

gained 1/2 to 26 1/2 after it posted third-quarter earnings of 33 cents a share, in line with the 8-analyst estimate and up from the year-ago 22 cents.

Orbotech

(ORBK) - Get Report

lifted 4 1/4, or 5.4%, to 82 3/8 after it posted third-quarter earnings of 97 cents a share, beating the five-analyst estimate of 88 cents and up from the year-ago 75 cents

Offerings and stock actions

Mead

(MEA)

lost 3/8 to 35 5/8 after it set a 10 million-share buyback.

Neuberger Berman's

(NEU) - Get Report

fell 11/16 to 28 5/16 after its board approved a $50 million stock buyback plan. Neuberger Berman went public last month.

Primedia

(PRM)

climbed 15/16, or 8.4%, to 12 1/8 after it announced that chairman and CEO Tom Rogers purchased 181,818 common shares of the company for $11 a share.

Track Data

(TRAC)

tacked on 3 7/16, or 36.4%, to 12 7/8 after it set a 2-for-1 stock split.

UAL

(UAL) - Get Report

, parent of

United Airlines

, fell 3 1/4 to 64 13/16 after its board authorized a $300 million-share buyback plan.

WorldGate

(WGAT)

added 7/8 to 22 1/2 after it said it was canceling its secondary offering. WorldGate plans to withdraw its registration statement, saying that it doesn't believe that an offering at this time is in the best interest of shareholders.

Analyst actions

Morgan Stanley sliced its rating on

Allmerica Financial

(AFC) - Get Report

to neutral from outperform. Shares of Allmerica lost 2 1/4 to 54 15/16.

Merrill Lynch

initiated coverage of

Calico Commerce

(CLIC)

with an intermediate-term accumulate rating and a price target of 72. Calico Commerce fell 4 3/4, or 7.7%, to 57 1/2.

Donaldson Lufkin & Jenrette

upped its rating on

Cardinal Health

(CAH) - Get Report

to top pick from buy. Cardinal Health rose 13/16 to 44 5/16.

Merrill sliced its intermediate and long-term ratings on

Frontier Insurance Group

(FTR) - Get Report

to neutral from accumulate. Frontier Insurance sank 4 1/8, or 46.5%, to 4 3/4.

DLJ slashed its rating on

Hartford Life

(HLI) - Get Report

to market perform from buy. Hartford Life shares fell 2 3/8 to 50 1/4.

Merrill reinstated coverage of

LSI Logic

(LSI) - Get Report

with an intermediate-term accumulate rating and a long-term buy rating. LSI Logic inched up 15/16 to 54 1/8.

Merrill named

News Corp.

(NWS) - Get Report

a Focus One selection and upped its 12-month price objective to 45 from 40. Shares of News Corp added 5/8 to 30 1/4.

Goldman Sachs

initiated coverage of

PlanetRx

(PLRX)

as a market outperformer. Goldman was lead underwriter of the company's Oct. 7 IPO. Shares of PlanetRx.com fell 2 15/16, or 12.5%, to 20 11/16.

Credit Suisse First Boston

initiated coverage on

PRI Automation

(PRIA)

with a buy rating and a price target of 45. PRI Automation climbed 1 1/2 to 41 5/8.

Morgan Stanley initiated coverage of

Province Healthcare

(PRHC)

and

Lifepoint

(LPNT)

with outperform ratings. Shares of Province Healthcare rose 1/8 to 16 3/16, while Lifepoint climbed 5/16 to 11 7/8

Morgan Stanley U.S. equity strategist Byron Wien said he boosted the stocks position in his U.S. equities portfolio by 5 points to 85%, while slicing the cash portion by 5 points to 15%. Wien noted his additions came from financials. Of those noted,

Bank of New York

(BK) - Get Report

fell 1 3/8 to 40 1/2,

American International Group

(AIG) - Get Report

fell 2 11/16 to 100 1/4,

Mellon Financial

(MEL)

slipped 5/16 to 36 5/8,

Fannie Mae

(FNM)

dropped 2 1/16 and

Chubb

(CB) - Get Report

climbed 9/16.

Banc of America Securities

sliced its rating on

Wells Fargo

(WFC) - Get Report

to market perform from buy. Wells Fargo fell 1 to 46 7/8/

Miscellany

Disney

(DIS) - Get Report

fell 13/16 to 25 11/16 after saying it reached a deal with the government of Hong Kong to construct a Disney theme park there, according to published reports.

DuPont Photomasks

(DPMI)

fell 2 11/16, or 5.4%, to 47 after it said David Gino has resigned as executive vice president-finance and CFO.

Nearly two years after

Merrill Lynch's

(MER)

acquisition of

Mercury Asset Management

of Britain, the get-together isn't working out as gracefully as expected, the Heard on the Street column in

The Wall Street Journal

reported. Merrill inched up 1/2 to 79.

Motorola

(MOT)

jumped 4 15/16, or 5.1%, to 102 1/4 after it unveiled its DSP56690 baseband processor, which can handle all major existing wireless standards as well as satellite-based products.

Nextera Enterprises

(NXRA)

fell 3/16 to 4 15/16 after it named board member Stephen Fink as CEO. The company also said it expected third-quarter revenues and earnings to be within the range of expectations. The current four-analyst estimate calls for earnings of 6 cents a share.

RealNetworks'

(RNWK) - Get Report

fell 1 7/8 to 107 13/16 after

The New York Times

, citing a security expert, reported that RealJukebox software secretly monitors the listening habits and other activities of people who use it,. RealNetworks contends the practice does not violate consumer privacy because the info isn't stored by RealNetworks or distributed to other companies, the newspaper reported.