Out like a lion. Stocks began the final stretch of 1998 in rousing fashion today, with all major indices rising sharply, a bevy of high-profile stocks establishing new 52-week highs and the
Nasdaq Composite Index
setting new records.
Technology stocks again seized the mantle of leadership, with big names rising in concert and Internet names continuing to confound and amaze their skeptics. But it was not solely a tech story today as nearly every major sector -- save drug makers, energy concerns and mining companies -- participated in the rally.
The Nasdaq climbed as high as 2143.81 before closing up 51.88, or 2.5%, at a new all-time high of 2138.02. The close supplants the previous high of 2086.14, set
Friday, and marks the fifth new high for the Nasdaq since Thanksgiving. The point gain is the 10th-highest in the history of the tech-charmed index.
The S&P 500 set a new standard for the first time since
Nov. 27, rising 14.81, or 1.3%, to 1202.84 after hitting 1210.75 intraday. The small-cap
rose 4.41, or 1.1%, to 401.83 but remains well below its all-time high of 491.41 (not to mention its Dec. 31, 1997, close of 437.02).
Dow Jones Industrial Average
reached 9079.22 intraday and was as high as 9065.32 with less than 30 minutes to go in trading before fading toward the close. The blue-chip proxy closed up 85.22, or 1%, to 8988.85 and remains 4% below its all-time best of 9374.27, set
Technology titans such as
each set new all-time highs. Along with other Nasdaq-traded names, similar accomplishments were enjoyed by
New York Stock Exchange
-traded tech giants such as
Other tech stalwarts were higher in concert, leading the
up 3%, the
Morgan Stanley High-Tech 35
higher by 3.8% and the
Philadelphia Stock Exchange Semiconductor Index
As impressive as gains were for traditional tech bellwethers, they paled in comparison to those produced by Internet names. With
putting on staggering gains to new all-time highs,
TheStreet.com Internet Sector
index rose 42.26, or 11.2%. to an all-time high of 419.97.
The group's rise was partly inspired by bullish comments in
from Mary Meeker,
Morgan Stanley Dean Witter's
highly respected Internet analyst, as well as separate marketing deals announced today between America Online and
and Yahoo! Onsale, for example, surged 55.9% on news its Internet auctions will link to Yahoo!'s small-business Web site.
As mentioned above, tech stocks weren't alone on the upside today.
gave the Nasdaq a jolt, soaring 13.8% on news it defeated
Johnson & Johnson
in a court battle over the rights to a new anemia drug. Johnson & Johnson fell 3.1% and was by far the biggest negative influence on the Dow.
Drug makers lagged as a whole, but other consumer-focused names sectors posted strong gains. Giants such as
each rose to new 52-week highs. Financial names also performed well today, but most leaders in the industry remain well below all-time high levels.
'They're Going Down Swinging'
"A lot of this is end-of-the-year stuff, especially with hedge funds," said one West Coast trader, who asked not to be identified. "Guys up for the year are selling now to lock in profits. On the flip side, people who are buying are down below the curve and are trading twice as much as they would have to make up any loss before year-end. If they're going down, they're going down swinging."
"My day was very busy," said the trader, noting one of his clients is among the biggest biotech funds in the country. "We were buying actively. Obviously Amgen on that positive news as well as various other stocks in the sector. I didn't even realize the
Dow was up 85, to tell the truth."
Market internals, however, did not reflect the impressive gains enjoyed by proxies.
In NYSE trading, 750.5 million shares were exchanged while advancing issues bested declining stocks 1,717 to 1,334. In
Nasdaq Stock Market
activity, 964.9 million shares were exchanged while losers led 2,170 to 2,018. New 52-week highs beat new lows 127 to 59 on the Big Board and by 164 to 109 in over-the-counter trading.
Many market players were powerless to explain the upswing, other than to site "seasonal" factors.
Institutions often invest whatever cash they are holding at the end of December in anticipation of a coming influx of liquidity in January. Additionally, some traders said the cessation (for now) of hostilities in the Middle East and the completed impeachment vote against
relieve the market of some uncertainties, although additional unknowables arise from the latter.
"I do think it's seasonal," said Courtney Smith, chief investment officer at
, downplaying developments in Iraq and Washington. "You've got a market being driven higher by moderate buying in a illiquid market. It's a normal seasonal pattern."
Also, "there is no bad news in a bull market. All news get interpreted as bullish," Smith noted somewhat sardonically. "'We have low earnings?' That's OK, the
will ease, so it's bullish. 'Oh, the economy is improving?' That means earnings will go up, so it's bullish. That's the reality."
Still, the strategist remains bullish on the prospects for stocks in 1999, due mainly to the positive influence of supply/demand factors and Fed policy. Smith foresees the Fed being "more aggressive
next year than people think right now," although -- like most -- he believes the central bank will leave interest rates unchanged at its meeting tomorrow.
Among other indices, the
Dow Jones Transportation Average
rose 16.48, or 0.6%, to 3025.52; the
Dow Jones Utility Average
gained 1.07, or 0.3%, to 314.36; and the
American Stock Exchange Composite Index
rose 2.87, or 0.4%, to 654.12.
Bonds struggled as stocks soared. The price of the 30-year Treasury bond fell 1 2/32 to 102 28/32, its yield rising to 5.06%.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
rose 27.68 to 6381.00 and the
Mexican Stock Exchange IPC Index
jumped 68.33, or 1.8%, 3909.57.
Monday'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, many of the big-cap tech names that clocked in all-time highs Friday did it again today. Hitting their tops were the following: Cisco, rising 4 1/8 to 94 11/16; Microsoft, rising 2 5/8 to 140 7/16; MCI WorldCom, rising 1 3/8 to 70 11/16; Sun Microsystems, rising 4 1/8, or 5%, to 86 7/8; IBM, rising 4 13/16 to 176 3/8; and Compaq, rising 1 9/16 to 44 1/4. In the news,
American Interactive Media
scored 15/16, or 27.8%, to 4 1/2 on word it will provide a line of Internet access services to its subscribers through an agreement with MCI WorldCom's Internet service provider unit.
Experience proved to be no obstacle for the youngest members of the tech group, the Internet stocks. AOL brought in 12 3/4, or 12.2%, to an all-time high of 117 after forming a multiyear marketing pact with Dell, calling for AOL to be featured on Dell computers sold in the U.S. and Canada. Dell lifted 4 1/16, or 6%, to 71 15/16. Yahoo! shot up 35 3/16, or 16.6%, to an all-time high of 247 1/2 on its content deal with Onsale, which soared 24 3/8, or 55.9%, to 68. And Amazon.com got closer to that much-talked-about
price target of 400, hopping 32, or 11.2%, to an all-time high of 318 3/4.
Elsewhere in the Internet,
jumped 2 1/4, or 16.5%, to 15 7/8 after saying late Friday it would buy back 800,000 shares, or 28% of its stock.
expanded 5 1/8, or 19.3%, to 32 after
BancBoston Robertson Stephens
reiterated its buy, calling the stock an overlooked Internet play.
rose 40 1/8, or 33.2%, to an all-time high of 164 23/32;
rose 44 1/8, or 17.5%, to an all-time high of 296 3/8;
rose 31 3/4, or 59.9%, to an all-time high of 84 1/8; and
rose 5 3/8, or 12.5%, to 48 1/2.
hypothesized in an early-morning
column that fundamentals are to thank (blame?) for putting air under Webbed wings.
As mentioned earlier, Amgen grew 12 3/16, or 13.8%, to an all-time high of 100 5/16 on news it beat out Johnson & Johnson for the sole rights to NESP, a key anemia drug. Amgen was upgraded this morning by (take a deep breath):
, Morgan Stanley Dean Witter,
Credit Suisse First Boston
Deutsche Bank Securities
, among others. J&J slipped 2 5/8 to 76 7/8.
Mergers, acquisitions and joint ventures
took in 2, or 20.3%, to 12 after agreeing to buy
government-services unit for $67 million. MDM closed unchanged at 5.
, a maker of specialty chemicals for the electronics industry, leapt 6 7/8, or 25.6%, to an all-time high of 33 11/16 after
Rohm & Haas
agreed to buy it for $460 million. Rohm & Haas added 1 to 29 5/8.
brought in 1 7/16 to 60 5/16 after announcing it bought some wireless handset development assets from
for an undisclosed sum. Lucent shot up 5 1/2, or 5.6%, to 103 7/8.
climbed 11/16 to 17 5/8 after forming a joint venture with Venezuela's
Cisneros Television Group
to offer TV channels outside the U.S. and Canada under the Playboy banner.
advanced 3 5/16, or 32.7%, to 13 1/2 after announcing a deal to have its products featured on the
Web site. The site, a competitor of
, is a joint venture of
, up 9/16 to 28 1/16, and
, up 11/16, or 6.9%, to 10 11/16.
looked at some accounting issues surrounding the pending
IPO in a
WellPoint Health Networks
jumped 2 3/8 to 83 3/4 after saying it remains committed to its proposed $500 million acquisition of
despite a recent class action ruling against Cerulean.
Earnings/revenue reports and previews
sliced off 1 11/16, or 16.5%, to an annual low of 8 9/16 after late Friday saying its first-quarter results will fall below the year-earlier 18 cents a share because of a recent drop in meat-production prices. The single-analyst estimate called for a repeat of the year-ago 18 cents.
sank 4 9/16, or 11.6%, to 35 1/2 after warning it expects fourth-quarter earnings to fall 7 cents to 12 cents a share short of the third quarter's 46 cents. The three-analyst estimate called for fourth-quarter earnings of 54 cents. The company blamed weak sales in its domestic sales organizations.
tumbled 1 11/32, or 25.8%, to 3 15/16 after warning it expects a restructuring program to increase fourth-quarter expenses but that it sees revenue growing significantly in the same period. The company said it expects to post a profit in 2000.
Offerings and stock actions
Central Garden & Pet
popped up 13/16, or 6.7%, to 13 1/16 after
late Friday increasing its stock buyback program to $55 million from $25 million.
excelled 3 13/16, or 19.7%, to 23 3/4 after Morgan Stanley Dean Witter upped it to outperform from neutral.
vaulted 3 5/16, or 22.8%, to 17 7/8 after BancBoston Robertson Stephens initiated coverage with a buy.
jumped 8 7/8, or 8.8%, to an all-time high of 110 1/8 after Merrill Lynch raised it to accumulate from neutral.
flew 13/16, or 11%, to 8 3/16 after
Salomon Smith Barney
started coverage with a buy and a 12-month price target of 11.
picked up 3/16 to 26 15/16 after Salomon Smith Barney upgraded it to buy from outperform.
won 1 1/16, or 6.8%, to 17 after BancBoston Robertson Stephens lifted it to buy from attractive.
Suburban Propane Partners
excelled 1 1/16, or 6%, to 18 3/4 after Goldman Sachs upgraded it to buy from outperform.
sailed up 3 3/16, or 8%, to an all-time high of 42 15/16 before it was added to the S&P 500 after the closing bell. The stock replaced
, which slouched 7 13/16 to 201 1/2, after
completed its acquisition of the reinsurance company. Elsewhere in index news,
expanded 3 1/8, or 5.7%, to 57 3/4 in its first day of trading on the Nasdaq 100 Index.
Cross Timbers Oil
lost 11/16, or 9.6%, to an annual low of 6 1/2 after saying it plans to boost its
Hugoton Royalty Trust's
offering to 15 million units of beneficial interest and that it will use the net proceeds to cut bank debt. The company also said it will no longer have systematic trust distributions to shareholders in 2000.
stumbled 3 5/16, or 11%, to 26 3/4 after the
Federal Trade Commission
voted to file suit against the company on antitrust charges, seeking $120 million in consumer refunds for what the federal agency said were overpriced drugs.
gave up 5, or 8.4%, to 54 3/4 even after saying the results of a Phase II trial of its inhaling solution for patients with a form of severe chronic bronchitis were encouraging.