A harsh chill descended on Wall Street proper today, but it was warm and sunny in the ethereal realm of trading. A lack of blockbuster volume was the lone blight on an advance in which just about everything worked and major averages climbed impressively higher.
Traders pinned hopes on a belief that
will not say anything to disturb the U.S. economy or the stock market (is there a difference?) during his
testimony tomorrow and Wednesday.
Bond traders took a similar view; the price of the 30-year Treasury bond rose 14/32 to 98 15/32, sending its yield down to 5.35% and providing a solid backdrop for the advancing stocks.
Dow Jones Industrial Average
soared as high as 9558.28 before closing up 212.73, or 2.3%, to 9552.68. The close is the Dow's third-highest ever and marks its first above 9400 since
Jan. 12, suggesting to technical analysts the index has broken out of its five-week trading range. The next major hurdle for the index (besides sustaining today's advance) is its all-time high of 9643.32, reached
Jan. 8 .
"They've got the wind at their backs. You're a stone's throw away
from a new high with the Dow Jones divisor the way it is," said Jim Volk, co-head of institutional trading at
in Portland, Ore. "Today proves there's still a lot of money on the sidelines. But in the same breath, they run for the exits the minute things get spooked. I think this is sustainable to a new high, but I don't think it's going to 10,000 in a straight line."
All but two of the Dow's 30 components ended with gains (
being the laggards), with advancers paced by tech components
was also a big gainer, leading a robust performance in financial stocks.
was another financial standout, rising 6.5% to a new all-time high of 81. The
Philadelphia Stock Exchange/KBW Bank Index
rose 3.1% while the
American Stock Exchange Broker/Dealer Index
rose 3.4% on news Germany's
is in talks to buy the film giant's office imaging business.
was the other Dow member involved in a merger, acquiring
for $4.3 billion. Sundstrand surged 17.7% on the news while United Technologies, once as low as 120 1/2, climbed as high as 127 before finishing up 0.9% at a new 52-week high of 126 9/16.
The merger activity, plus speculation Greenspan "wants to keep things on an even keel" encouraged traders, Volk said. "We're back in this low inflation, moderate growth scenario that caused the market to set new highs the last time around. Cyclical stocks are proving people are not concerned about the economy." The
Morgan Stanley Cyclical Index
rose 33, or 2.7%, to 1272.22, putting it within spitting distance of its all-time high of 1279.64. Small cap stocks also enjoyed an upturn; the
rose 5.52, or 1.4%, to 397.82.
'You need a couple of great days to keep it going,' said Everen's Greg Nie. 'Volume needs to be higher and sustainability could be an issue later in the week. Applaud the effort, but am I on board and taking an aggressive stance? Not yet.'
For all the talk about losing their leadership standing, technology stocks were at the epicenter of the advance.
Nasdaq Composite Index
struggled early but surged thereafter, closing at its apex, up 58.41, or 2.6%, to 2342.01. The smothered-in-tech index was paced by familiar bellwethers such as
Even more impressive were
New York Stock Exchange
-traded tech giants such as
Advanced Micro Devices
Morgan Stanley High Tech 35
climbed 4.5% and the
Philadelphia Stock Exchange Semiconductor Index
Internet names also stuck to the script.
TheStreet.com Internet Sector
index climbed 19.78, or 4.2%, to 490.38, led by
as well as Net heavyweights
TheStreet.com E-Commerce Index
climbed 3.29, or 3.5%, to 97.89, paced by
, which gained 21.1%.
Dow Jones Transportation Average
climbed to 97.06, or 3.1%, to 3231.57, led by
, which gained 4.6% on news expenses incurred during talks with its pilots union were less than expected. Additionally,
Delta Air Lines
gained 5.3% after being upgraded by
Donaldson Lufkin & Jenrette
. Airlines were strong overall amid speculation of more industry consolidation; the
American Stock Exchange Airline Index
In NYSE trading, a relatively modest 718.5 million shares traded while advancers bested declining stocks by a healthy 1,965 to 1,030. In
Nasdaq Stock Market
activity, 849.3 million shares were exchanged while gainers led 2,153 to 1,850. Giving pause to the celebrants, new 52-week lows led new highs 66 to 45 on the Big Board and by 88 to 38 in over-the-counter trading.
Judge Not, Lest Ye Be Judged
"It was welcome and much needed in terms of intermediate-term timing but I would reserve judgment as to whether it's the real thing," said Greg Nie, chief technical analyst at
in Chicago. "It's a good day, not a great day."
Higher volume and a 2-to-1 or 3-to-1 victory by advancers is necessary before the trend can be considered outright bullish, Nie said. Moreover, "you need a couple of great days to keep it going," he said. "There some plausibility some investors are holding back in deference to Greenspan which leaves room to have a couple of great days. But volume needs to be higher and sustainability could be an issue later in the week. Applaud the effort, but am I on board and taking an aggressive stance? Not yet."
Nie agreed the close above 9400 was a key technical victory for the Dow industrials but said 1280 is the level to watch on the S&P 500, not 1250 as proffered by other technicians.
"It's still a question of how, not where," he added. "It's a question of momentum. I'm more interested in breadth and volume as to whether the risk level is diminishing and bulls have the upper hand."
Among other indices, the
Dow Jones Utility Average
rose 3.17, or 1.1%, to 298.75 and the
American Stock Exchange Composite Index
gained 7.46, or 1.1%, to 700.03.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
leapt 95.01, or 1.5%, to 6504.55 and the
Mexican Stock Exchange IPC Index
jumped 43.06, or 1%, to 4243.18.
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.
Gateway hopped 6 7/16, or 8.8%, to 79 5/16 after
Ashok Kumar upgraded the stock to strong buy from buy and raised its price target to 95 to 100 from 56 a share. The analyst also upped his first-quarter earnings estimate to 90 cents a share from 59 cents and his 1999 forecast to $3.87 from $2.82. In a report, Kumar said the aggressive expansion of Gateway's Country Stores, which focus on consumers and small to medium-sized businesses, will help the PC maker offset a seasonal slowdown. Late Friday, Gateway said it selected Advanced Micro Devices as its second supplier of chips. AMD lifted 1 11/16, or 9.6%, to 19 5/16 while
, Gateway's top supplier, took in 4 3/4 to 132 13/16.
Mergers, acquisitions and joint ventures
grew 1 3/4, or 7.1%, to 26 9/16 after announcing it's acquiring
, an online software retailer, for about $134 million. Beyond.com expects to complete the transaction by the end of March.
rose 4 1/4, or 6.1%, to 74 1/4 after its
Comverse Network Systems
business announced a contract with the U.K.'s
for systems to support the deployment of the company's "Every Phone" service. Orange added 6 1/4, or 8.7%, to 78 1/8.
sliced off 2 1/4, or 5.3%, to 40 after agreeing to buy
Consolidated Natural Gas
for $6.3 billion in stock. Consolidated Natural Gas lowered 1 1/16 to 55 3/16.
picked up 1/8 to 21 5/8 after
agreed to acquire the company for $1.8 billion in cash and stock. The deal calls for Sempra to assume $4.2 billion in KN Energy debt. Sempra dropped 3/4 to 21 9/16.
fell 1 5/8, or 9.3%, to 15 7/8 despite word that
Pharmacia & Upjohn
will develop and market two cancer products under a licensing agreement. NeoPharm will receive an initial payment of more than $15 million, as well as milestone payments exceeding $50 million during the clinical development. Pharmacia & Upjohn added 3/4 to 54.
soared 11 11/16, or 69.3%, to an all-time high of 28 9/16 after Sweden's
agreed to acquire the company for $384 million in a deal that will create the world's largest full-service security company.
kicked up 1/4 to 5 3/4 after announcing it will create
, a joint venture with
Dawntreader Fund I
, to market the company's brands on the Web. Data Broadcasting lost 5/16 to 13 15/16.
Ritchie Bros. Auctioneers
jumped 4 1/8, or 15.4%, to an all-time high of 31 after announcing it will acquire the auction business of privately held
. Terms of the deal weren't disclosed.
climbed 1 3/4, or 6.6%, to an all-time high of 28 3/8 after saying it received an unsolicited $32-a-share acquisition offer from
. Southern Union lifted 1 13/16, or 10.1%, to 19 3/4.
rose 3 3/8 to an all-time high of 109 13/16 after hiring four investment banks to fend off a nearly $60 billion hostile bid by
. The firms are
Credit Suisse First Boston
report on the deal today.
Earnings/revenue reports and previews
vaulted 5 1/4, or 7.4%, to an all-time high of 76 1/16 even after posting a fourth-quarter loss of 47 cents a share, excluding gains, wider than both the eight-analyst forecast for a loss of 15 cents and the year-ago loss of 21 cents. Perhaps investors were paying attention to the cable company's operating cash flow, which shot up 15% during the quarter.
sank 3 13/16, or 19.7%, to an annual low of 15 1/2 after warning it sees third-quarter earnings of 14 cents to 17 cents a share due to weaker-than-expected demand and continuing industry-wide pressures on pricing and margins. The four-analyst outlook called for 30 cents.
surged 1 15/16, or 10.3%, to 20 11/16 even after recording fourth-quarter earnings of 20 cents a share, 2 cents below the 23-analyst view and behind the year-ago 26 cents. Investors seemed to be focusing more on upgrades of the company to buy from market perform from
BT Alex. Brown
and to buy from hold from
NationsBanc Montgomery Securities
missed fourth-quarter earnings estimates by 3 cents a share with a profit of 4 cents. But the heath care information systems company also agreed to merge with closely held
in a deal valued at $53 million, sending OCIS up 1 1/8, or 36%, to 4 1/4.
Sun Microsystems took in 7 15/16, or 8.2%, to 104 5/16 after saying at the
BancBoston Robertson Stephens technology conference in San Francisco that revenue growth in its fiscal second half of 1999 will outpace 16% growth in the first half.
In other earnings news:
Offerings and stock actions
rose 4 1/8 to 90 after announcing a 2-for-1 stock split.
jumped 2, or 13.3%, to 17 after
started coverage with a buy. And
added 9/16, or 7.6%, to 7 15/16 after the firm began coverage with a strong buy.
hopped 3 3/16, or 10.1%, to 34 11/16 after SoundView started coverage with a buy.
added 1/12, or 5%, to 31 9/16 after the firm started coverage with a strong buy.
popped up 9 7/16, or 13.3%, to 80 9/16 after
BancBoston Robertson Stephens
lifted the stock to buy from attractive with a price target of 90 a share.
Warburg Dillon Read
initiated coverage with a strong buy.
Abercrombie & Fitch
flourished 8 11/16, or 12.2%, to an all-time high of 79 3/4 following blowout fourth-quarter earnings last week and on recent analyst comments about the company's potential to grow.
flew 2 15/16, or 5.7%, to 54 1/4 after saying it will slash 200 jobs, or 20% of its international commercial-banking workforce, primarily in London.
brought in 4 11/16, or 9.9%, to 52 3/16 after the
Food and Drug Administration
granted the company approval to ship
, which is used to treat osteoarthritis of the knee, from its new 55,000-square-foot manufacturing plant in Ridgefield, N.J.
E*Trade, the focus of today's Heard on the Street column in
The Wall Street Journal
, shot up 8 7/16, or 21.1%, to 48 9/16 after launching an online mutual fund. Elsewhere in online news, AOL grew 12 5/8, or 7.9%, to 173 on news its
unit is expected to unveil a major makeover of its online offerings.
jumped 6 9/16, or 10.1%, to an all-time high of 71 3/8 after the
said it and
are close to a deal that would end a long-running patent dispute and could aid in resolving a looming international trade conflict over the future of wireless communications. Ericsson rose 1 5/16 to 27 15/16.
advanced 1 to 28 3/4 after
reported that CEO Dana Mead hopes to sell the company's auto unit for around $4 billion and concentrate on making Tenneco a specialty-packaging titan.
excelled 1 11/16, or 5.1%, to 34 13/16 after its
unit unveiled the