Pretty Full but Still Ravenous, Traders Scarf Up Stocks

The Nasdaq exploded to a record and the Dow topped 11,000 again, sharpening the question of how much rallying is too much.
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Sure, the market's overbought. Yeah, it's not hard to find any number of analysts to tell you the market's overvalued. And indeed, many would say stocks are due for a pullback considering the heights they have soared to lately.

No matter, though. After a brief one-day pause

yesterday, traders and investors pushed up stocks again as optimism ballooned on Wall Street, sending the

Nasdaq Composite Index

, the

S&P 500

and Internet Sector

index to close at all-time highs, while the

Dow Jones Industrial Average

closed above 11,000 for the first time since Sept. 13.

Thanks to a beefy surge in shares of



, the Dow hopped 152.61, or 1.4%, to 11,035.70. H-P flew 13 5/16, or 16.4%, to 94 5/16, and accounted for a 84.10 points of the Dow's advance. Enthusiasm over H-P's earnings and the solid debut of

Agilent Technologies

(A) - Get Report

, an H-P spin off, boosted the stock and helped energize the tech sector in general.

joint newsroom took a look at H-P's earnings in a

story yesterday and on Agilent's trading debut


Hewlett-Packard: Join the discussion on


Message Boards.

Agilent: Join the discussion on


Message Boards.

Also helping the rally was a positive bias related to tomorrow's expiration of some index and stock options, according to some analysts. Volume was heavy on both the

Nasdaq Stock Market

and on the Big Board. But not helping stocks was another down session for the Treasury market. The 30-year Treasury bond tumbled 14/32 to 99 14/32, yielding 6.17%.

The S&P 500 rose 14.23, or 1%, to 1424.94. The S&P 500 hit an all-time intraday high at 1425.31.

The Nasdaq Comp soared 77.72, or 2.4%, to 3347.11, its first-ever close above 3300. Internet, hardware and semiconductor stocks all aided in the Comp's run. Internet Sector

index soared 53.46, or 5.9%, to 955.83.

America Online





are both within striking distance of hitting their all-time closing highs. Additionally,

Red Hots index rose 6.34, or 2.07%, to 311.94. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money. E-Finance Index

, which has been enjoying a torrid November, hopped 5%.


Russell 2000

gained 4.97, or 1.1%, to 462.04. It was the 16th session out of 17 in which the small-cap gauge has risen.

Peter Coolidge, managing director of trading at

Brean Murray Foster Securities

, said the market is in a "euphoric stage." He said the market goes up on any sort of good news and doesn't go down that much on bad news. But the market does sort of have to take a breather, the trader said.

Meanwhile, the

Dow Jones Transportation Average

, which traded down through most of the session, rallied to close higher on the day as oil tumbled. The transportation average rose 14.03, or 0.5%, to 3018.16.

The drop in December crude oil futures contract helped take a toll on the oil service sector in the wake of their recent surge. The Philadelphia Stock Exchange Oil Service Index dropped 3.2%. The December crude-oil futures contract fell 80 cents to close at $25.80 on the

New York Mercantile Exchange


With the market stretched on the upside, a good number on Wall Street are looking for a pullback.

Short-term, the market has reached overbought conditions that have to be relieved by consolidation, said Paul Cherney, market analyst at

S&P MarketScope


Cherney said there's "going to be a day of reckoning after tomorrow," when traders look at the condition of the bond market and as hedged positions that were put on for expiration are unwound, which will exert some negative pressure on the market early next week.

Generally, when bond yields are rising, stocks have a tough time gaining, the analyst noted. Right now equity traders are overlooking the rise in yields, but eventually there's going to have to be some balance between rising yields and rising stocks, he said.

Intermediate-term, the analyst is positive, however, pointing to the fact that the November-to-January period produces the best positive returns based on the S&P 500.

"We're in a pretty powerful part of the year," Cherney said.


New York Stock Exchange

trading, 1.023 billion shares were exchanged while declining stocks beat advancers 1,525 to 1,507. On the

Nasdaq Stock Market

, 1.577 billion shares changed hands -- the second-highest Nasdaq volume ever, after yesterday's -- while winners beat losers 2,330 to 1,737. New 52-week lows beat new highs 143 to 89 on the Big Board, while new highs beat new lows 239 to 70 in over-the-counter trading.

Among other indices, the

Dow Jones Utility Average

gave up 2.19, or 0.7%, to 294.05, while the

American Stock Exchange Composite Index

slipped 0.66, or 0.1%, to 822.74.

Caspian Pipeline Deal Inked

President Clinton

, no stranger to maneuvering legalese for his own benefit, looked on today as the leaders of Turkey, Azerbaijan and Georgia signed a historic oil pipeline agreement that allows oil companies from the U.S. and elsewhere access to oil and gas emanating from the Caspian region without having to traverse the troublesome territories of Russia or Iran.

The 1,080 mile-long pipeline is expected to cost $2.4 billion and would run through Azerbaijan to Turkey, linking the Caspian region to key international markets. The pipeline helps U.S. companies become more competitive in the region, without violating the Iran-Libya Sanctions Act. It should also help diversify worldwide-consumer dependence on Russia, through where all Caspian oil and gas is now shipped, and on Middle East suppliers.

"These pipelines will be an insurance policy for the entire world by helping to ensure our energy resource pass through multiple routes instead of a single chokepoint," Clinton said.

Russia had competed for a pipeline that would link Russia with Azerbaijan. For its part, Iran had wanted an oil swap agreement with Azerbaijan, saving Teheran transport costs.

Despite the questions about the deal's feasibility, today's signing is considered a policy victory for Clinton, who is in Istanbul for the summit of the

Organization for Security and Cooperation in Europe



Heather Bourbeau

Elsewhere in North American equities, the

Toronto Stock Exchange 300

gained 60.35 to 7651.60 and the

Mexican Stock Exchange IPC Index

added 92.52 to 6196.14.

Thursday's Company Report

By Tara Murphy
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.


Mergers, acquisitions and joint ventures



lost 1 3/4 to 58 7/8 after it said it will buy a one-third stake in

Heiwa Life Insurance

of Japan for $20 million in the first step of a buyout it hopes to complete next year.


(BAX) - Get Report

fell 3/4 to 66 7/8 after it said it will buy

North American Vaccine


in a stock deal valued at $390 million. Shares of North American Vaccine added 3/8, or 6.4%, to 6 3/16.



bounced 1 3/16, or 11%, to 12 after it said it will sell its drug delivery business to

Johnson & Johnson's

(JNJ) - Get Report

Ortho-McNeil Pharmaceutical unit for up to $75 million in cash, depending on certain conditions. Shares of Johnson & Johnson slid 1 1/4 to 104 3/8.


(BA) - Get Report

hopped 11/16 to 43 1/4 after it said it has won at least 30 orders worth more than $2 billion for its new line of Delta IV satellite-launch rockets,

The Wall Street Journal

reported, citing sources familiar with the development. The story said

Loral Space & Communications

(LOR) - Get Report

placed a significant order.

British American Tobacco

(BTI) - Get Report

skidded 5/16 to 11 3/16 after it said it will sell its

Shoppers Drug Mart

unit to leverage buy-out firm

Kohlberg Kravis Roberts

for $1.8 billion in cash. The deal is subject to BAT completing its acquisition of Canadian conglomerate



Cable & Wireless


jumped 3/16 to 59 1/8 after it said it formed a global relationship with



to provide small and medium-sized companies with e-business solutions. The two companies planned to commit $500 million to the venture over a period of five years. Shares of Compaq moved up 1 1/4, or 5.2%, to 25.



jumped 4 1/4, or 9.7%, to 48 after it said it has set plans to enter the options market by buying options-trading firm

Arbitrade Holdings

for $459 million in stock.'s

Options Buzz had the scoop back on Tuesday.

Major subsidiaries of




, and

Washington Post


announced a venture to share news reports on their Web sites. NBC is a unit of

General Electric

(GE) - Get Report

, while


is a joint venture between NBC and


(MSFT) - Get Report

. Shares of General Electric slipped 1 13/16 to 139 3/8, while Microsoft declined 1/8 to 84 15/16.



edged up 3/16 to 31 9/16 after it said it will receive a $300 million naval support contract in Guam.

Russ Berrie


leaped 5 1/16, or 25.3%, to 25 after it said venture capital company

Evercore Partners

has offered to buy it for $27 a share in cash. Under terms of the nonbinding proposal, Evercore would acquire all outstanding common shares of Russ, other than those owned by CEO Russ Berrie.

Earnings/revenue reports and previews

Computer giant



soared 13 1/2, or 16.6%, to 94 1/2 after it posted fourth-quarter earnings last night of 75 cents a share, beating the 16-analyst estimate of 73 cents and the year-ago 72 cents. Earnings rose to $760 million from $710 million, while revenue from continuing operations totaled $11.4 billion compared with $10.3 billion last year.


increased its rating on Hewlett-Packard to attractive from neutral.

For more on H-P, check out additional

coverage from the

joint newsroom.

Applied Materials

(AMAT) - Get Report

lost 3 1/16 to 107 despite reporting fourth-quarter income from continuing operations last night of 69 cents a share, beating the 28-analyst estimate of 65 cents and the year-ago operating loss of 45 cents a share.

Credit Suisse First Boston


Lehman Brothers


Warburg Dillon Read

raised 2000 earnings estimates on Applied Materials. See additional

reporting on Applied Materials from's

joint newsroom.

Barnes & Noble

(BKS) - Get Report

slipped 15/16 to 21 1/4 after it posted third-quarter earnings of 5 cents a share, in line with the 10-analyst estimate and up from a year-ago loss of 7 cents a share. joint newsroom reported on the company's earnings in a

story earlier today.


(KMB) - Get Report

fell 1 5/8 to 66 5/8 despite saying it would meet fourth-quarter estimates and would continue to add to its healthcare-related business through acquisitions. The current 14-analyst estimate for the fourth quarter is 76 cents. Earlier today,


upped its price target to 83 from 73.


(MATW) - Get Report

inched up 3/8 to 25 1/4 after it posted fourth-quarter earnings of 39 cents a share, beating the two-analyst estimate of 38 cents and up from the year ago 34 cents.

TD Waterhouse


stumbled 9/16 to 18 13/16 after it reported fourth-quarter earnings of 8 cents a share excluding charges, beating the seven-analyst estimate of 6 cents a share, and the year-ago 4 cents a share.


(Z) - Get Report

rose 5/8, or 95, to 7 1/2 after it reported third-quarter earnings of 7 cents a share, in line with the seven-analyst estimate and better than the year-ago loss of 29 cents a share.


(W) - Get Report

gained 3/4 to 32 5/8 after it posted fourth-quarter operating earnings of 58 cents a share, beating the nine-analyst estimate of 41 cents and the year-ago 36 cents a share.

Offerings and stock actions

ABC Bancorp

(ABCB) - Get Report

added 1/4 to 13 1/2 after it said its board approved a 6-for-5 stock split.



jumped 1 5/16 to 44 13/16 after it declared a 2-for-1 stock split.

Home Depot

(HD) - Get Report

tacked on 2 1/16 to 82 after it set a 3-for-2 stock split.

Merrill Lynch priced 18 million ADSs of

i-Cable Communications


at $27 each. Each ADS is equivalent to 20 local shares.

IRT Property

(IRT) - Get Report

climbed 1/4 to 7 3/4 after it approved the buyback of up to $25 million of its common stock.

Maxim Integrated

(MXIM) - Get Report

jumped 4 3/4, or 5.8%, to 87 after it set a 2-for-1 stock split.

MCI Worldcom


added 2 7/8 to 91 7/16 after it set a 3-for-2 stock split.

Portugal Telecom

(PT) - Get Report

rose 3/4 to 46 3/4 after it set a 5-for-1 stock split.

Credit Suisse First Boston

priced 5.5 million shares of



at $15 each last night, above the estimated $12 to $14 range. Retek, a spinoff of

HNC Software


, makes software used by retailers to communicate online with suppliers and distributors.


wasted no time initiating coverage of the new issue, rating it a buy and setting a 12-month price target of 25. Shares of Retek soared 17 9/16, or 117%, to 32 9/16.

Analysts actions

Deutsche Bank Alex. Brown

said it expects rising fuel prices to limit positive earnings surprises for airlines in the fourth-quarter and possibly cause some companies to miss earnings estimates. However, Deutsche did not make changes to any ratings, saying 2000 estimates are still on track and ahead of forecasts, citing travel agent commission cuts, which should offset any more fuel price increases.


raised its price target for


(XON) - Get Report

to 87 from 80. Exxon shares added 3/4 to 81.

PaineWebber also upped its price target on


(KMB) - Get Report

to 83 from 73. Kimberly-Clark lost 1 5/8 to 66 5/8.

PaineWebber cut



price target to 78 from 85. Kodak shares shed 1/16 to 66 9/16.

Launch Media


soared 4 13/16, or 27.4%, to 22 1/2 after

Banc of America Securities

initiated coverage with a buy rating and a price target of 32.

Warburg raised its first-quarter 2000 earnings estimates on

Micron Technology

(MU) - Get Report

to $1 from 40 cents, and 2000 estimates to $3.39 from $2.13. Micron Technology bounced 5 9/16, or 8.7%, to 69 3/8.

Merrill set a 2001 earnings per share estimate of $4.20 for



. Merrill also said it sees a price objective of 140 to 150. Motorola hopped 4 13/16 to 123 13/16.

Morgan Stanley Dean Witter



(UIS) - Get Report

to outperform from neutral and set a price target of 37. Unisys leaped 5 7/16, or 22%, to 30 1/8.

Warburg Dillon Read


United Parcel Service

(UPS) - Get Report

with a buy rating and set a price target of 78. Morgan Stanley started the stock with an outperform rating.

Merrill Lynch

started UPS with an accumulate rating, while Donaldson Lufkin & Jenrette started it as a market perform. United Parcel Services lost 1 3/8 to 66 5/16.

Merrill Lynch raised its price target on

Wells Fargo

(WFC) - Get Report

to 58 from 53. Shares of Wells Fargo mounted 3/4 to 47 7/8.

First Boston raised its price target on


(XLNX) - Get Report

to 110 from 80. Xilinx shares bounced 6 3/8, or 7.4%, to 92 1/2.


A California judge declared a mistrial in a multibillion class action lawsuit against


(F) - Get Report

after the jury was unable to render a verdict. The legal proceedings stemmed from claims that Ford placed the ignition to close the engine, causing more than 300 different models of cars to experience stalling. Ford fell 1 7/8 to 50 3/4.

A federal jury affirmed the legitimacy of five



patents and said they were violated by

Newbridge Networks


products that are used to handle data transmission on the Internet. Lucent gained 3 3/8 to 80 3/8.

Marsh & McLennan

(MMC) - Get Report

slipped 1 1/4 to 78 1/2 after it named its president Jeffrey Greenberg to the position of CEO, succeeding A.J.C. Smith who will remain as chairman until he retires next May.

The Heard on the Street column in

The Wall Street Journal

looks at daytrading firm

Harbor Securities

, which ceased trading for two full weeks after a $600,000 loss by one trader sparked scrutiny by regulators. Regulators also focused on an additional $2.8 million in losses since June. The column discusses the risks associated with daytrading firms that pool their customers' funds.