Same as it ever was -- only better. Similar to the way they stood
midday, stocks ended with blue-chips wary as bonds retreated but tech stocks undaunted. Despite decent point moves for major averages, however, the action was sparse as a lack of corporate news failed to extricate traders from the pre-
limbo that's likely to persist for the next week.
The price of the 30-year Treasury bond fell 19/32 to 89 13/32, its yield rising to 6.02%. However, fixed-income participants reacted more to supply issues than concern about economic growth or multiple
tightenings, traders said. Thus, growth-stock investors were able to brush aside bonds and continue their aggressive display of buying. Moreover, cyclicals, which usually benefit from forces that spook bonds, were among the session's biggest laggards, oil stocks most notably.
Strong throughout, the
Nasdaq Composite Index
rose 66.84, or 2.6%, to 2630.28 -- just 0.8% short of its April 26 all-time high, 2652.10.
TheStreet.com Internet Sector
index gained 30.04, or 5.3%, to 594.38.
In the absence of hardcore news, traditional tech bellwethers rose in an advance partially attributed to some (self-serving) comments from
. The PC "is going to be at the core of the computing world for years to come," Dell told the weekly.
Dell rose 6% while PC titans
gained more than 3% each, as did
, which set a 52-week high ahead of a 2-for-1 split. The
New York Stock Exchange
were all solid gainers. The
Morgan Stanley High-Tech 35
rose 2.7% while the
Philadelphia Stock Exchange Semiconductor Index
added 4.4% to an all-time high of 477.05.
Among Net leaders,
gained 10.1%, partially on speculation it may be added to the
jumped 10% on word it will be featured on a new version of IBM's Lotus Notes.
Thanks mainly to techs, the S&P 500 closed up 6.16, or 0.5%, to 1349.00 vs. a midday low of 1337.68. The
rose 4.39, or 1%, to 449.44.
Dow Jones Industrial Average
fell 39.58, or 0.4%, to 10,815.98 after trading as high as 10,880.25 and then falling as low as 10,755.83.
The Dow was undone by weakness in
, as well as oil giants
. As crude futures slid 32 cents to $17.67 a barrel, the
American Stock Exchange Oil & Gas Index
fell 2.1% and the
Philadelphia Stock Exchange Oil Service Index
"Nasdaq had a great day, transports were up big
but there was very light trading volume," said Anthony Conroy, head of stock trading at
. "I think we're stuck in a trading range until we get pretty clear-cut view -- not on a 25-basis-point cut -- but what
the Fed plans for the future."
Like many, Conroy thinks a 25-basis-point tightening, should it emerge, is a "positive because it means the economy is strong enough to raise rates but not so strong they'll raise 50." Ironically, no move next week would be most disturbing because it would engender worries about an economic slowdown, he said.
In NYSE trading, 682 million shares were traded while advancers edged declining stocks 1,585 to 1,398. In
Nasdaq Stock Market
activity, 907.7 million shares were exchanged while gainers led 2,170 to 1,750. New 52-week highs bested new lows 110 to 63 in Big Board action and by 124 to 39 in over-the-counter trading.
Kicking Fallen Tech Bears
The recent advance by tech leaders has tech bulls feeling pleased, and somewhat vindicated.
"Everybody has been so concerned about big-cap tech
being overvalued," said Erik Gustafson, portfolio manager at
Stein Roe & Farnham
. "Everyone was moving into cyclicals because the Fed was going to raise rates and compress multiples. There's been some sellers over the course of the last couple of months: They're wrong. Big-cap tech is the best place to be because they're going to have earnings going forward. We know business is outstanding at Cisco and
Gustafson, who manages the $829 million
Stein Roe Growth Stock fund (among others), said there was nothing fundamental behind today's spurt, merely the continuation of recent momentum and capitulation by naysayers.
"You could see it starting to build last week," he said. "
Wednesday you saw massive amounts of capital flow to classic tech stocks. Seeing it continue tells you some people were underweight these groups
and obviously some people were short and they had to cover. Those underweight continue to try to scramble to get merchandise in -- I love when that happens. All those yo-yos that jumped out two months ago are coming back strong."
Gustafson's strategy is to invest in "franchise tech companies" with "powerful and dominant market positions." Stein Roe Growth maintains core long positions in Cisco, Tellabs, EMC,
Owing to the "wonderful tone" of recent company conference calls and presentations, the fund manager remains quite enamored with the group. "This whole notion of a Y2K nuclear-winter spending shutoff has not materialized," he said. "The tone of business is outstanding, and they are all poised to meet and exceed expectations. Telco/tech is the place to be."
Judging by the past few trading days, it's hard to argue with that assessment.
Among other indices, the
Dow Jones Transportation Average
rose 31.88, or 0.9%, to 3428.22; the
Dow Jones Utility Average
slid 3.33, or 1%, to 327.77; and the
American Stock Exchange Composite Index
dipped 2.82, or 0.4%, to 765.75.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
dipped 9.98, or 0.1%, to 6995.08 and the
Mexican Stock Exchange IPC Index
jumped 107.06, or 1.9%, to 5823.71.
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, Lycos popped up 8 13/16, or 10%, to 96 5/8 after agreeing to provide its
Internet tools and content to IBM's
unit. IBM picked up 4 to an all-time high of 124 3/4.
Elsewhere among small deals (in Monday merger terms) between big companies,
jumped 5 11/16, or 16.3%, to 40 11/16 after striking a marketing arrangement with
to provide new investors with six months of free Internet access through a Yahoo!-branded version of Telephone's WorldNet online service. AT&T added 7/8 to 56 1/2; Yahoo! swelled 14 9/16, or 10.1%, to 158 7/8.
Still elsewhere, America Online rose 3 3/8 to 115 3/8 after saying it will invest $1.5 billion in
, which owns DirecTV, to form an alliance to offer high-speed Internet service via satellite. Hughes, a unit of
, grew 3 3/16, or 6%, to 56 5/8.
Separately, Hughes Network Systems, a subsidiary of Hughes Electronics, said it will use Intel's microprocessors in a new generation of TV-set-top receivers. Intel tacked on 1 13/16 to 56 13/16.
Mergers, acquisitions and joint ventures
slashed 2 15/16, or 5.9%, to 47 1/8 after announcing plans to buy
, an Irish software company, in a stock deal valued at $700 million. Saville lowered 9/16 to 15 1/8.
closed unchanged at 40 after rejecting a joint takeover proposal from
Air Products & Chemicals
(AIQUY:OTC BB ADR). Air Products & Chemicals gained 13/16 to 46 5/16.
Delta Air Lines
rose 2 13/16, or 5%, to 58 3/4, on expectations it will announce an international alliance with
tumbled 5 1/8, or 28.3%, to an annual low of 13 after announcing it jointly agreed with
to terminate their plans for a nearly $2 billion merger, which was announced Feb. 22. Sempra gave up 1 1/8 to 22 13/16. KN Energy also confessed it will lose 20 cents to 25 cents a share in the second quarter and that it will likely break even or post earnings of 10 cents a share for the full-year. A four-analyst estimate called for earnings of 16 cents in the second quarter and a nine-analyst estimate called for $1.07 for the year.
climbed 4 7/16, or 5.4%, to 87 7/8 after
The Sunday Times
of London reported the company is in talks with Yahoo! about a linkup that would give retail investors access to Reuters'
tacked on 3 3/4 to an all-time high of 136 1/2 after confirming plans to acquire Israel's
Libit Signal Processing
for $365 million in cash. (
Adam Lashinsky reported on the possible combination earlier
shot up 6, or 24.7%, to an all-time high of 30 1/4 after
Royal Bank of Scotland's
, agreed to buy the Boston company for about $1.4 billion. Citizens Financial said it will cut 800 positions due to the acquisition.
lowered UST to neutral from buy.
lost 2 5/8 to 67 1/8 after saying it's acquiring Canada's
in a stock swap worth $2.45 billion.
Earnings/revenue reports and previews
, a specialty packaging and tissue company, blew off 3, or 8.1%, to 34 after late Friday saying it expects second-quarter earnings to come in 10% to 20% below the six-analyst forecast for 51 cents a share. The company, which earned 49 cents in the year-ago period, blamed the expected shortfall on higher costs and a short-term margin squeeze at its North American packaging operations.
shaved off 1 5/16 to 67 5/8 after reporting second-quarter earnings of 41 cents a share, in line with the three-analyst outlook and above the year-ago 37 cents.
Construction equipment maker
soured 3/8 to 8 1/8 after late Friday saying it sees third-quarter earnings coming in around 12 cents to 15 cents a share. The seven-analyst outlook called for 50 cents vs. the year-ago 48 cents. The company said it sees quarter sales rising 15% to 17% above the year-ago sales of $119.7 million, which is below management's previous expectations. OmniQuip plans to take a third-quarter restructuring charge of about $2.2 million, or 9 cents a share. Finally, the company said it will cut about 200 jobs at its
Offerings and stock actions
Global TeleSystems Group
picked up 3 9/16 to an all-time high of 91 1/2 after setting a 2-for-1 stock split in the form of a stock dividend.
flourished 2 3/16, or 5.4%, to 42 9/16 after
initiated coverage with a near- and long-term buy.
expanded 11/16 to 18 11/16 after underwriters of the firm's May IPO initiated coverage of the stock.
started coverage with a market outperform while Merrill Lynch started coverage with a near-term accumulate and long-term buy rating.
Salomon Smith Barney
began coverage with buy ratings. Goldman and Merrill were lead underwriters on the IPO; Salomon Smith Barney and Wit Capital were co-managers.
excelled 2 11/16, or 9.4%, to 31 1/4 after Merrill Lynch began coverage with a near- and long-term accumulate.
Still elsewhere among today's broad Internet strength,
rocketed 3 1/16, or 27.8%, to 14 1/8 after PaineWebber started coverage with a buy and Salomon Smith Barney started coverage with a buy and a 12-month price target of 20.
rallied 8 1/4, or 20.9%, to 47 1/2 and
rallied 26 7/8, or 21.5%, to 152 1/8 on no specific news.
Chevron sloughed off 2 1/2 to 90 11/16 and Exxon sloughed off 2 1/8 to 78 1/4 after
slashed second-quarter earnings estimates for the companies to 70 cents from 80 cents a share and to 49 cents from 62 cents a share, respectively. The firm cited depressed refining and marketing margins.
vaulted 2 13/16, or 5.5%, to 53 13/16 after
Donaldson Lufkin & Jenrette
upped it to top pick from buy.
advanced 1, or 8%, to 13 7/16 after PaineWebber raised it to buy from neutral.
swelled 7, or 16.3%, to 50 after
started it with a buy and price target of 66 a share and Goldman initiated coverage with a market outperform.
chopped off 2 3/8, or 6.6%, to 33 11/16 after delaying its annual report filing and firing several executives for their involvement in accounting improprieties that contributed to the delay. The company fired Chairman Charles McCall and some officers from its
Information Technology Business
HBO & Co.
, and said CEO Mark Pulido and CFO Richard Hawkins resigned. The company named John Hammergren and David Mahoney as co-CEOs and Heidi Yodowitz acting CFO. Alan Seelenfreund was named nonexecutive chairman.
, a system software developer, shot up 4 3/8, or 37.6%, to an annual high of 16 1/16 after naming Albert E. Sisto president and CEO. Sisto succeeds Jack Kay, who will remain on the company's board. Phoenix also formed
, a new subsidiary in which
has signed a letter of intent to acquire a 20% stake. (Softbank is a minority investor in
, publisher of this Web site.)