All the major stock indices rose today, but only those least burdened by tech names came close to recouping
On a day when the best-performing sectors were telecom, utilities, drug companies and financials -- which got a lift from Dutch insurer
planned acquisition of
Dow Jones Industrial Average
and the broad
put their tech-heavy counterparts to shame. The Dow tacked on 103.16, or 1.1%, to 9298.63, while the S&P added 13.25, or 1.1%, to 1237.28.
But while the Dow took back everything it lost yesterday and then some and the S&P recovered all but 4.59 of its 17.84 lost points, the
Nasdaq Composite Index
gained only 11.64, or 0.5%, to 2260.55, after losing 64.96 yesterday. And the small-cap
, also littered with tech names, rose only 1.55, or 0.4%, to 391.09, after dropping 6.86 yesterday. The Comp sits 9.9% below its Feb. 1 closing high of 2510.20.
It was a mixed day for the tech big-caps, with
standing out on the downside. The software giant lost 4 5/16 to 145 3/4. But
all rose. Dell gained 1 7/16 to 83, taking back a fraction of its 7 1/4-point loss yesterday. Intel rose 3 7/16 to 128 1/8 and Cisco tacked on 1 1/8 to 96 3/16.
'You're starting to see people scale out of the leading issues that really fueled the rebound in October, November and December,' said George K. Baum's Brian Belski. 'Stocks that are fairly overextended in terms of their longer-term price patterns are starting to come back down to reality overall, and we're starting to see some rotation where people are going for upside.'
Large-cap tech stocks have more or less been taking turns being the whipping boy, and today was simply Microsoft's turn, said Brian Belski, chief investment strategist at
George K. Baum
in Kansas City, Mo.
, Cisco, Intel,
-- "they're all kind of taking turns with the selling and profit-taking," he said. "It just happens Microsoft's on the hot button the last couple of days.
"The trend of the overall market," Belski said, "is that you're starting to see people scale out of the leading issues that really fueled the rebound in October, November and December. Stocks that are fairly overextended in terms of their longer-term price patterns are starting to come back down to reality overall, and we're starting to see some rotation where people are going for upside."
Brian Gilmartin, portfolio manager at
Trinity Asset Management
in Chicago, had a different read on Microsoft's woes. "It could be that people are finally realizing that Microsoft's getting its butt beat in court by the
," he said. "Litigation risk is always a tough risk to quantify as a portfolio manager, but there's huge uncertainty right now. I've watched it trade for years and the way it's traded the last couple of days doesn't give me a whole lot of confidence."
Among the other tech-focused indices, the large-cap
rose 0.8% and the
Morgan Stanley High-Tech 35
Netland, meanwhile, was mixed.
TheStreet.com Internet Sector
index gained 2.27, or 0.5%, to 461.40. But
TheStreet.com E-Commerce Index
dropped 1.24, or 1.3%, to 94.01, dragged down by
New York Stock Exchange
advancers topped decliners 1,764 to 1,213 on 742.5 million shares, with 141 new 52-week lows beating 26 new highs. On the
Nasdaq Stock Market
, 2,050 losers led 1,923 winners on 864.3 million shares. New lows outpaced new highs 116 to 23.
Defensive Issues Shine
The strength in the stock market today was in issues that Belski groups together as "defensive growth and consumer-type stocks" -- the Baby Bells, utilities and pharmaceuticals. The
Philadelphia Stock Exchange Phone Index
rose 2.2%, the
Dow Jones Utility Average
gained 1.3% even as bonds lost ground and the
American Stock Exchange Pharmaceutical Index
added 1.4%. The benchmark 30-year Treasury bond lost 29/32 to 98 5/32, lifting its yield to 5.37%.
Insurance was among the best-performing sectors of the day, thanks to the Aegon/Transamerica deal. As Transamerica soared 15 1/4, or 26.5%, to 72 7/8, the
S&P Insurance Index
rose 3.5%. Other financial stocks also had a good day, with the
Philadelphia Stock Exchange/KBW Bank Index
rising 1.1% and the
American Stock Exchange Broker/Dealer Index
Transportation stocks, on the other hand, gave back most of yesterday's impressive gains, with the
Dow Jones Transportation Average
falling 28.29, or 0.9%, to 3123.87.
In the Dow industrials, the best performers were
, contributing 12.5 points,
, throwing in 11.7, and IBM, adding 10.7. The Dow's biggest laggard was
, subtracting 3.5 points.
"The Nasdaq has outperformed the Dow and the S&P by a huge amount over the last three months," Gilmartin said. "On a relative basis, the Dow's just catching up." Looking at the performance of the Nasdaq 100 vs. the Dow and the S&P, he continued, "P/Es expanded on large techs whereas they didn't on large Dow stocks. I think that's because of the greater international exposure of the Dow stocks. It's been a much better environment for large-cap techs. But now, because there's no news for the techs, we're seeing relative outperformance in the Dow."
While things are "not bad in general" for the sector, Gilmartin said, "there's really no good news in the tech sector 'til someone preannounces positive earnings."
Elsewhere in North American equities, the
Toronto Stock Exchange 300
rose 39.40, or 0.6%, to 6364.07 and the
Mexican Stock Exchange IPC Index
advanced 36.31, or 0.9%, to 4112.65.
Thursday'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.
Total Renal Care
tanked 12 1/4, or 58.3%, to an all-time low of 8 3/4 after announcing the
Securities and Exchange Commission
asked it for additional information about a $92.8 million charge from its acquisition of
Renal Treatment Centers
. The dialysis service provider also posted fourth-quarter earnings of 30 cents a share, 7 cents behind the 15-analyst forecast but above the year-ago 19 cents.
IBM picked up 3 3/4 to 174 1/4 on news it will sell computers with
operating systems. Investors took the news as a blow to Microsoft's
operating system, pushing Mister Softee down 4 5/16 to 145 3/4.
Mergers, acquisitions and joint ventures
shot up 4 7/8, or 23.2%, to an all-time high of 26 3/16 after agreeing to acquire Internet and regional telecommunications provider
for $18.5 million in cash and 1.5 million shares of stock.
Delta Air Lines
slipped 1/8 to 54 7/8 after
The Wall Street Journal
reported the airline dropped out as a suitor for
America West Airlines
. Delta began pondering buying America West after
was already well along in its discussions with America West, the newspaper said. America West closed flat at 20; UAL fell 1 3/16 to 59 1/4.
shrank 2 5/16 to 64 5/16 after announcing it launched an employee stock ownership plan in response to the "creeping acquisition" of 34.4% of its stock by
LVMH Moet Hennessy Louis Vuitton
. LVMH gave up 3, or 6.4%, to 44 3/8.
Prime Bancorp hopped 7, or 38.9%, to 25 after Summit Bancorp agreed to buy it in a stock deal valued at $292 million. Summit Bancorp lost 5/16 to 39 1/16.
jumped 7, or 7.5%, to 100 9/16 after launching an online commerce unit as part of its $33 million acquisition of
soared 3 11/16, or 81.9%, to 8 3/16 after
made a C$525 million bid for the company. Barrick Gold lowered 7/16 to 18 1/4.
Transamerica climbed 15 1/4, or 26.5%, to an all-time high of 72 7/8 on news the Netherlands' Aegon is buying the company for $9.7 billion in cash and stock. Transamerica's corporate and insurance operations will merge with Aegon USA's operations immediately after closing, which is expected to occur this summer. The companies said the purchase is the second-largest transaction ever in the U.S. life insurance industry. Aegon added 5 1/8, or 5.4%, to 99 7/8.
Earnings/revenue reports and previews
rose 11/16 to 29 7/8 after reporting fourth-quarter net earnings of 96 cents a share, including several gains. The four-analyst forecast called for an operating loss of 3 cents vs. the year-ago profit of 12 cents. The company also said it sees 1999 earnings coming in flat with 1998 figures, around $2 a share.
vaulted 1 1/2, or 6.4%, to 25 11/16 after last night beating fourth-quarter earnings estimates by 8 cents a share.
took in 15/16 to 32 7/16 after posting fourth-quarter earnings of 87 cents a share, beating the eight-analyst view of 79 cents and moving up from the year-ago 71 cents.
collapsed 7 3/4, or 25.8%, to 22 5/16 after missing fourth-quarter earnings estimates by 4 cents a share.
tumbled 3 3/4, or 17.9%, to 17 1/4, matching an annual low, after warning its second-quarter earnings will fall 10% to 12% below the three-analyst forecast for 29 cents a share. The company, which earned 26 cents in the year-ago quarter, blamed the warning on a drop in revenue from its
Nicholas Commercial IT
lifted 3 7/16, or 14%, to 28 after last night destroying fourth-quarter earnings forecasts by 48 cents a share
grew 3, or 9.7%, to 33 7/8 its fourth-quarter earnings beat estimates by a penny a share last night.
brought in 3/16 to 17 1/2 after saying the SEC completed its review of the company's accounting for charges taken in connection with the acquisitions of
in 1996 and
in 1998, and the company won't have to restate any figures.
sliced off 4 7/8, or 21.2%, to 18 1/8 even after reporting fourth-quarter earnings of 29 cents a share, 1 cent above the 12-analyst estimate and higher than the year-ago 15 cents. The stock has been hit lately by investors worried about the company's latest strategy, including new products and acquisitions.
flew 18 7/16, or 15.6%, to an all-time high of 137 1/4 after making bullish forecasts for its 2001 through 2003 earnings. The company's CFO said analysts' estimates of $13.48 a share for 2003 are "conservative."
stumbled 11, or 46.3%, to an annual low of 12 13/16 after warning it is cautious about its short-term revenue. The company also reported fourth-quarter earnings of 37 cents a share, up from the year-ago 32 cents.
sank 3 13/16, or 16%, to 20 1/16 after last night reporting a fourth-quarter loss of 1 cent a share, in line with estimates.
jumped 2 1/16, or 14.9%, to 15 15/16 despite last night missing first-quarter earnings by 2 cents a share. Today,
raised the stock to strong buy from buy.
plunged 8 11/16, or 39.6%, to 13 3/8 after last night lowering its first-quarter revenue targets. The company also reported fourth-quarter earnings of 19 cents a share, above the year-ago 4 cents.
picked up 3/8 to 47 3/16 after reporting fourth-quarter earnings of 67 cents a share, topping the 20-analyst consensus by a penny and the year-ago 58 cents.
In other earnings news:
Offerings and stock actions
swelled 4 1/2, or 11.4%, to 45 1/8 after setting a 2-for-1 stock split.
rallied 9 15/16, or 17.1%, to 68 1/8 on a bullish research note from
Donaldson Lufkin & Jenrette
, which upgraded the stock to buy from market perform. The firm, which also raised its 12-month price target on BCST to 100 from 40 a share, said Broadcast.com is "well-positioned to benefit from the expanding broadband user base and from accelerating consolidation trends sweeping the Internet sector." DLJ was one of the managing underwriters on Broadcast.com's IPO last July.
dropped 2 1/8, or 6.1%, to 32 5/8 after
Warburg Dillon Read
lowered it to buy from strong buy.
climbed 1 7/8, or 10.7%, to 19 1/2 after
Morgan Stanley Dean Witter
upgraded the stock to outperform from neutral and gave it a price target of 22 a share.
King World Productions
advanced 1 to 27 7/8 after saying it hired former
CEO Frank Biondi as a consultant on strategic planning and acquisitions.
skidded 2 1/16, or 16.7%, to 10 5/16 after announcing
won't continue with the development of three first generation compounds in the Retinoid X Receptor program for diabetes. Lilly rose 4 7/8, or 5.5%, to 93 3/8.
Several casino stocks rallied today as investors bargain hunted for cheaper stocks.
hopped 1 9/16, or 9.7%, to 17 5/8 and
MGM Grand Hotel
hopped 2 3/4, or 8.9%, to 33 3/4.