Bouncing back from the brink of a bond-induced blowoff, stock proxies closed off their intraday bottoms. Equities ended with a negative bias, but losses were buttressed by buoyant tech stocks.
The bond market again hosted Wall Street's biggest drama, falling hard despite
cancellation of an offering everybody was worried about but apparently
never existed. The price of the 30-year Treasury bond fell 1 1/32 to 87 27/32, its yield rising to 6.15%.
Beyond Ford's dosey-do, bonds were roiled by rumors a consulting firm -- presumed to be Washington-based
-- reported the
will raise interest rates 50 basis points next week, instead of the market-pleasing 25. But
Ron Insana, who's been accused of worst-case-scenario-ism by some
pundits, put an end to that, helping spur a late-day recovery in stocks although bonds paid him no nevermind.
The Nasdaq Composite Index gained 17.87, or 0.7%, to 2598.13 after trading as low as 2557.46.
TheStreet.com Internet Sector
index rose 11.69, or 2%, to 588.61 vs. a nadir of 571.13.
Dow Jones Industrial Average
fell for a third straight day, falling 54.77, or 0.5%, to 10,666.86 but off its low of 10,616.84. The
dipped 2.82, or 0.2%, to 1333.06 vs. a session low of 1324.32. The
shed 0.29, or 0.1%, to 447.04 after trading as low as 444.79.
Market averages were aided by tech behemoths such as
, as well as oil giants such as
rose 1.3%; the
Philadelphia Stock Exchange Semiconductor Index
gained 1.8%; and the
American Stock Exchange Oil & Gas Index
Financials, drugmakers and retailers were on the downside. The
Philadelphia Stock Exchange/KBW Bank Index
American Stock Exchange Pharmaceutical Index
American Stock Exchange Retailing Index
each fell at least 1.3%.
were the Dow's biggest negatives. Meanwhile,
today suffered a fate similar to
yesterday, falling 4.4% despite posting better-than-expected earnings.
New York Stock Exchange
trading, 731.8 million shares were traded while declining stocks led advancers 1,747 to 1,213. In
Nasdaq Stock Market
activity, 955.3 million shares were exchanged while losers led 2,024 to 1,791. New 52-week lows bested new highs 67 to 51 in Big Board action although new highs led 71 to 51 in over-the-counter trading.
Won't Get Fooled Again
With bond yields on the forward march, you'd think growth stocks would hesitate. Instead, a spate of mergers and rumors thereof sent techs higher, with Net names leading.
unit and possibly
was just the biggest of several deal rumors moving stocks. CMGI gained 4.2% and Lycos rose 4.8%, while Compaq slid 1.6%.
fell 6.3% on fears a CMGI-Alta Vista deal would cost DoubleClick one of its biggest clients (Alta Vista).
rose 27.8% on speculation
will tender a bid; Amazon.com rose fractionally.
gained 6.8% on rumblings about a possible
buyout; Gateway fell fractionally.
gained 9.2% after last night's announcement of a $280 million offer from
, which slid 6.5%.
jumped 11.1% on word
Metromedia Fiber Network
plans to buy it for about $1.6 billion; Metromedia fell 11.9%.
climbed 6.8% after inking a content and marketing agreement with
, which gained 1.9%.
fell 7.6% after upping its already sizable offers for
U S West
, up 1.8%, and
, higher by 3.2%.
The deals and would-be deals sparked a "who's next?" discussion nearly rivaling the album of the same name in scope and impact.
Rumored potential merger targets included
, up 6.8%, and
, which rose 7.9%.
Meanwhile, new issue
soared 182% and fellow debutante
"I think some of the rumors are B.S.," said Ronny Kraft, CEO of
Gotham Capital Management
, speaking about both mergers and a 50-basis-point rate hike. "Stocks with green are standing apart from the majority -- each one has a story."
Regarding the Fed, "it wouldn't be outrageous for the Fed to raise rates 50 basis points but I don't expect it to happen," he said. "Fifty basis points would really, really hurt this market and I don't think that's what
is trying to accomplish. He'd like to slowly drain the air out of the bubble."
As for the bigger picture, there's "no reason" for either stocks or bonds to go higher, Kraft said. "The market has already adopted the idea the Fed is going to raise rates. By default it's 25
basis points and only one and it's pre-emptive. We could have a problem if the Fed raises 50. If a rumor gets out, spread by people potentially short the bond," it's not surprising to see markets wobble.
Separately, Kraft said his firm is no way associated with the Gotham Capital Management whose CFO was arrested on fraud charges, as reported in today's
New York Times
. (After the close, Kraft's firm came out with a press release saying: "We want to reassure our clients and our colleagues in the media that while our firm does manage a hedge and while we do share the name, the similarities end at that.")
Among other indices, the
Dow Jones Transportation Average
fell 12.72, or 0.4%, to 3378.91; the
Dow Jones Utility Average
slid 1.71, or 0.5%, to 326.68; and the
American Stock Exchange Composite Index
gained 5.69, or 0.7%, to 771.16.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
fell 17.94, or 0.3%, to 6936.97 and the
Mexican Stock Exchange IPC Index
shed 136.18, or 2.4%, to 5637.35.
Wednesday'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, Goldman Sachs scratched off 3 to 65 after posting second-quarter earnings of $1.30 a share, topping the 11-analyst outlook for $1.07 and moving ahead of the year-ago $1.
Elsewhere, Beyond.com swelled 7 1/8, or 27.8%, to 32 7/8 on rumors that Amazon.com might be considering purchasing the online software seller. Amazon picked up 1/4 to 117 3/4.
Mergers, acquisitions and joint ventures
AboveNet Communications, an outsourcer of Internet hosting and connectivity services to businesses, reeled in 4 1/16, or 11.1%, to 40 13/16 after fiber-optic network operator Metromedia Fiber Network set plans to buy it for about $1.6 billion in stock. Metromedia slouched 5 1/16, or 11.9%, to 37 1/2.
shot up 2 3/4, or 26.8%, to 13 1/16 after last night saying it ended its contract to buy
EarthLink grew 3 7/8, or 6.8%, to 61 1/4 on continued speculation Gateway is interested in buying the Internet service provider. Gateway lowered 1/8 to 64 5/8.
tumbled 2 3/4, or 9.4%, to 26 11/16 on word it's acquiring
in a $159 million stock swap. Market Guide sliced off 1 1/4, or 5.5%, to 21 5/8.
Qwest Communications declined 2 11/16, or 7.6%, to 32 9/16 after sweetening its combined takeover bid for both U S West and Frontier to $48 billion from $45.4 billion. Both companies rejected Qwest's original offers and reaffirmed their plans to get together with
Stanford Telecom flew 2 7/16, or 9.2%, to an annual high of 28 7/8 on last night's news Canada's Newbridge Networks will buy the company for $280 million in stock. Newbridge skidded 2, or 6.5%, to 28 3/4.
Earnings/revenue reports and previews
tacked on 1 to 45 5/8 after reporting first-quarter earnings of 77 cents a share, 3 cents higher than the six-analyst view and above the year-ago 68 cents.
Crown Cork & Seal
slid 3 1/2, or 10.8%, to 28 15/16 after warning its second quarter earnings will come in at 75 cents to 77 cents a share, well below the eight-analyst view of 92 cents a share.
added 1/16 to 23 5/8 after posting third-quarter earnings of 24 cents a share, beating the 11-analyst outlook for 22 cents and moving ahead of the year-ago 18 cents.
shed 1 1/8, or 12.9%, to 7 11/16 after last night recording recorded a third-quarter loss of 17 cents a share, narrower than the four-analyst outlook for a loss of 18 cents but wider than the year-ago loss of 9 cents. Today,
Banc of America
lowered the stock to hold from buy.
plunged 10 5/32, or 60.4%, to an all-time low of 6 11/16 after warning it expects to lose 30 cents to 35 cents a share for its second quarter, a far cry from the six-analyst call for earnings of 17 cents a share.
lost 4 3/8, or 13.9%, to 27 1/8. Last night, the networker's CFO said 3Com expects its revenue for the first and third quarter of 2000 to come in below year-ago figures. 3Com posted fourth-quarter earnings of 24 cents a share, 1 cent higher than the 25-analyst view and ahead of the year-ago 18 cents. The company also approved a 15 million-share repurchase plan.
downgraded the stock to hold from strong buy and dropped its 2000 earnings estimate for the company to $1.15 from $1.38 a share.
dwindled 1 11/16 to 56 5/16 after announcing second-quarter earnings of $1.16, above the 12-analyst call for a repeat of the year-ago $1.11.
Offerings and stock actions
Ariba torpedoed up 67, or 291.3%, to 90 after
Morgan Stanley Dean Witter
priced its 5 million-share IPO above range at $23. Ariba's software is used to automate purchasing of operating resources such as office supplies and computer products.
GlobeSpan rocketed 27 1/4, or 181.6%, to 42 5/16 after
BancBoston Robertson Stephens
priced its 3.25 million-share IPO top-range at $15. The company is a developer of advanced digital subscriber line integrated circuits.
hopped up 1 5/8, or 6.8%, to 25 5/8 after its 42-million share IPO priced top-range at $24. The initial offering for the company, the discount brokerage unit of
, originally was set for 32 million shares.
raised the price range for
(JNPR:Nasdaq) 4.8 million-share IPO to $28 to $30 a share from $21 to $23 a share. The company provides high-speed Internet routers.
fell 2 3/4, or 5.1%, to 51 5/8 after
slashed it to market performer from long-term buy. Morgan Stanley Dean Witter lowered its 1999 earnings view for the company to $2.60 from $2.72 a share. Last night, Albertson's announced plans to sell 144 stores to complete its merger with
jumped 2 1/16, or 8.9%, to 25 3/8 after
Warburg Dillon Read
started coverage with a buy and a price target of 29, saying it sees the company's earnings growing by 35% in the next five years.
sloughed off 1 9/16, or 13.7%, to 9 27/32 after
Deutsche Banc Alex. Brown
lowered it to buy from strong buy.
DoubleClick slipped 5 11/16, or 6.3%, to 84 15/16 after
Janney Montgomery Scott
cut it to accumulate from buy because of a potential deal between CMGI and Compaq.
tacked on 13/16 to 53 7/16 after Morgan Stanley Dean Witter upgraded it to outperform from neutral with a price target of 65. The firm also raised its 1999 and 2000 earnings estimates for IP.
rose 9/16 to 70 1/4 after Morgan Stanley Dean Witter increased its price target for the company to 83 from 70, saying "there is still upside potential for the stock, based on increasing U.S. and European
revenues and the potential for accretive product acquisitions." Synagis is the company's drug designed to fight lower respiratory tract diseases in children.
climbed 3 3/16 to 133 7/8 after
raised its price target on stock to 165 from 150, saying the company continues to experience strong trends across its core businesses.
advanced 2 9/16 to an all-time high of 63 5/16,
advanced 3 1/2, or 7.8%, to 48 5/16 and
advanced 4 1/4, or 10%, to 46 15/16 on last night's news they all will move into the S&P 500.
collapsed 9, or 23.9%, to 28 3/4 after
set plans to form a competing electronic bill payment company called
. The banks said the company will be ready for business by the end of the year.
shaved off 2 3/8, or 8.4%, to 26 after reducing its stake in
to 6.5% yesterday and down to 2.2% today. Claire's also said it sees its June same-store sales in the mid- to high-single digits and that it sees second-quarter earnings meeting or exceeding estimates for 33 cents a share.
slid 1 5/16, or 8.5%, to 14 1/18 after announcing two rigs under construction at its Friede Goldman Offshore shipyard in Pascagoula, Miss., will be delayed. The rigs are now scheduled to be delivered in the second quarter of next year.
added 2 1/16 to 48 1/16 after an advisory panel to the
Food and Drug Administration
backed, with conditions, the company's device used to repair abdominal aortic aneurysms.
Staff reporter Mavis Scanlon contributed to this report.