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Stampede Into Tech Stocks Sends Nasdaq Blasting Through 3700

With Nasdaq 3000 barely fading in memory, Nasdaq 4000 got 93 points closer as big-cap tech remained the focus.
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Shrugging off another awful session for the bond market, which saw yields soar, traders and investors lustily bought tech stocks and sent the

Nasdaq Composite Index

up a whopping 2.6%.

The Nasdaq Comp -- which rose to an all-time intraday high of 3715.25 -- ended the session up 93.11 to a record 3715.06, beating the old record of 3658.17.

Comp heavyweights

Microsoft

(MSFT)

,

Intel

(INTC)

,

Cisco

(CSCO)

,

Sun Microsystems

(SUNW)

,

Dell

(DELL)

,

MCI WorldCom

undefined

and

Qualcomm

(QCOM)

all posted solid gains and aided in the Comp's surge. The stocks of semiconductor companies and computer makers, along with Internet and telecommunications issues, helped juice up the Comp.

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Message Boards.

The

Philadelphia Stock Exchange Semiconductor Index

surged 4.1%; the

Nasdaq Telecommunications Index

hopped 2.3%; while the

Philadelphia Stock Exchange Computer Box Maker Index

jumped 3.3%.

Microsoft was a big winner again today, rising 5 5/16 to 113 11/16, closing at an all-time high. It also hit an intraday all-time high when it peaked at 115.

TheStreet.com Internet Sector

index soared 28.73, or 2.6%, to 1123.63.

CMGI

(CMGI)

led the DOT by far, hopping 21 3/4, or 10.9%, to 221 9/16.

The buying momentum in the tech sector led by the huge surge in shares of Microsoft and Intel yesterday simply continued on today as investors and traders jumped into stocks that have been winners this year, according to some market participants.

"There's still a lot of genuine interest in these names," said Barry Berman, head of stock trading at

Robert W. Baird

, pointing out that a lot of money is going into Internet and technology stock mutual funds. The longevity of the money in those funds, however, "I don't know," he said.

As for blue-chips, after struggling for most of the session, the

Dow Jones Industrial Average

surged late to close in positive territory. The Dow advanced 19.57, or 0.2%, to 11,244.89, led by Microsoft and

Hewlett-Packard

undefined

.

However, reflecting the poor performance of the financials overall today,

American Express

(AXP)

was a big loser among the Dow's components, falling 5 9/16 to 152 5/8.

The

S&P 500

added 5.59, or 0.4%, to 1418.78. The small-cap

Russell 2000

rose 3.94, or 0.9%, to 465.26.

TheStreet.com

Red Hots index surged 15.66, or 6.4%, to 353.25. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money. (You can check quotes on the Red Hots index and its component stocks at

http://www.thestreet.com/redhots.

Ted Bridges, vice president and money manager at

Bridges Investment Counsel

in Omaha, Neb., said the market has seen money flowing out of places that haven't done well, and money been put to work in places where stocks have done well, namely big high-profile tech names. But beyond that, he noted that the market's breadth hasn't been real great, which "suggests a market that's pretty tired."

Meanwhile, the 30-year Treasury bond tumbled 28/32 to 96 14/32, putting its yield at 6.39%, as the bond market slumped in the wake of a huge selloff in European bond markets and on bond market unfriendly economic data here at home. The bond market has been falling in recent sessions on fears that the

Federal Reserve

will raise interest rates early next year, perhaps as soon as February.

The woeful performance of the bond market weighed on financial stocks. The

Philadelphia Stock Exchange/KBW Bank Index

slumped 1.7%, while the

American Stock Exchange Broker/Dealer Index

gave up 1.2%.

"The rise in bond yields is cause for some concern" for the stock market, cautioned Paul Cherney, market analyst at

S&P MarketScope

. "Eventually it's going to weigh on nonfinancials. It will." The analyst expects the

Federal Open Market Committee

to shift to a tightening bias when it meets next week and sees the FOMC voting to raise interest rates when it meets in February.

Part of the reason for the market's surge lately has been because money managers are piling into stocks that have been winners this year so they can show they've got winners in their portfolios at the end of the year. And those winners are in the Nasdaq.

As for movement, the analyst noted that it was all about the Nasdaq today. "That's where the money's going," Cherney said. "The momentum players are jumping all over the Internets.

"I think the piper is standing in the wings, tuning up," Cherney said. He pointed out that there's a positive bias in place because it is the end of the year. However, the market might see a one-day shot up on the first day of trading in January and then four or five days after that of profit-taking.

In

New York Stock Exchange

trading, 1.07 billion shares were exchanged -- an unprecedented third straight day of billion-plus NYSE volume -- while declining stocks beat advancers 1,629 to 1,454. In

Nasdaq Stock Market

action 1.421 billion shares traded while gainers edged losers 2,107 to 2,045. New 52-week lows thumped new highs 389 to 58 on the Big Board while new highs beat new lows 153 to 127 in over-the-counter trading.

Among other indices, the

Dow Jones Utility Average

fell 1.67, or 0.6%, to 270.52; the

Dow Jones Transportation Average

rose 1.97, or 0.1%, to 2921.51; and the

American Stock Exchange Composite Index

slumped 5.08, or 0.6%, to 833.86.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

rose 61.88, or 0.8%, to a record 8047.17 and the

Mexican Stock Exchange IPC Index

gained 86.88, or 1.3%, to 6859.03.

Thursday's Company Report

By Eileen Kinsella
Staff Reporter

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.

)

USWeb/CKS

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popped 7 3/8, or 20.8%, to 43 1/16 after it signed a deal with

3Com

(COMS)

to develop and market wireless technology and software for business. 3Com, which climbed 7/16 to 48 9/16, said it will contribute up to $100 million to be used to both fund the alliance as well as take an equity stake in USWeb/CKS.

A handful of initial public offerings didn't have a mad dash out of the gate, for a change. And -- you might want to sit down for this one -- the two Internet-related offerings of the bunch weren't even the top gainers this time around. See the table below for first-day results, and while you're at it, check out the additional

coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Mergers, acquisitions and joint ventures

Pathmark Stores

parent

Supermarkets General Holdings

said

Ahold

undefined

breached a merger agreement to buy the company for $1.75 billion after Ahold dropped its bid. Earlier, Ahold said it axed its takeover plans for U.S. Pathmark supermarkets because of opposition from the

Federal Trade Commission

. Shares of Ahold slipped 3/16 to 27 3/16.

Ariba

(ARBA)

jumped 13 1/2, or 5.9%, to 237 1/2, after saying it has agreed to purchase closely held

Tradex

in a stock swap valued at $1.86 billion. Ariba said it expects the transaction to be completed in the second quarter of 2000. For more on this

story, check out the coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Best Buy

(BBY)

rose 2 1/8 to 49 3/8 and Microsoft moved up 5 5/16 to a second consecutive record close, of 113 11/16 after the companies said they have entered a deal that includes joint marketing and profit sharing. Microsoft also plans to buy $200 million worth of Best Buy common stock. For more on this

story, check out the coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Cendant

(CD)

gained 6 9/16, or 39.9%, to 23 after saying it agreed to a pact with

Liberty Media

undefined

involving direct marketing initiatives over cable. Cendant said Liberty Media would invest $400 million in Cendant, while Liberty's CEO John Malone will buy 1 million Cendant shares. Liberty rose 1 3/8 to 48. For more on this

story, check out the coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Cox Communications

undefined

slipped 3/8 to 48 5/8 after it said it entered an agreement with

Excite@Home

(ATHM)

to jointly develop digital services. Excite@Home lost 1 1/4 to 49.

Dow Chemical

(DOW)

dropped 6 1/16 to 121 7/8 after it said it sold 3.5 million shares of its common stock to meet accounting conditions for its merger with

Union Carbide

(UK)

. Shares of Union Carbide lost 3 5/16, or 5.1%, to 61 11/16.

First Bancorp

(FBP)

inched up 3/16 to 20 1/8 after it said it would buy

First Savings Bancorp

undefined

in a stock swap worth $73.97 million. First Savings Bancorp rose 3/8 to 18 3/4.

The U.K. government said it would require

France Telecom

(FTE)

to fully divest its

Crown Castle

holdings before its planned investment in

NTL

undefined

can proceed. NTL gained 2 5/16 to 108 3/16, while France Telecom lost 1 1/2 to 115 1/2.

IBM

(IBM)

rose 2 3/16 to 109 3/16 after it said after yesterday's close, that it has been awarded a deal with

Deutsche Telekom

(DT)

to supply the biggest data system warehouse ever. The data system, known as

DT

, which is set to begin development in the third quarter of 2000, will be able to handle 100 terabytes of information. Deutsche Telekom added 5/16 to 58 1/4.

Shorewood Packaging

undefined

gained 1 7/8, or 11.4%, to 18 3/8 after it said it has rejected

Chesapeake's

undefined

$17.25-a-share offer, calling it inadequate. Chesapeake, said it was disappointed with Shorewood's response but said it remained committed to its tender offer. Chesapeake slipped 3/4 to 29 5/8.

Vodafone AirTouch

(VOD)

gained 1 7/16 to 49 3/8 after it said it agreed to a pact with the

BBC

to equip mobile phones in Britain with text, audio and video services, including news.

Wal-Mart

(WMT)

rose about 2, or 4%, to 68 5/8 while

America Online

(AOL)

lost 3 5/8 to 86 after the companies said they will form a strategic pact to launch a jointly branded Internet access provider. The two companies said they would use cross-marketing efforts, which include Wal-Mart offering AOL software at its stores and joint advertising through print, television and radio .

Friedman Billings Ramsey

raised its 2000 earnings estimates for AOL to 34 cents a share from 32 cents and raised its 2001 estimates to 50 cents from 49 cents. Analyst Ulric Weil said the deal with Wal-Mart "opens up a whole new set of customers with a different income and demographic profile".

For more on this

story, check out the coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Warnaco Group

undefined

lost 1/2 to 10 5/8 after it said its $20.80-a-share cash bid to acquire the maker of

Speedo

swimwear,

Authentic Fitness

(ASM)

, has succeeded now that 96.95% of ASM shares have been tendered. Shares of ASM were unchanged at 20 3/4. Authentic Fitness will become part of Warnaco's

A Acquisition

unit.

Earnings/revenue reports and previews

AAR

(AIR)

slipped 9/16 to 15 7/8 after it reported second-quarter earnings of 40 cents a share, missing the seven-analyst estimate of 42 cents but up from the year-ago 36 cents a share.

American Greetings

(AM)

gained 1 1/16 to 24 1/4 after it posted third-quarter earnings of 81 cents a share, a penny better than the four-analyst estimate but down from the year-ago $1.04. The company said it expects earnings to grow by 35% in 2001 and by 20% in 2002.

Bed Bath & Beyond

(BBBY)

lost 2 1/16, or 6.5%, to 30 after it reported after yesterday's close, third-quarter earnings of 22 cents a share, in line with the 19-analyst estimate and up from the year-ago 17 cents. The company said it plans to open five superstores in the fourth quarter, and 60 new superstores in fiscal 2000.

Cintas

(CTAS)

lost 1 15/16 to 45 7/8 after it posted second-quarter earnings of 43 cents a share, a penny shy of the 12-analyst estimate but up from the year-ago 39 cents. Cintas said 1998 results were restated to reflect the company's acquisition of Unitog in March 1999, accounted for as a pooling of interests.

CMGI popped 21 3/4, or 10.9%, to 221 9/16 after it posted after yesterday's close, a narrower-than-expected loss and announced a 2-for-1 stock split.

CMGI posted a first-quarter loss of $1.08 a share, smaller than the three-analyst estimate of a loss of $1.76 a share, but down from the year-ago profit of 38 cents a share. CMGI said, excluding items, the company lost 10 cents a share for the quarter. Revenue jumped to $123.7 million in the latest quarter, from $37.4 million a year ago.

The stock split will be distributed Jan. 11 to shareholders of record Dec. 28.

DuPont

(DD)

inched up 0.4%, to 65 5/16 after it said it will triple the size of its photopolymer and electronic operation over the next decade.

FDX

(FDX)

rose about 4, or 10.4%, to 42 7/8 after it reported second-quarter earnings of 57 cents a share, beating the 12-analyst estimate of 55 cents but down from the year-ago 61 cents. The company said its

FedEx

unit may add a fuel surcharge to the price it charges for delivering packages to help mitigate rising jet fuel prices. For more on this

story, check out the coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Gtech Holdings

undefined

inched up 3/16 to 20 1/8 after it posted third-quarter earnings of 65 cents a share, beating the single-analyst estimate of 63 cents and up from the year-ago 64 cents.

Newhall Land & Farming

undefined

inched up 3/8 to 35 7/16 after it said it expects record earnings in 1999 from strong residential, commercial and industrial land sales. The developer said it expects 1999 earnings in the $85 million-to-$90 million range, and fourth-quarter earnings in the range of $52 million to $57 million.

PP&L Resources

(PPL)

gained 3/16 to 21 7/16 after it said it had revised upward its earnings projections for 1999 and 2000, citing increased power sales, improved trading margins and strong international performance. PP&L raised its 1999 earnings estimates to $2.30 to $2.35 from $2.15 and set its 2000 estimate at about $2.65. The current 11-analyst estimate is $2.16 a share for 1999 and $2.43 a share in 2000.

Texas Industries

(TXI)

dropped 1 11/16 to 38 after it reported second-quarter earnings of 50 cents a share, beating the seven-analyst estimate of 46 cents but down from the year-ago $1.01. Texas Industries said losses at its steel operations were behind the dip in profits, but said it would return to profitability over the next six months.

Offerings and stock actions

Stride Rite

undefined

gained 7/16, or 8%, to 5 15/16 after it said it upped its share-repurchasing program by 5 million shares.

Supervalu

(SVU)

inched up 3/16 to 17 5/16 after it said it has set a repurchasing plan to buy back up to 5% of its outstanding stock.

Vitra Technology

undefined

popped 21, or 13.1%, to 182 1/2 after it set a 2-for-1 stock split.

Analyst actions

Morgan Stanley Dean Witter

raised its price target for the following chip companies, citing an outlook of 25% to 30% industry revenue growth in 2000, and 20% to 25% in 2001:

Atmel

(ATML)

,

Conexant Systems

(CNXT)

;

Lattice Semiconductor

(LSCC)

and

Microchip Technology

(MCHP)

.

Atmel was upped to 72 from 60. Shares of Atmel hopped 5, or 10.6%, to 52 1/8.

Conexant was raised to 80 from 45. Shares of Conexant climbed 7 3/16, or 11.4%, to 70.

Lattice Semiconductor was raised to 80 from 60. Lattice edged up 2 3/4, or 6.2%, to 46 13/16.

Microchip Technology was lifted to 110 from 80. Shares of Microchip Technology bounced 3 15/16, or 6.4%, to 64 5/8.

Bear Stearns

rolled out coverage of

American National Can

(CAN)

as a neutral. Shares of American National Can advanced 1/16 to 12 3/4.

PaineWebber

said it upped its price target on

Amgen

(AMGN)

to 60 a share from 50. Shares of Amgen lost 1 1/8 to 44 3/8.

Merrill Lynch cut

Bank of America's

(BAC)

1999 earnings-per-share estimate to $4.60 from $4.65.

Schroder

said it raised its price target on Cisco to 140 from 90. Shares of Cisco added 1 15/16 to 97 7/8.

Warburg Dillon Read

upped its price target on

Cytyc

undefined

to 61 from 44. Shares of Cytyc gained 3 15/16, or 8.9%, to 48 1/4.

PaineWebber raised its price target on

Ericsson

undefined

to 75 from 55 and upped its 2001 earnings estimates to $1.50 a share from $1.40. Shares of Ericsson rose 3/16 to 58 5/8.

Goldman Sachs

sliced its rating on

General Mills

(GIS)

to market performer from recommended list. Shares of General Mills tacked on 1/8 to 73 11/16.

Warburg Dillon Read began coverage of

ISS

undefined

as a buy and set a price target of 65. Shares of ISS slid 15/16 to 48 5/8.

Bear Stearns began coverage of

Ivex

undefined

with a neutral rating. Shares of Ivex slipped 3/16 to 9 1/4.

Merrill Lynch

upped its intermediate rating on

Kmart

undefined

to a buy from accumulate. Shares of Kmart advanced 3/8 to 11 3/8.

Gruntal

began coverage of

Level 8

(LVEL)

as an intermediate, long-term outperform. Shares of Level 8 mounted 5 3/4, or 19%, to 36 1/2.

SG Cowen

initiated coverage of

Mediaplex

(MPLX)

with a buy rating and a price target of 78. Shares of Mediaplex edged up 5 7/8, or 11.7%, to 55 15/16.

Goldman Sachs rolled out coverage of

Pinnacle Holdings

undefined

with a market outperformer rating. Shares of Pinnacle Holdings hopped 5/8 to 37 1/4.

Morgan Stanley Dean Witter upped its price target on

STMicroelectronics

(STM)

to 175 euros from 120 euros and maintained a strong buy rating. Shares of STMicroelectronics soared 12 1/16, or 9.5%, to 138 13/16.

Miscellany

Standard Pacific

(SPF)

declined 1/8 to 11 after it said it has tapped Stephen Scarborough to become its CEO.