Stars Align to Send Indices Rocketing at Week's End

A confluence of factors led by the benign November jobs report spurred a powerful rally that has even skeptics a little awed.
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SAN FRANCISCO -- The new paradigm crowd scored another big victory today, showing (again) why he who hesitates or she who worries is truly lost in this market. Stock proxies retreated a bit from their early-morning rampage, but that did little to diminish the enthusiasm.

"It's a strong move. There's no other way to describe it," said Bryan Piskorowski, market analyst at

Prudential Securities

. "We did a lot of the volume and all the pin action in the first couple hours, but we haven't given much back at all. It's a very strong day."

A benign

employment report provided the underpinning for Wall Street's advance, as one of the major concerns of many market players -- the bond market's recent lassitude -- was removed.

The price of the 30-year Treasury bond rose 24/32 to 98 5/32, its yield declining to 6.26%. The jobs report -- itself a source of consternation this week -- was the catalyst for the bond rally. The

Labor Department

reported nonfarm payrolls rose 234,000 in November, slightly greater than expectations, while the unemployment rate was steady at 4.1%. Perhaps most importantly, average hourly earnings rose by 0.1% vs. expectations for a 0.3% increase.

The jobs report and subsequent bond rally helped equity traders overcome the concerns that had constrained blue-chip proxies

yesterday while the

Nasdaq Composite Index

was storming to another record. The Comp pulled the trick again today, and was joined in previously uncharted territory by the

S&P 500

and

TheStreet.com Internet Sector

index.

The Comp closed up 67.84, or 2%, to 3520.62 after trading as high as 3553.56. Tech bellwethers such as

Cisco

(CSCO) - Get Report

,

Oracle

(ORCL) - Get Report

,

Sun Microsystems

(SUNW) - Get Report

,

Apple

(AAPL) - Get Report

and

Yahoo!

(YHOO)

each established all-time highs. The

Nasdaq 100

rose 2.1% to a record 3172.37.

After trading as high as 1447.42, the S&P 500 closed up 24.25, or 1.7%, to 1433.29, besting its previous high of 1424.94 set

Nov. 18. The DOT climbed 51.34, or 5.3%, to a record 1028.54. Additionally,

TheStreet.com

Red Hots index rose 5.36, or 1.6%, to 338.00. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money

The

Dow Jones Industrial Average

traded as high as 11,341.23 intraday but couldn't sustain the impetus to set a new closing high. Still, the average rose 247.12, or 2.2%, to 11,286.18, producing its eighth-biggest point gain ever.

Broader market averages gained as well; the

Russell 2000

rose 4.14, or 0.9%, to 464.58.

Ducks in Order

The advance resulted from a "confluence of events," Pru's Piskorowski said.

First, the jobs data "reassert that productivity gains can foster low unemployment without inflation," he said, predicting the

Federal Reserve

will not raise rates again until -- at earliest -- its March 21 meeting. Secondly, "there was a lot of money still sitting on the sidelines" to "counterbalance any profit-taking or portfolio adjustments" by fund managers, he continued. Third, we're in a "seasonally strong period."

As a result, Prudential remains "very bullish" and is "pushing" high tech, the analyst said. "I don't see the tech story paring itself back and want to remain overweighted. When we get over whatever Y2K hump is left, we move into strong fund inflows as we do every year in the January timeframe. That offers us some legs into the new year."

Given the market's big gains "there could be profit-taking here and there," he conceded. But the reaction to "scary" days like

Tuesday "tells you how short and swift bull market profit-taking scenarios last."

There were a few items for naysayers to point to as being "wrong" with the action. In addition to the Dow's failure to reach a new high and the

Chicago Board Options Exchange Market Volatility Index

falling 10.6% to a complacency-embracing 20.82, market breadth narrowed as the day progressed.

In

New York Stock Exchange

trading, 1.006 billion shares were exchanged while advancers led declining stocks 1,818 to 1,254. In

Nasdaq Stock Market

action 1.531 billion shares traded -- the fifth-busiest session in Nasdaq history -- while gainers led 2,062 to 2,018. New 52-week lows outpaced new highs 185 to 98 on the Big Board while new highs led 269 to 85 in OTC trading.

The NYSE's new high list included Dow components

Home Depot

(NYSE)

and

Procter & Gamble

(PG) - Get Report

. However, the average got its biggest boost from tech giants

Hewlett-Packard

(HWP)

and

IBM

(IBM) - Get Report

.

Financial components

American Express

(AXP) - Get Report

and

J.P. Morgan

(JPM) - Get Report

, also powered the Dow's gain, along with

General Electric

(GE) - Get Report

. The

Philadelphia Stock Exchange/KBW Bank Index

rose 2.9% while the

American Stock Exchange Broker/Dealer Index

gained 2.5%.

Other standouts included

Nokia

(NOK) - Get Report

, up 7.2% to an all-time high of 155 after forecasting better-than-expected growth in mobile phone subscribers. Also,

BEA Systems

(BEAS)

soared 19.3% to a record 115 1/2 after

Goldman Sachs

added the stock to its recommended list.

Among other indices, the

Dow Jones Transportation Average

gained 34.51, or 1.2%, to 2928.80; the

Dow Jones Utility Average

added 1.74, or 0.6%, to 283.17; and the

American Stock Exchange Composite Index

rose 1.89, or 0.2%, to a record 835.25.

For the week, the Dow gained 2.7%, the S&P added 1.2%, the Nasdaq rose 2.1%, the Russell added 1.2%, the DOT jumped 4.4%, the Dow transports edged up 0.7%, the Dow utilities rose 0.7%, the Amex Composite climbed 0.6% and the TSC Red Hots fell 2.3%.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

gained 129.11, or 1.7%, to 7794.73 and the

Mexican Stock Exchange IPC Index

rose 99.91, or 1.6%, to 6470.41. Despite today's jump the TSE was still down 1.2% for the week, while the IPC was up 2.1% for the week.

Friday'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.

)

A handful of heavyweights got swept up to new highs amid all the excitement. On the Big Board, Dow component Home Depot climbed about 2, or 3.7%, to a record 84 1/4, while Procter & Gamble popped up 1 1/4 to a record 113 3/4. Among top contributors to the Dow's 247-point leap, tech giant Hewlett-Packard hopped about 7, or 7.3%, to 107, while IBM jumped about 6, or 6.4%, to 112.

Mergers, acquisitions and joint ventures

Carnival

(CCL) - Get Report

climbed 1 3/4 to 49 3/4 after it said it would agree to sell its interest in its smaller rival

NCL Holding

(NRW)

if its $884 million takeover offer is countered by a higher bid. Including debt, the deal is valued at $1.7 billion. NCL Holding, which closed up 3/16 to 16 3/16, said that other firms have expressed interest in the company. Carnival said it has accumulated 4.3 million shares of NCL. Carnival's position gives it a 1.8% interest in NCL.

For more on the Carnival

saga, take a look at the story written today by

TheStreet.com/NYTimes.com

joint newsroom.

Chesapeake

(CSK)

inched up 3/16 to 31 after it said it has made a $500 million, or $17.25-a-share, tender offer for

Shorewood

(SWD)

. Chesapeake boosted its latest hostile takeover offer by 4% after Shorewood called its $16.50-a-share bid "grossly inadequate." Shorewood gained 1 9/16, or 10%, to 17 1/4.

In addition, Chesapeake brought on a lawsuit against Shorewood, alleging that Shorewood's directors violated than fiduciary duties. The proceedings, which were filed in Delaware Chancery Court, are an attempt to stop Shorewood from interfering with the tender offer. For more on this, read the

story by

TheStreet.com/NYTimes.com

joint newsroom.

The betting among analysts and others is that

PepsiCo

(PEP) - Get Report

will not make a bid for

Orangina

,

Pernod-Ricard's

orange-soda business, the Heard on the Street column in

The Wall Street Journal

said. Last week, the French government blocked Pepsi rival

Coca-Cola's

(KO) - Get Report

bid to buy Orangina. Pepsi will not discuss its plans, though a spokesman does not rule out the possibility of an offer, the column said. Shares of Pepsi rose 5/8 to 37 5/16, while Coca-Cola gained 3/4 to 68 3/16.

Pfizer

(PFE) - Get Report

slipped 0.5% to 35 13/16 following an announcement after yesterday's close that it will file by Christmas with the

Securities and Exchange Commission

to oust

Warner-Lambert's

(WLA)

board of directors. Pfizer also said its court date with Warner has been postponed until Jan. 31, but that it still wants the Warner antitakeover provisions lifted. Pfizer is trying to block Warner's proposed union with

American Home Products

(AHP)

. Shares of Warner-Lambert lost 3/8 to 88 3/4, while American Home Products slipped 9/16 to 50 9/16.

Republic New York

(RNB)

lost 1 1/16 to 70 3/8 on news that founder

Edmond Safra

was killed after hooded attackers armed with knives, broke into his Monaco apartment and set it on fire. Safra had just agreed to sell his interest in the

Republic National Bank

parent and another bank,

Safra Republic

, for $3 billion. The deal faced delays after a New Jersey money fund manager, who did business through Republic, sparked a probe at the bank after he was charged with scamming investors. In November, Safra agreed to accept $450 million less for his interest.

Softbank

, the Japanese investment company, has been in talks to buy a large stake in

Island ECN

, an electronic network for stock trading,

The New York Times

reported, citing people who have been briefed on the talks. The newspaper said Softbank has made a multimillion-dollar offer to buy the stake from

Datek Online Holdings

, which owns the fourth-largest online brokerage in the U.S. and about 85% of Island, however, the talks have broken down and it's cloudy as to whether or not a deal will occur.

Earnings/revenue reports and previews

Carmike Cinemas

(CKE)

lost 1 7/8, or 16.6%, to 9 7/16 after it said it expects to post a loss for the fourth quarter. The seven-analyst estimate sees the company reporting a 17-cent profit.

Cidco

(CDCO)

dropped 2 13/16, or 33.8%, to 5 1/2 after forecasting a fourth-quarter loss of 27 cents to 33 cents a share, greatly missing the single-analyst estimate of an 11-cent profit. The company blamed the disappointing estimates on softer-than-expected demand in the fourth quarter.

Rite Aid

(RAD) - Get Report

gained 7/16, or 5.6%, to 8 1/4 after it posted a 7.9% increase in November same-store sales.

Tandy

(TAN) - Get Report

rose 5/8 to 76 7/8 after it posted a 17% increase in November same-store sales.

Offerings and stock actions

Excite@Home

(ATHM) - Get Report

lost 13/16 to 52 1/16 after saying it plans to set a convertible subordinated note offering for roughly $400 million to fund its purchase of Internet greeting card company

Bluemountain.com

. In October, Excite@Home inked a $780 million cash and stock deal to buy Bluemountain.com.

Inktomi

(INKT)

jumped 17 9/16, or 13.8%, to 145 after saying its board approved a 2-for-1 stock split.

Potlatch

(PCH) - Get Report

rose 5/8 to 42 after it said it raised its current share buy back to 2 million shares.

Analyst actions

Bears Stearns

raised its price target on

Apple

(AAPL) - Get Report

to a range of 115 to 120 from 90 to 95. Shares of Apple tacked on 4 7/8 to 115 1/16.

Goldman Sachs

upgraded shares of

BEA Systems

(BEAS)

to recommended list from market outperform.

Credit Suisse First Boston

analyst Wendall Laidley upped his fiscal 2000 estimates to 38 cents a share from 35 cents and fiscal 2001 estimates to 63 cents a share from 52 cents. Shares of BEA soared 18 5/8, or 19.2%, to 115 3/4.

Dresdner Kleinwort Benson

cut its rating on

Caterpillar

(CAT) - Get Report

to add from buy, and sliced its price target to 63 from 75. Shares of Caterpillar hopped 5/8 to 48 1/8.

ABN Amro

rolled out coverage of

Countrywide Credit Industries

(CCR) - Get Report

with a buy rating and a price target of 45. Shares of Countrywide Credit Industries advanced 1 to 28 3/8.

Goldman Sachs rolled out coverage of

Eclipsys

(ECLP)

with a market perform rating. Eclipsys shares bounced 1 3/16 to 28 7/8.

Merrill Lynch

upgraded its long-term rating on

Florida Rock

(FRK)

to buy from accumulate. Shares of Florida Rock mounted 1 3/16 to 32 1/4.

Banc of America Securities

rolled out coverage of

IBM

(IBM) - Get Report

with a buy rating and a price target of 130. Banc of America also set a fiscal 2000 earnings estimate of $4.30 and fiscal 2001 at $5. IBM shares jumped 6, or 6.4%, to 112.

First Boston upgraded its price target on

Mips Tech

(MIPS)

to 78 from 60. Mips Tech leaped 6 1/8, or 10.9%, to 62 1/8.

Morgan Stanley Dean Witter

upped its rating on

99 Cents Only Stores

(NDN)

to strong buy from outperform. 99 Cents Only Stores gained 3 5/16, or 11.2%, to 32 13/16.

Donaldson Lufkin & Jenrette raised its price target on Nokia to 170 euros from 150 euros and repeated a top pick rating on the stock. Shares of Nokia soared 10 7/8, or 7.5%, to 155 1/2.

SoundView

raised its rating on

Silicon Storage

(SSTI) - Get Report

to strong buy from buy. Shares of Silicon Storage bounced 4 3/16, or 16%, to 30 1/2.

First Boston rolled out coverage of

Televisa

(TV) - Get Report

with a buy rating. Shares of Televisa added 2 to 52 7/16.

Deutsche Banc Alex. Brown

sliced its rating on

TJX

(TJX) - Get Report

to buy from strong buy. TJX shares slid 1 1/8, or 5.4%, to 19 1/2.

First Boston late yesterday upgraded shares of

StarTek

(SRT) - Get Report

to buy from hold. Shares of StarTek jumped 7 5/8, or 25.9%, to 37.

J.P. Morgan

initiated coverage of

TVAzteca

(TZA) - Get Report

with a buy rating. Shares of TVAzteca tacked on 1/2, or 8.4%, to 6 7/16.

Miscellany

Aetna

(AET)

bounced 1 13/16 to 59 9/16 after it said it is examining strategies to increase its share price, including issuing a tracking stock related to its international or financial services business, selling assets or spinning off units, the

Journal

reported.

The New York Stock Exchange said

Cablevision

(CVC)

would be listed on the Big Board beginning Tuesday. Cablevision edged up 2 to 74 5/16.

Meritor Automotive

(MRA)

mounted 1/8 to 18 after it said that it was given a $3.2 million tax credit with the state of Michigan, enabling the company to relocate it light vehicle roof system manufacturing unit to Detroit from Brighton, Mich. Meritor said it is set to begin construction on the facility next year.

The

Justice Department

said after yesterday's close that it has retained New York-based investment bank

Greenhill

to advise it on the financial implications of a full range of potential remedies in the landmark

Microsoft

(MSFT) - Get Report

antitrust case. A Justice Department official made it clear that retention of the firm reflects no view by the department on whether the case would be resolved in court or through mediation. Shares of Microsoft advanced 1 3/8 to 96 1/8.

The "Inside Wall Street" column in

Business Week

this week, penned by Gene Marcial, quotes

Donaldson Lufkin & Jenrette

analyst Peter Ruschmeier as saying that if

Louisiana-Pacific

(LPX) - Get Report

delays capacity expansion and instead buys back shares, the stock "can easily double." If the company doesn't do that, it's going to be tough for the shares to rally, "short of being acquired by a competitor,'' the column quotes Ruschmeier as saying. An unidentified money manager is quoted in the column as saying that a major paper concern "may make a pre-emptive bid, at around 23 a share" for beaten-up Louisiana-Pacific. The money manager also said that, based on fundamentals, Louisiana-Pacific is worth 18, according to the column. Louisiana-Pacific shares stumbled 5/8 to 13 5/8.

Elsewhere,

Cash Technologies

(CHNG) - Get Report

has attracted an ATM equipment maker to talk about the possibility of a merger, the column reported, citing an investor close to the company. The column also said a big financial-services concern was also interested in buying an equity stake in the company, citing a corporate insider. In Cash Technologies' most recent 10-Q filing with the SEC, Bruce Korman, the company's chairman and CEO, disclosed that the concern was in talks for either a merger or the sale of the company, the column reported. Cash Technologies gained 15/16, or 7%, to 14 1/4.

Finally, the column serves up a bullish item on

SBA Communications

(SBAC) - Get Report

. Shares of SBA popped 1 1/16, or 9.1%, to 12 15/16.