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Stocks Get No Satisfaction from Bonds' Early Rise & Close

Techs and transports are 'letting it bleed' in another session of worsening internals.
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While the bond market decided to closed up shop at 1 p.m. due to inclement weather, the

New York Stock Exchange

chose to be brave, announcing it will buy and sell until its usual 4 p.m. close today. But with major stock proxies all in the red as lunchtime beckoned on Wall Street, those long stocks might be wishing

Richard Grasso

& Co. reconsider and follow the lead of their fixed-income counterparts.

Halfway through the trading session major stock proxies were bleeding, although coming off their worst levels of the morning. The decline came despite a buying bent expressed by the early exiting bond traders. Another round of profit warnings from varied companies overshadowed the advancing bonds.


Dow Jones Industrial Average

was falling 106.07, or 1%, to 10,695.35, vs. its early low of 10,626.65. The broader

S&P 500

was off 8.23, or 0.6%, to 1309.74. The small-cap

Russell 2000

was down 6.48, or 1.5%, to 429.85.

The tech-laden

Nasdaq Composite

, was down 36.61, or 1.3%, to 2778.56 after trading as low as 2756.03, with bellwether names down in near unanimity. The

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Nasdaq 100

was off 0.9%.



was also putting the Comp in a bind after warning its third- and fourth-quarter earnings would be lower than expected. Quintiles was plummeting 17 1/16, or 49%, to 17 3/4. Internet Sector

index was down 15.47, or 2.5%, to 601.77.

"Tech is taking a pretty good hit today, said Bob Basel, director of listed trading at

Salomon Smith Barney

. "The market is better for sale right now."

Federal Express




was sinking the

Dow Jones Transportation Index

. Disappointing first-quarter earnings -- blamed on high fuel costs -- pushed the shares of FDX down 5 7/8, or 13.5%, to 37. The transports, already mired in a steep correction now approaching official bear market territory, were down 90.62, or 2.9%, to 2996.98. A close at this level would leave the index 20.8% below its all-time high of 3783.50, set May 12.



was selling up a storm, off 4 13/16, or 10%, to 42 3/16, after CFO Barry Romeril said at an

SG Cowen

technology conference that poor exchange rates in Brazil and Europe could dent its revenue growth.

On the Big Board, losers were flying past winners 2,102 to 744 while 475.5 million shares had been exchanged. On the

Nasdaq Stock Market

, laggards were beating gainers 2,430 to 1,138 on 616.8 million shares. New 52-week lows were topping new highs 167 to 11 on the Big Board and by 89 to 33 on the Nasdaq.

On a brighter note, the price of the benchmark 30-year Treasury closed up 12/32 to 100 22/32, its yield falling to 6.07%. The dollar was bouncing back vs. the yen amid reports in

Nihon Keizai Shimbun

Japan will ask U.S. and European monetary authorities to jointly intervene to curb the yen's recent steep rise. The dollar was lately quoted up 0.87 to 105.05 yen.

U.S. Industrial Production

rose 0.3% in August, down from 0.7% in July but above expectations for an unchanged reading. The results indicate a "firm industrial sector," according to Andrew Groat, economist at

Merrill Lynch

. However,

capacity utilization

at 79.8% below expectations of 80.5%. Capacity utilization is "sustaining at a remarkably low rate, Groat said. "Basically, corporate America has no pricing power."

Groat didn't think the

U.S. Initial Jobless Claims

report was damp, commenting that the 4,000 decline, "continues to indicate a healthy and robust labor market," but cautioned that, "it is the primary constraint in the economy as well as the primary concern for the Fed."

In other economic news, the

Labor Department

reported that 288,000 Americans filed first-time claims for unemployment benefits, for the week ended Sept. 11, down by 4,000 from the week before. Economists generally consider claim levels below 300,000 as an indication of an extremely tight labor market. (For more, see today's

Bond Focus .)

Thursday's Midday Watchlist

By Eileen Kinsella
Staff Reporter

The weather wasn't the only thing causing a foul mood on Wall Street today. Companies with negative earnings news were taking a blow. FDX was transported south via the express lane, down 5 7/8, or 13.5%, to 37 13/16, after it delivered negative earnings and outlook news. The company reported first-quarter results of 52 cents a share, 2 cents shy of the 11-analyst estimate of 54 cents, and above the year-ago 50 cents, hurt by higher fuel costs and lower-than-expected growth in domestic packages. The company warned that second-quarter and full-year results could fall below analyst expectations, and said fuel costs could hurt its 2000 operating income by as much as $150 million. FDX said it would institute cost-cutting measures to deal with lower growth rates and bolster productivity.



also lost a lot of cash, down 10 13/16, or 49.3%, to 11 3/16, after

Donaldson Lufkin & Jenrette

cut its recommendation to market perform from buy. Yesterday, Coinstar said it expects third-quarter earnings to fall below estimates.

Mergers, acquisitions and joint ventures



inched up 3/8 to 44 13/16 and

British Telecom


added 3 5/8 to 151 3/8 after the companies said they plan to form an alliance of their mobile phone operations. The alliance, called


, will have annual sales of $12 billion, but will not be formed as a separate company.

Freedom Securities


added 1/4 to 14 1/16 after it agreed to buy small stock dealer

Hill Thompson Magid

for $45 million in cash and stock. Freedom said the acquisition of the dealer in 8,000 small stocks will enable it to participate in the growth of small-cap trading.

General Electric


lost 7/16 to 115 9/16 after its subsidiary


said it would invest $415 million in

Paxson Communications


for a 32% stake, in an effort to extend its reach to U.S. households. Paxson slid 1 1/4, or 8.3%, to 13 13/16.



was unchanged at 24 3/16 after saying it would buy

Align-Rite International


for about $115 million in stock. Align-Rite moved up 4 1/2, or 30.8%, to 19 1/8.

Visual Networks


slipped 7/8 to 38 1/2 after it agreed to buy closely held

Inverse Network Technology

in a stock deal worth about $177 million.

Earnings/revenue reports and previews

American Greetings


added 5/16 to 25 15/16 despite posting a second-quarter loss of 39 cents including charges. The year-ago earning per share figure was 20 cents. The three-analyst estimate called for break-even results. No per share figures from operating income were provided in the most recent quarter.



shed 4 1/16, or 13.1%, to 27 1/16, despite reporting first-quarter earnings of 35 cents a share, in line with the 21-analyst estimate and up from 30 cents a year ago.



lost 3/4 to 40 1/16, even though it posted third-quarter earnings of 67 cents a share, better than the 23-analyst estimate of 64 cents a share, an up from 58 cents a year ago.

Circuit City


slipped 1/8 to 37 7/16 after posting second-quarter earnings of 36 cents a share from continuing operations, in line with the 14-analyst estimate, and up from 22 cents a year ago.

Eastman Chemical


fell 2 7/16, or 5.3%, to 43 7/8 after warning its third-quarter earnings would fall below the estimated 68 cents a share because of higher oil and natural gas costs, which hurt its bottom line.



climbed 1/2, or 5.4%, to 9 13/16, after reporting fourth-quarter earnings of 6 cents a share, a penny better than the three-analyst estimate of 5 cents, but lower than 24 cents a year ago.



lost 1 13/16, or 5.7%, to 30 3/8, after saying it expects a third-quarter loss of 3 cents to 5 cents a share, compared with the four-analyst earnings per share estimate of 3 cents.



climbed 1 1/16 to 31 1/4 after posting first-quarter earnings of 17 cents a share, a penny better than the nine-analyst estimate, and up from a year ago 13 cents.

PMI Group


slipped 1/4 to 39 15/16 despite saying it expects third-quarter and full-year earnings to top expectations as a result of strong volume in new insurance writing.


upgraded the stock to buy from attractive.



lost 5/8 to 33 3/8 after reporting first-quarter earnings of 20 cents a share before charges, ahead of the seven-analyst estimate of 17 cents and up from a year-ago loss of 9 cents.


American Home Products


rose 1 3/8 to 44 3/8 after

The Wall Street Journal

reported it may be near a $3 billion settlement to resolve injury claims by users of its diet drugs. The paper said an announcement on a deal could happen within days, but added that terms were sketchy, and the deal could still fall apart. PaineWebber raised the stock to attractive from neutral.



lost 1 3/8 to 70 11/16 after it reached a tentative agreement on a new contract with the

United Auto Workers

, which covers more than 70,000 workers. Meanwhile talks continued at a slower pace at

General Motors


,lately down 7/16 to 63 3/8, and

Ford Motor


, down 9/16 to 49 3/16, where the UAW has indefinitely extended contracts.