SAN FRANCISCO -- (Read in the voice of
): Stocks and bonds answered the opening bell in fine form this morning after the
provided more evidence inflation -- that peril of financial assets -- remains subdued. But -- THERE! RIGHT THERE! -- a right hook from
European Central Bank
put bonds on their backside. The 30-year Treasury bond avoided an ignominious defeat but ended with a virtual draw, down 1/32 with its yield unchanged at 5.92%.
The stock market got its knees buckled by the blow but stayed upright through that opening round. Then, in a display of pugilistic prowess unmatched in the annals of history (or at least since
Friday) the market regained its form as bonds climbed off the canvas, punching its way out of trouble to retain the championship belt, despite giving away some later rounds. The
Nasdaq Composite Index
-- look at that little Nasdaq go! -- and the
each scored records. The
Dow Jones Industrial Average
closed modestly higher but a new high for the blue-chip gauge was not to be, as they say.
(Read in whatever voice you choose): Tech plays such as
aided market proxies.
Although many of its best-known bellwethers finished lower -- notably
-- the Nasdaq Comp rose 21.24, or 0.8%, to 2839.37. The tech-braised index notched its eighth record in 11 trading days.
"I think the environment for tech is getting better," said Lou Mazzucchelli, an analyst at
Gerard Klauer Mattison
. "You're seeing strong continued PC demand, Intel is talking about good demand, DRAM prices are firming up, Motorola had a good report for other semis. We had scare when Taiwan and the Chinese started yelling at each other, but outside those kind of macro events we're in pretty good shape. It's a healthy environment."
The Comp was aided by second-tier names such as
, up 17.8% after posting better-than-expected profits
last night. Similarly
rose 26.8% after beating consensus and receiving an upgrade from
In addition to techs, the S&P 500 was fueled by a decent advance by financials and energy stocks. The
Philadelphia Stock Exchange/KBW Bank Index
American Stock Exchange Broker/Dealer Index
each rose more than 1%, as did the
American Stock Exchange Oil & Gas Index
. The S&P 500 closed up 11.45, or 0.8%, to 1409.62, establishing a new high in the process.
The Dow industrials rose as high as 11,217.76 then fell within single-digits of breakeven in the final hour of the session before rebounding toward the close. The index ended up 38.31, or 0.3%, to 11,186.41.
H-P was far and away the Dow's best performer, rising 4.2%, while
also aided the proxy. Coke rose 3.4% despite posting earnings down sharply from last year and merely in line with expectations as the company gave guidance the worst was has passed.
Broad market participation was evident as the
gained 4.34, or 0.9%, to 465.80, a 52-week high although well shy of its all-time best of 491.41, set April 21, 1998. Meanwhile, the
American Stock Exchange Composite Index
gained 8.73, or 1.1%, to a record 821.73 while the
Value Line New Arithmetic Index
rose 7.20, or 0.7%, to an all-time best 1066.61.
The big disappointment of the session was Internet stocks (save Amazon.com).
TheStreet.com Internet Sector
index fell 7.49, or 1.1%, to 649.71.
shed 9.5% as takeover rumors faded (for one day, at least). Meanwhile,
shed 3.4% -- despite posting a loss last night a penny narrower than expectations -- and
Can You Confirm?
New York Stock Exchange
trading, 805.2 million shares were exchanged while advancers led declining stocks 1,827 to 1,053. In
Nasdaq Stock Market
action 1.12 billion shares traded while gainers led 2,267 to 1,715. New 52-week highs bested new lows 131 to 33 on the Big Board and by 215 to 33 in over-the-counter trading.
"In the past few years when we've punched to new highs, volume confirms," said Steven Goldman, market strategist at
in Greenwich, Conn. "We're not seeing a new peak in volume here. I question the
stock market's potential from here given the valuations and possibility that bonds may not be starting a sustainable trend higher."
Like many, Goldman expressed concern the bond market failed to rally substantially despite benign economic news for a second straight day.
"The bond market is feeling we're still showing continued
economic strength. Stock prices lead the charge higher, boosting consumer confidence which will lead to spending, which will curtail the bond market," he said. "It's not happening today, but continued strength will lead to higher interest rates which could cause concern for stock prices."
The strategist said it is "premature" for the stock market to share bonds' concerns, clearing the way for today's gains. But "within another week or two, trading will turn choppy as we await the next
meeting," he said. "With further data due out and lingering concerns, stocks are priced more or less for perfection."
Among other indices, the
Dow Jones Transportation Average
fell 24.48, or 0.7%, to 3397.03, weighed down by
, which fell 7.8% after unveiling its second profit warning in as many months. Elsewhere, the
Dow Jones Utility Average
rose 0.21, or 0.1%, to 320.57.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
rose 39.62 to 7292.70 and the
Mexican Stock Exchange IPC Index
hopped up 41.08 to 5875.97.
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.
Coca-Cola popped up 2 1/8 to 64 after reporting second-quarter earnings of 38 cents a share, in line with the 16-analyst estimate but down from the year-ago 48 cents. The year-ago period includes a gain of 3 cents related to the sale of the company's bottling operations in northern and central Italy, and a provision of 2 cents a share from the impairment of certain assets in the global manufacturing system.
On the flip side, US Airways shed 3 7/16, or 7.8%, to 40 7/8 after saying it won't meet earnings estimates for the second half of the year. The airline was expected to earn $1.66 a share in the third quarter and $1.62 in the fourth quarter. The carrier said its results have been hurt by recent revenue trends, and higher labor and fuel costs.
Mergers, acquisitions and joint ventures
collapsed 2 5/16, or 58.7%, to an all-time low of 1 5/8 after last night saying it ended merger talks with
, a unit of
General Motors Acceptance
slammed down 2 17/32, or 22.3%, to 8 7/8 even after
agreed to buy it for $64 million. Lucent rose 2 5/8 to an all-time high of 77 5/8.
swelled 2 7/32, or 34.8%, to 8 19/32 after
agreed to buy the company for $9 a share in cash. Compuware picked up 1/2 to 35.
Earnings/revenue reports and previews
Adhering to the sell-the-news trend this earnings season, Apple sliced off 2 1/2 to 53 1/4 after last night posting second-quarter earnings of 69 cents a share, beating the 19-analyst estimate by a nickel and moving up from the year-ago 65 cents. The Mac maker, whose shares ran up ahead of the announcement, also said it will buy back $500 million in stock.
Avis Rent A Car
revved up 1 11/16, or 5.9%, to 30 1/8 after last night topping second-quarter earnings estimates by a dime with a profit of 85 cents.
added 1 13/16 to 50 13/16 after posting second-quarter earnings of 83 cents a share, including a gain for the sale of a minority stake in Partners First and a valuation writedown for noninterest income related Partners. The 19-analyst view called for earnings of 77 cents vs. the year-ago 80 cents.
skidded 6 1/8, or 19.6%, to 25 1/16 after last night posting second-quarter earnings in line with the estimate of 22 cents a share. Today, Merrill Lynch lowered the stock to near-term neutral from accumulate, maintaining a long-term buy.
declined 3 5/16, or 11.7%, to an annual low of 24 15/16 after last night saying it sees second-quarter earnings of 78 cents to 88 cents a share due to a shift in revenue mix to the company's lower-margin agency business. The two-analyst view called for $1.27 vs. the year-ago $1.47. Today,
Donaldson Lufkin & Jenrette
lowered the stock to market perform from buy.
rose 3/8 to 31 3/8 despite last night restating earnings from continuing operations for the last there years. It cut earnings for fiscal 1999 by $152.2 million, or 53 cents a share; for 1998, the company lowered earnings by $25.8 million, or 9 cents a share; for 1997, it lowered earnings by $13.5 million, or 5 cents a share. McKesson lowered its revenue for the past three fiscal years by a total of $327.4 million. Today,
Banc of America Securities
cut the stock to hold from buy.
Rambus jumped 17 5/16, or 17.8%, to an all-time high of 115 1/4 after last night reporting third-quarter earnings of 8 cents a share, 2 cents higher than expected. Today,
Hambrecht & Quist
lifted the stock to buy from market perform.
shed 3 15/16, or 9.9%, to 36 even after last night topping first-quarter earnings estimates by a penny, logging a profit of 16 cents a share.
SanDisk vaulted 14 9/16, or 26.8%, to an all-time high of 69 after last night beating second-quarter earnings forecasts of 15 cents by 4 cents a share. Today, Merrill Lynch raised the stock to long-term buy from accumulate.
In other earnings news:
Offerings and stock actions
rocketed up 36 1/8, or 240.8%, to 51 1/8 after last night
Credit Suisse First Boston
priced its 4 million-share IPO top-range at $15. The company is a high-speed DSL equipment developer based in Dallas.
grew 3 1/2, or 7.2%, to 52 1/8 after Morgan Stanley Dean Witter raised it to outperform from neutral with a 12-month price target of 64.
tacked on 2 5/16 to 50 1/4 after Credit Suisse First Boston started coverage with a strong buy and a price target of 71.
added 1 1/4 to 53 after Credit Suisse First Boston started coverage with a buy and a price target of 65.
expanded 3 to an all-time high of 121 1/2 after saying it plans to divest around $10 billion of assets over the next three years. The company also announce a "significant" crude oil discovery in deep water offshore Angola.
fizzled down 1/8 to 44 3/8 after New York City filed a $3 million suit against the utility, charging that the company should have prevented a blackout during a heat wave earlier this month. The 19-hour blackout started July 6 and left more than 200,000 New Yorkers in the dark.
advanced 1 to 28 5/16 after confirming a
Wall Street Journal
report saying the company developed a single PC chip that integrates most semiconductor content and functions. The company said the chip, called GeodeSC1400, provides online, digital video and browsing functions for the set-top box market.
chopped off 1 7/16 to 75 7/8 after the co-heads of the company's
Warner Music Group
, Robert Daly and Terry Semel, said they will leave at the end of the year when their contracts expire.
stormed up 4 5/16, or 30.4%, to 18 1/2 after last night saying it hired
Morgan Stanley Dean Witter
to explore strategic alternatives. The company said its majority shareholder,
, is refocusing its strategy on companies which operate totally on the Internet.