An early-morning hurricane hit the market hard, but lost some steam. By midsession the selling felt more like a tropical storm.
That didn't mean there wasn't some damage to sort through though. The
Dow Jones Industrial Average
was down 158, or 1.5%, to 10,129, after a more-than-200-point drop bounced it dangerously close to 10,000, a key psychological support level. The technology-laden
Nasdaq Composite Index
was down 56, or 2%, to 2751 after trading as low as 2704.28.
last night, on financial risk and risk-management models, stirred up some preopening clouds and wind. Then, at 8:30 a.m. EDT, a stronger-than-expected
Producer Price Index
report blew into town and whipped things into a squall. The September headline figure gained 1.1%, above the expected 0.5%, while the core rate, which excludes food and energy prices, rose 0.8%, compared with the expectation of 0.4%. It looked pretty bleak there for a while.
Not that anyone thinks stocks are out of the woods yet, but a bounce off the intraday low -- so far, anyway -- provided a little bit of relief. "It's just kind of settling down now," said Bill Schneider, head of U.S. equity block trading at
Warburg Dillon Read
. "The sellers had their feast and now you've got some buyers around kicking the tires."
Schneider said the morning volatility was further complicated by the monthly expiration of options, since many of the orders had accumulated on the buy side. Schneider said -- cautiously -- he believed the damage was done and that the worst was over for today.
Technology and financial stocks were hit particularly hard, though hardly any sector was spared the pain. The
Philadelphia Stock Exchange/KBW Bank Index
was off 2.7%, while the
American Stock Exchange Broker/Dealer Index
dropped 3.9%. Financial bellwether
was down 3.4%, and among the biggest losers on the
New York Stock Exchange
TheStreet.com Internet Sector
index was also hit, lately down 23, or 3.4%, to 673, dragged by
, two stocks that normally can't be bothered with this downturn nonsense.
was a rare bright -- uh, make that green -- spot in the tech sector, after last night beating earnings forecasts. Sun was rising 5%.
Asked whether today's sharp downturn was a sign of something ominous on the horizon, a few strategists and economists said they felt today's drop was simply part of a larger ongoing, and much-needed, correction but one that will eventually work itself out. "Coming into the third quarter, everyone expects 20% increases in earnings growth," said Dick Stein, chief technical analyst at
Noble Financial Group
in Boca Raton, Fla. "People are starting to realize they have been somewhat excessive. We need for it to go into a sidewards pattern and have multiples come back down."
John Eade, director of research at
, echoed the sentiment. "At 1250 on the
, we're still 30% to 35% ahead of fair value, particularly with bonds moving away," said Eade, who also said he could see the S&P 500 falling to 1150 in the next couple of months before resuming upward momentum.
"There is still a little more pain on the downside," said Stein. "We haven't seen a bottom yet."
Breadth was horrible on the Big Board, where decliners were trouncing advancers 2,280 to 639 on 513 million shares. On the
Nasdaq Stock Market
, laggards were beating leaders 2,785 to 878 on 630 million shares. New 52-week lows were beating new highs 386 to 5 on the NYSE, while on the Nasdaq, 177 new lows were ahead of 30 new highs.
The S&P 500 was down 22, or 1.7%, to 1262, while the small-cap
was off 5, or 1.2%, to 414.
The benchmark 30-year Treasury bond was up 3/32 to 97 14/32, its yield at 6.32%. (For more on the fixed-income market, see today's early
Friday's Midday Watchlist
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified
Sun Microsystems after yesterday's close
reported first-quarter earnings of 33 cents a share, beating the 19-analyst estimate of 31 cents and the year-ago 14 cents. Earlier today,
Banc of America Securities
upgraded the stock to buy from market perform, while
Credit Suisse First Boston
boosted their 2000 earnings estimates. Sun Microsystems was jumping 4 1/2, or 5%, to 94.
was slipping 15/16 to 38 1/8 after its energy-services division entered into a $1.5 billion total energy-management pact with
Simon Property Group's
Simon Brand Ventures
business initiative. Shares of Simon were skidding 5/16 to 22 1/8.
Mergers, acquisitions and joint ventures
was climbing 3/16 to 29 1/2 after saying it would ax its proposed $1.17 billion stock and cash merger agreement with
to accept a revised $1.18 billion offer from
. According to the deal between Phelps Dodge and Asarco, Phelps has five days to respond to Asarco's decision. Shares of Phelps were bouncing 1 1/8 to 58 3/8.
was adding 15/16, or 5.8%, to 17 after it announced it is buying privately held
, owner of
, for 1.8 million shares and $3 million in cash.
was mounting 2 9/16 to 69 1/2 after it said
bought an equity stake in the company. Intel bought the stake through a secondary offering of 3.6 million shares at $52.38 a share earlier in October. Intel was sinking 13/16 to 72 1/2.
Earnings/revenue reports and previews
was falling 3/8 to 55 5/16 after it posted third-quarter earnings of 61 cents a share, a penny ahead of the 20-analyst estimate but down from the year-ago 92 cents.
was declining 1/8 to 25 1/4 after it posted third-quarter funds from operations of 81 cents a share, in line with the 13-analyst estimate and up from the year-ago 73 cents.
was sliding 1 1/4, or 5.1%, to 22 3/4 after it reported third-quarter earnings of 9 cents a share, in line with the single-analyst estimate but below the year-ago 12 cents.
Diamond Offshore Drilling
was losing 1 1/4 to 31 5/8 after the company reported third-quarter earnings of 27 cents a share, a penny above the nine-analyst estimate and up from the year-ago 75 cents.
was falling 5/16 to 45 1/2 after it reported third-quarter earnings of $1.31 a share, above the 15-analyst estimate of $1.25 and up from $1.14 a year ago.
was declining 3/8 to 49 9/16 after it posted third-quarter earnings of $1.70 a share, in line with the 17-analyst estimate and up from $1.66 a year ago.
Fifth Third Bancorp
was stumbling 2 5/16 to 60 1/2 after it reported third-quarter earnings of 62 cents a share, in line with the 14-analyst estimate and up from a year-ago 53 cents.
was declining 11/16 to 14 9/16 after it posted third-quarter earnings of 31 cents a share, above the four-analyst estimate of 29 cents and better than a year-ago 20 cents.
was sliding 3/8 to 15 3/16 after it posted third-quarter earnings of 21 cents a share, in line with the three-analyst estimate and up from 15 cents a year ago.
was losing 3/4 to 57 1/2 after it posted third-quarter earnings of 78 cents a share, 4 cents ahead of the 13-analyst estimate and up from the year-ago 58 cents.
was plummeting 4 11/16, or 12.3%, to 33 5/16 after it posted second-quarter earnings of 47 cents a share, below the four-analyst estimate of 52 cents but up from 37 cents a year ago.
New Century Energies
was tumbling 1/4 to 31 3/4 after it reported third-quarter earnings of 85 cents a share, beating the 9-analyst estimate of 83 cents and the year-ago 82 cents.
was sliding 9/16 to 25 7/8 after it reported third-quarter earnings of $1.28 a share, beating the 10-analyst estimate of $1.24 and the year-ago $1.27.
was advancing 1 to 38 5/8 after it posted third-quarter earnings of 58 cents a share, above the single-analyst estimate of 45 cents and up from the year-ago 34 cents.
was slipping 7/16 to 18 1/4 after it reported third-quarter earnings of 44 cents a share, in line with the 12-analyst estimate and up from 36 cents a year ago.
was gaining 5/16 to 11 7/8 after it posted third-quarter earnings of 96 cents a share, missing the single-analyst estimate of $1.05 but above the year-ago 87 cents a share.
was losing 3/4 to 42 7/8 after
upgraded the stock to near-term accumulate from near-term neutral.
was falling 15/16, or 6.3%, to 13 3/4 after
Morgan Stanley Dean Witter
added it to its fresh-money buy list and removed
was climbing 1 5/8 to 74 5/16 after Credit Suisse First Boston raised its fiscal 2000 EPS to $1.90 from $1.80 and fiscal 2001 EPS to $2.65 from $2.50.
was leaping 5 1/4, or 10.2%, to 56 1/2 after Merrill Lynch raised its rating to long-term buy from accumulate. In addition, Warburg Dillon Read upped its price target on Microchip Technology to 70 from 65.
was declining 2 5/8 to 88 1/8 after Credit Suisse First Boston said the company was on target to post first-quarter earnings above the consensus estimate of 36 cents a share.
was soaring 8 1/8, or 15.8%, to 59 3/8 after Warburg Dillon Read upped its estimates 1999 estimate to 90 cents a share from 74 cents and fiscal 2000 estimates to $1.28 from $1.07.
was climbing 1 9/16, or 11.1%, to 15 9/16 after Morgan Stanley upped its shares to outperform from neutral.
was mounting 2, or 9.2%, to 23 5/8 after
added the stock to its recommended list.
was stumbling 2 1/2, or 18.6%, to 10 15/16 after
cut the stock to neutral from attractive. The company late yesterday warned of a third-quarter revenue shortfall.
Offerings and stock actions
was bouncing 6 7/8, or 7.9%, to 88 after it set a 3-for-2 stock split, payable on Nov. 19 to shareholders of record Nov. 2. Veritas posted third-quarter earnings after yesterday's close of 21 cents a share, beating the 20-analyst estimate of 17 cents and the year-ago 12 cents.
hadn't begun trading at midday. Morgan Stanley late yesterday priced the 3.75 million-share IPO at $10 a share, the high end of its recently lowered range. Morgan Stanley had said it expected to price the offering at the low end of the $8-to-$10 range, which had been reduced from $10 to $12.
American Home Products
was losing 1 3/16 to 45 3/8 after its
Wyeth Lederle Vaccines
unit pulled its
rotavirus vaccine from the market, based on its contribution to an intestinal disorder called intussusception.
was climbing 2 5/8, or 10.8%, to 26 3/4 despite getting hit with four separate class-action lawsuits from investors, alleging that they were misled by the company. The law firms representing the investors said that Raytheon hid information regarding its operation and finances.
The Heard on the Street column in
The Wall Street Journal
suspended money manager Jack Ferraro. It is conducting an internal investigation of payments he received from
and three small companies. In 1995, Ferraro lined up $7 million for Showscan through a Swiss bank, in return for warrants for 100,000 shares of Showscan, but did not disclose his payment to his clients or to Neuberger, the story says.