Stocks Stage Big Recovery in Volatile Trading Session

IPOs turned in a mixed performance, as Juno and Ziplink closed lower but StarMedia and DLJdirect finished in the black.

Author:: Brian Louis
Publish date:: May 26, 1999 4:28 PM EDT

With the exception of the

Russell 2000

, which closed barely in the black, major market barometers staged a handsome rally and began to repair the damage suffered over the past few sessions in another turbulent session.

Meanwhile, stocks making their trading debuts today were also prominent in the news as they handed in mixed performances.

The upside star was

StarMedia

(STRM:Nasdaq), which operates an online network across Latin America. It was up 11, or 73.3%, to 26 1/16.

On the downside,

Juno Online Services

(JWEB:Nasdaq) and

Ziplink

(ZIPL:Nasdaq) stumbled in their debuts. Juno was down 1 3/8, or 10.6%, to 11 5/8, while Ziplink fell 1 5/8, or 11.6%, to 12 3/8.

Elsewhere,

DLJdirect

(DIR:NYSE),

Donaldson Lufkin & Jenrette's

(DLJ)

online brokerage unit, was up 10 1/4, or 51.3%, to 30 1/4.

Overall, technology, Internet, banking, brokerage and oil service stocks turned in shining performances. Treasuries fell sharply.

Volatility was again the theme in today's trading. The session started out positively, with major proxies rising out of the gate. But the firmness in the gauges quickly decayed and sellers emerged to send them off their highs. The tech-stock-heavy

Nasdaq Composite Index

, which jumped to about the 2408 level out of the box, hit a wall of sellers shortly after the opening bell and soon found itself in negative territory. After a little more than an hour, the Comp hit its session low, bottoming at the 2339.12 level. In gradual, choppy fashion, the Comp clawed its way off its lows and eventually ended the session with solid gains.

Sector-wise, the

Philadelphia Stock Exchange/KBW Bank Index

jumped 3.7%; the

American Stock Exchange Broker/Dealer Index

surged 4.8%; while the

Philadelphia Stock Exchange Oil Service Index

gained 4.2%.

IBM

(IBM) - Get Report

was the big story in the blue-chip

Dow Jones Industrial Average

. IBM accounted for roughly 70 points of the Dow's gain on the day. It was up 15 7/16, or 7%, 236 5/8.

On the

New York Stock Exchange

, decliners beat advancers 1,461 to 1,483 on 873 million shares. On the

Nasdaq Stock Market

, losers beat winners 2,088 to 1,833 on 1.1 billion shares.

On the NYSE, 57 issues set new 52-week lows while 30 touched new highs. On the Nasdaq, 67 issues set new lows while new highs totaled 31.

On the Big Board,

America Online

(AOL)

was most active, with 40.4 million shares changing hands. It was up 5 1/8 to 120 1/8.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 49.2 million shares changing hands. It was unchanged at 34 9/16.

Market data above are preliminary. Updated numbers and analysis will follow in the Market Roundup

3:03 p.m.: IPOs Mixed in Volatile Market

Although most of the market's major gauges were higher heading into the final hour of trading, they recently lost steam.

Meanwhile, market breadth was negative, the 30-year Treasury bond was down sharply, and new issues were turning in a mixed performance.

The strongest performer in the newcomer department has been

StarMedia

(STRM:Nasdaq), which operates an online network across Latin America. It was up 12 5/8, or 84%, to 27 13/16.

On the downside,

Juno Online Services

(JWEB:Nasdaq) and

Ziplink

(ZIPL:Nasdaq) were weaker in their trading debuts. Juno was down 7/8, or 7%, to 12 1/8, while Ziplink fell 2 7/8, or 21%, to 11 1/8.

DLJdirect

(DIR:NYSE),

Donaldson Lufkin & Jenrette's

(DLJ)

online brokerage unit, was up 8 1/4, or 41%, to 28 1/4.

Some think the selling that has gripped the market in recent sessions may be coming to an end.

"I think the downside's pretty much washed out," said Paul Cherney, market analyst at

S&P MarketScope

. He said this morning's lows will probably hold over the next couple of weeks. Cherney, however, did add he thinks the market is likely to wobble for the next couple of days.

Cherney said that even if this morning's lows in the

Nasdaq Composite Index

weren't at the bottom of the recent move down, he doesn't see it falling much further. He noted that the market saw some sort of capitulation in the techs and Internet stocks today.

The Nasdaq Comp was enjoying solid progress on the upside today in an effort to break its four-session losing streak. Nasdaq heavyweights were mixed, with

Cisco

(CSCO) - Get Report

and

Microsoft

(MSFT) - Get Report

advancing, while

Intel

(INTC) - Get Report

and

Dell

(DELL) - Get Report

slipped.

On the

New York Stock Exchange

decliners were beating advancers 1,649 to 1,262 on 685 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,134 to 1,647 on 884 million shares.

On the NYSE, 55 issues had set new 52-week lows while 22 had touched new highs. On the Nasdaq, 65 issues had set new lows while new highs totaled 23.

On the Big Board,

America Online

(AOL)

was most active, with 34 million shares changing hands. It was down 1 9/16 to 116 9/16.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 42 million shares changing hands. It was flat at 34 9/16.

2:01 p.m.: Juno, Ziplink Debuts Continue to Be Bleak

Market newcomers were among the highlights of a turbulent session thus far, as stocks making their trading debuts on Wall Street were turning in mixed results.

The strongest performer has been

StarMedia

(STRM:Nasdaq), which operates an online network across Latin America. It was up 10 7/8, or 72%, to 25 7/8.

Meanwhile, traders were shunning newcomers

Juno Online Services

(JWEB:Nasdaq) and

Ziplink

(ZIPL:Nasdaq), which were down 10% and 26%, respectively.

Juno Online, a New York-based Internet service provider, was down 1 1/4 to 11 7/8.

TheStreet.com

wrote about Juno in a story

yesterday.

Ziplink, a wholesale Web service provider, fell as low as 11 before rising off that level. It was down 3 5/8 to 10 3/8.

DLJdirect

(DIR:NYSE),

Donaldson Lufkin & Jenrette's

(DLJ)

online brokerage unit, was up solidly in its debut. The stock was up 7 3/16, or 36%, to 27 3/16.

TheStreet.com

wrote about DLJdirect in a story

this morning.

barnesandnoble.com

(BNBN:Nasdaq), which embarked on its first day of trading yesterday, was up 2 7/8, or 13%, to 25 7/8.

The 30-year Treasury bond, which hasn't been much of a pal to the stock market lately, has slumped to its session lows in the wake of Treasury's $15 billion two-year note auction.

Meanwhile, although most of the market's major averages were solidly higher, market breadth was negative.

On the

New York Stock Exchange

decliners were beating advancers 1,634 to 1,230 on 573 million shares. On the

Nasdaq Stock Market

losers were beating winners 2,143 to 1,521 on 750 million shares.

On the NYSE, 51 issues had set new 52-week lows while 18 had touched new highs. On the Nasdaq, 61 issues had set new lows while new highs totaled 20.

On the Big Board,

America Online

(AOL)

was most active, with 30 million shares changing hands. It was up 1 to 116.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 36 million shares changing hands. It was down 7/16 to 34 1/16.

1:08 p.m.: Midday Musings: Rebound From Lows Has Wall Street in a Missouri Mood

12:01 p.m.: Juno, Ziplink Stumble in Their Trading Debuts

Major market averages were mixed heading into the lunch hour on Wall Street in a volatile session, while market newcomers

Juno Online Services

(JWEB:Nasdaq) and

Ziplink

(ZIPL:Nasdaq) both began trading today and thus far are suffering the same fate, slumping 6% and 20%, respectively.

New York-based Juno, an Internet service provider, priced yesterday at 13, was down 11/16 to 12 5/16. Its intraday high was a meager 13 3/16. It bottomed at 11 1/2.

Meanwhile, Ziplink was down 2 3/4 to 11 1/4. Ziplink offers wholesale Internet access services.

Elsewhere,

DLJdirect

(DIR:NYSE),

Donaldson Lufkin & Jenrette's

(DLJ)

online brokerage unit, was faring much better. It was up solidly -- but not dramatically -- rising 6 9/16, or 33%, to 26 9/16.

Internet stocks have endured some sharp swings today.

The Street.com Internet Sector

index has surged to approximately 567 and fallen to near 523, after closing yesterday at approximately 550.

Meanwhile, renewed interest in

IBM

(IBM) - Get Report

helped send the

Dow Jones Industrial Average

up solidly, as the gain in Big Blue accounted for 39 points of the Dow's advance. IBM was up 8 9/16 to 229 3/4.

The Dow's intraday high is 10,636.09.

The

Nasdaq Composite Index

opened solidly higher, peaking at nearly 2410 before encountering a wave of selling that knocked the tech-beefy index down to a session low of 2339.

On the

New York Stock Exchange

, decliners were beating advancers 1,472 to 1,222 on 393 million shares. On the

Nasdaq Stock Market

, losers were beating winners 2,031 to 1,384 on 546 million shares.

On the NYSE, 43 issues had set new 52-week lows while 11 had touched new highs. On the Nasdaq, 51 issues had set new lows while new highs totaled 41.

On the Big Board,

America Online

(AOL)

was most active, with 25 million shares changing hands. It was down 1 3/8 to 113 5/8.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 29 million shares changing hands. It was down 1 to 33 9/16.

11:02 a.m.: Stocks Turn Mixed in Volatile Trading

After popping at the open, stocks hit a wall of selling, which sent all of the major market barometers into the red. However, the

Dow Jones Industrial Average

and the

S&P 500

have since managed to inch into positive territory.

In trading debut news,

DLJdirect

(DIR:NYSE),

Donaldson Lufkin & Jenrette's

(DLJ)

online brokerage unit, was up 4 7/8, or 24%, to 24 7/8.

While DLJdirect wasn't particularly on fire, it was faring a boatload better than

Juno Online Services

(JWEB:Nasdaq), which recently started trading and was down 1 1/2, or 12%, to 11 5/8.

In the news,

Credit Suisse First Boston

cut the equity portion in its model portfolio by 5% to 55%, and raised the cash portion 5% to 15%. The bond portion of its model portfolio was unchanged at 30%.

Meanwhile, the Treasury market was slightly weaker.

Peter Boockvar, equity strategist at

Miller Tabak Hirsch

, noted that stocks weren't getting any help from the interest rate situation.

Boockvar said the stock market needs to see some capitulation volume-wise and the market hasn't experienced that yet.

On the

New York Stock Exchange

, decliners were beating advancers 1,387 to 1,091 on 246 million shares. On the

Nasdaq Stock Market

, losers were beating winners 1,943 to 1,147 on 365 million shares.

On the NYSE, 34 issues had set new 52-week lows while 8 had touched new highs. On the Nasdaq, 48 issues had set new lows while new highs totaled 9.

On the NYSE,

America Online

(AOL)

was most active, with 17 million shares changing hands. It was down 5 to 110.

On the Nasdaq,

Dell

(DELL) - Get Report

was most active, with 18 million shares changing hands. It was down 1 to 33 1/2.

10:02 a.m.: Stocks Rise After Recent Selloffs

Stocks were beginning to repair the damage of the last two

dreadful

sessions with an early broad-based advance.

Internet stocks were bouncing back to life despite talk from Internet analyst superstar Mary Meeker of

Morgan Stanley Dean Witter

, who said she sees 20% more downside in the Net sector and that the damage in the arena is not complete,

CNBC

reported.

The beaten-up tech sector, which has suffered the brunt of the recent selloff, was outpacing the rest of the market's major indices so far this morning.