SAN FRANCISCO -- Proving (again) every dip is a buying opportunity, the
Nasdaq Composite Index
established yet another new high after experiencing a
reversal of fortune even
would find dizzying. Conversely, blue-chip averages surrendered potential record-setting gains despite the bond market's recovery from initial signs of further distress.
The Comp rose as high as high as 4001.90 in the opening moments of trading, but its momentum evaporated quickly. The tech-stoked index spent most of the session solidly below break-even, trading as low as 3902.35 at midday. But the proxy rallied steadily thereafter until about 3:30 p.m. EST before closing up 5.94, or 0.2%, to a record 3975.38. The
, once as low as 3521.85, closed up 0.2% to a record 3598.51.
The market: Join the discussion on
"It looked like they needed a breather, but they still managed to rally 'em late in the day," one dumbfounded trader said of the tech sector's apparent inability to go down and stay down.
Best reflecting the tech sector's session was
, which closed up 3% at 415 after trading as low as 377 7/8.
also produced a remarkable recovery from session lows, helping
TheStreet.com Internet Sector
rise 0.48 to 1129.00 after trading as low as 1085.37.
A downgrade of
was cited as one factor in the DOT's struggles. With eToys closing down 16.2%, other e-tailing stocks followed suit; notably,
Red Hots index was unfettered, closing up 56.73, or 15.5%, to 423.96. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money. (You can check quotes on the Red Hots index and its component stocks at
http://www.thestreet.com/redhots. And you can help
to revamp and rename the Red Hots by
placing your vote on the site.)
The Red Hot index got its boost from
. Elsewhere in the too-hot-to-handle B2B space,
Among blue-chip gauges, the
Dow Jones Industrial Average
closed off 14.68, or 0.1%, to 11,391.08 after trading as high 11,475.18. The
closed down 1.25, or 0.1%, to 1457.09 after trading as high as 1463.19.
Weakness in blue-chip tech stocks such as
restrained the averages, but strength in recently forgotten sectors such as transports, financials and cyclicals -- along with retailers -- prevented wider declines.
Dow gainers included
joined H-P at the top of the laggard board.
rose 2.03, or 0.4%, to 484.46 even as breadth weakened from
Thursday's positive showing.
Proving the old adage that thin markets make for volatile trading, major averages waffled dramatically during the final 30 minutes of the session. Some of the late-day gyrations were attributed to index players mimicking changes made to various
Standard & Poor's
indices. For example,
rose 10.3% amid a volume spike at the close. Nortel is being switched from a value stock to growth in S&P's universe,
But Bob Basel, director of listed trading at
Salomon Smith Barney
, downplayed the impact of S&P index rebalancing.
"There was bigger volume than you would have normally thought on a day like today at the close, but 30-40
Dow points is not the end of the world," he said.
Asked if the afternoon surge by tech stocks siphoned interest from blue-chips, Basel said that was an over-analysis of what he called a "nothing" session.
"Take away the volume at the close" and Big Board volume would have been in the high 600 million range, he said. "Nothing really happened here today. It's a sign the whole week is going to be slow."
New York Stock Exchange
trading, 724.2 million shares were exchanged while declining stocks led advancers 1,781 to 1,320. In
Nasdaq Stock Market
action, 1.2 billion shares traded while losers led 2,456 to 1,765. New 52-week lows whipped new highs 311 to 89 on the Big Board while new highs led 216 to 162 in over-the-counter trading.
Bull Remains So
Although few players were lamenting today's action, the growing consensus is selling will greet the market (especially the tech sector) when the New Year begins. But Thomas Galvin, chief investment officer at
Donaldson Lufkin & Jenrette
, remains convinced a "millennium melt-up" is in the offing once Y2K disruptions (both real and prompted by fear) are past.
"As we have seen during the past two years, emotion can temporarily overrule objectivity and analysis, but eventually ongoing fundamentals win out," Galvin wrote in his 2000 outlook, published today. "Once the coast is clear and media hype moves on to another story, anxiety will calm and cash will re-enter the market."
The strategist forecast the Dow will hit 12,000 by March and reach 13,000 by year-end. For the same timeframes, he foresees the S&P 500 at 1580 and 1680, respectively.
Galvin, who did not provide a forecast for the Nasdaq, based his continued bullishness on a belief the global economy is in "the early stages of a multi-year cyclical profit recovery."
At the same time, he predicts excess production capacity, the Internet, and even the advent of the euro will conspire to restrain manufacturers' pricing power and, thus, inflation.
"The winners will be high unit growers that offset higher costs through strong productivity," Galvin wrote, selecting technology, telecom and health care as sectors with the best prospects.
The 30-year Treasury bond rose 9/32 to 95 16/32, its yield easing to 6.47%.
Among other indices,
Dow Jones Transportation Average
rose 39.98, or 1.4%, to 2927.68; the
Dow Jones Utility Average
gained 1.35, or 0.5%, to 282.56; and the
American Stock Exchange Composite Index
fell 2.89, or 0.3%, to 843.48.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
gained 85.69 to a record 8452.93 and the
Mexican Stock Exchange IPC Index
mounted 60.62 to a record 6986.38.
Monday's Company Report
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.
Mergers, acquisitions and joint ventures
slipped 15/16 to 38 5/16 after it said its board had turned down
International Specialty Products'
$45-a-share offer made Dec. 14. Dexter said that the bid was too low and not in shareholders' best interest. Shares of International Specialty added 7/16, or 5.8%, to 7 7/8.
bounded 2 7/16, or 54.9%, to 6 7/8 after it said it has licensed rights to its experimental panic disorder drug
. The deal calls for Warner-Lambert to pay Interneuron $73.75 million upfront and manage all further testing, production and marketing for the drug. Shares of Warner-Lambert edged up 15/16 to 86 1/16.
hopped 1, or 7.2%, to 14 7/8 after it said it plans to sell its plastics and coating division to a newly established
Royal Bank Equity Partners Limited
affiliate, in a deal valued between $89 million and $94 million. The company would use the funds from the sale to trim the balance at Noble's revolving credit facility. Noble said it also has hired J.P. Morgan to explore options to boost shareholder value.
mounted 2 1/4, or 7.9%, to 30 5/8 after it said it has entered a $217.5 million deal to acquire all of the assets of
High Performance Plastics
. Shares of Uniroyal Technology popped 3 5/16, or 16.8%, to 23 1/4.
Earnings/revenue reports and previews
Burlington Coat Factory Warehouse
climbed 7/8, or 7.2%, to 13 after it reported record breaking Christmas-week sales of more than $100 million. Last year, the company posted sales of $89 million for the same period.
tacked on 1/8 to 11 11/16 after it said income from
, in which it has a 41% interest, will be sliced by $39 million in the fourth quarter as a result of a $95 million, pretax charge taken by Equistar.
each have a 29.5% interest in Equistar. Shares of Millennium Chemicals advanced 9/16 to 19 1/8, while Occidental Petroleum slid 5/16 to 21 5/16.
Robertson Stephens started coverage of
with a buy rating. Shares of Digimarc retreated 2 15/16 to 59 3/8.
Robertson Stephens lowered its rating on eToys to long-term attractive from buy. Shares of eToys fell 5, 16.1%, to 25 15/16.
Hambrect & Quist
to its buy focus list. Shares of Home Depot bounced 11/16 to 97 13/16.
SoundView Technology Group
said it believes
has a "few serious suitors" after
bowed out. SoundView is maintaining its speculative buyer position on the stock and its price target of 30. Shares of Newbridge Networks lifted 2 3/4, or 12.7%, to 24 1/4.
Credit Suisse First Boston
initiated coverage of
with a strong buy rating. Shares of Retek shot up 30, or 55%, to 85.
Morgan Stanley Dean Witter
upped its rating on
to outperform from neutral and set a price target of 57. Shares of Seagate rose 1 13/16 to 48 7/16.
sliced its fiscal 2000 earnings estimate for
to $3.28 a share from $3.43. Shares of Zions stumbled 6 7/16, or 9.6%, to 60 5/16.
Thursday began a legal challenge to the
Federal Communications Commission's
to offer long-distance phone service in New York. Shares of AT&T fell 2 to 50 5/8, while Bell Atlantic skidded 3 7/16, or 5.3%, to 60 1/2.
retreated 600 to 53400 after it said Warren Buffett donated 2,500 Class-A shares to charity.
The New York Stock Exchange said
has refused to comment on the recent bounce in its stock. Its shares finished up 3 5/8, or 15.8%, to 26 7/16.
is preparing to launch a Web site called
, which will match up buyers and sellers of goods,
The Wall Street Journal
reported. Shares of priceline.com fell 3/4 to 54 3/8.
Prison Realty Trust's
board said an investor group will purchase $315 million in securities and commit to purchase an additional $35 million in securities in a newly formed company that would be created via the merger of Prison Realty and the companies operating under the name
Corrections Corp. of America
. Shares of Prison Realty slipped 1/2, or 8.7%, to 5 1/4.
covered the Prison Realty news in a