It's nice to see a day where stocks at midday are pretty much moving in the same direction as they did in first half hour of trading.
No dizzying decline after a run-up on the open. No head-snapping rebound after an early-morning plunge. Just a day where stocks were pretty strong on the open, and were still pretty strong once lunchtime rolled around.
Technology issues were again the focus of the market, driven higher by
announcement that it will buy
split announcement. Though the Yahoo! deal was the headline grabber, traders pointed to the Intel news as the real force behind today's tech strength. "I don't know what kind of day today would have been if Intel hadn't announced a 2-for-1," said one tech trader.
Nasdaq Composite Index
was up 53, or 2.2%, to 2461. The more staid
Dow Jones Industrial Average
was up a healthy 83, or 0.9%, to 9283, and the
was up 19, or 1.5% to 1262. The
was up 3 to 424.
After powering forward at the open, Internet stocks saw a brief dip that coincided nicely with some comments from
on how the stocks were similar to a lottery. The payoff in a lottery, if you pick the right numbers, is huge, but the odds don't justify the risk. This does not keep people from playing, nor, the chairman suggested, does it keep people from buying Internet issues.
"The size of that potential market is so huge that you have these pie-in-the-sky type of potentials for a lot of different vehicles," said Big Al. "Undoubtedly, some of these small companies whose stock prices are going through the roof will succeed and they very well may justify even higher prices. The vast majority are almost sure to fail. That is the way the markets tend to work in this regard."
Yet after their morning dip, Net stocks soon recovered and went higher. Which led some to wonder if the Greenspan's comments had anything to do with anything. Correlation: yes. Causation: maybe not. "The people who play these stocks probably weren't the ones who would be listening to Greenspan," said the tech trader. Spoken like a guy who's getting tired of his dentist brother-in-law talking about the 10-bagger he got in
TheStreet.com Internet Sector Index
lately was up 15, or 2.8%, to 549.
But despite stocks' consistent strength today, some still think that the market will remain mired in the same kind of volatile trading we've seen recently.
"In the last couple of weeks, we haven't made a lot of headway, but we've been real choppy," said Gail Dudack, equity market strategist at
Warburg Dillon Read
Dudack thinks that the market will probably get even rockier. "The core leadership has been Internet stocks, but they have already discounted a lot of potential good news," she pointed out. "I don't know if the peaks have been seen, but I think the best is behind them. As they get more choppy, so will the market."
Greg Nie, chief technical analyst at
in Chicago, also expects to see some more turbulence in the market, though he believes stocks could be preparing to make a run higher sometime in the beginning of next month.
"It looks like more of a timeout than anything else," he said. "That's probably going to carry on a little longer -- certainly into next week. We are very gradually moving into some kind of oversold condition to create some kind of oversold condition."
How well that second rally lasts will depend largely on the market's advance/decline line improving. "We need big breadth and big volume, in that order," he said. "That will be the benchmark to see how far we carry."
For today, both breadth and volume look pretty good. On the
New York Stock Exchange
, advancers were beating decliners 1,692 to 1,191, with 446 million shares changing hands. In
Nasdaq Stock Market
action, advancers were topping decliners 1,967 to 1,658 on 554 million shares.
Over in the Treasury market, the 30-year was up 9/32 to 102 5/32, dropping the yield to 5.11%, but shorter-term bonds were flat. (For more on the fixed-income market, see today's early
Thursday's Midday Movers
As noted above, GeoCities was flying 37, or 50%, to 111 5/8 after Yahoo! confirmed it will buy the company in a stock deal valued at $3.56 billion. Yahoo!, which was up 12 1/4 to 347 7/8, will issue 0.34 of a share for each share of GeoCities. The deal is expected to close in the second quarter.
Intel was up 4 to 136 3/4 after stepping into the conga line and agreeing to split its stock 2-for-1.
In other news:
was up 2 3/4 to 58 1/2 after
Salomon Smith Barney
upgraded it to buy from neutral.
was up 1 1/16 to 91 13/16 after posting fourth-quarter earnings of 51 cents a share, in line with the 27-analyst estimate and up from the year-ago 41 cents. The pharmaceutical giant also set a $1 billion stock-buyback plan.
Swedish telecom company
was up 1 9/16, or 6.2%, to 26 13/16 after the ahead-of-schedule presentation of its new mobile phone model, T28. The company also posted full-year results.
was up 1 3/16 to 61 1/2 after saying it will buy Sweden's
in a cash-and-debt deal valued at $6.45 billion. The combination has been rumored for weeks. Volvo was down 1/4 to 27.
was up 15/16 to 52 1/16 after confirming it will buy
for $7 billion. LucasVarity was up 1 5/16 to 48.
also had made a bid for LucasVarity which was rebuffed.
AOL was up 8 to 173 1/2 after
last night reporting second-quarter earnings of 17 cents a share, 3 cents better than the 31-analyst estimate and up from the year-ago 4 cents. The company also set a 2-for-1 stock split. AOL said it now has 15.1 million worldwide members, or 17 million including
was down 1 3/8, or 29.7%, to 3 3/8 after last night saying it sees a fourth-quarter loss due to costs related to a canceled secondary offering, lower-than-expected unit shipments and more than $3 million worth of customer returns. The single-analyst estimate called for earnings of 2 cents a share vs. the year-ago 7 cents.
was down 3 3/8, or 7.4%, to 42 1/8 after last night missing fourth-quarter earnings of 8 cents a share, in line with forecasts.
Crompton & Knowles
was up 1, or 6%, to 17 3/4 after last night reporting fourth-quarter earnings a penny a share ahead of expectations.
was down 4 7/8, or 14.3%, to 29 after
Morgan Stanley Dean Witter
slashed it to outperform from strong buy. Last night, the company beat fourth-quarter earnings by 1 cent a share.
was up 7 5/8, or 8.9%, to 93 11/16 after last night reporting a fourth-quarter loss of $1 a share, in line with the seven-analyst outlook and up from the year-ago loss of $5.91. The company set a 2-for-1 stock split.
was down 1 1/2, or 11.3%, to 11 7/8 despite last night topping fourth-quarter earnings by 3 cents a share.
was down 1 3/16, or 10%, to 10 13/16 even after last night reporting first-quarter earnings 1 cent a share above estimates.
New Era of Networks
was up 8 3/8, or 15.4%, to 62 7/8 after last night beating fourth-quarter earnings estimates by 7 cents a share. Today,
Credit Suisse First Boston
raised the stock to strong buy from buy and upped its price target for the stock to 70 from 53.
was down 1 7/8, or 12.9%, to 12 3/4 even after last night topping fourth-quarter estimates by a penny a share.
In other earnings news: