Bulls were lying low at midday as the market continued its late regression.
All the proxies were solidly negative. The
Dow Jones Industrial Average
was off 136, or 1.3%, to 10,168; the tech-enfeebled
Nasdaq Composite Index
was down 45, or 1.6%, to 2717; and the
was receding 16, or 1.3%, to 1267.
TheStreet.com Internet Sector
index was sinking 15, or 2.4%, to 614, while the small-cap
was 6 lower to 416.
"We've broken some support levels, and that's significant in itself," said Jim Herrick, managing director of trading at
Robert W. Baird
in Milwaukee. "But the bottom line is that investors aren't focusing on earnings."
Earnings are still looking sweet for the most part. Analysts' third-quarter estimates are calling for growth of just under 20% from last year, according to Chuck Hill, director of research at
First Call/Thomson Financial
, for one, didn't disappoint last night, posting strong upside third-quarter numbers.
But with the market still distracted by fears over currency fluctuations, interest rates and inflation, next month's earnings just don't seem a good enough reason not to sell yesterday's strength today.
At least a tiny part of the market's fears over inflation is coming from the recent developments in the gold market, Herrick suggested. Gold was surging for the second straight day in response to the five-year cap on gold sales announced yesterday by 15 European central banks. That increasingly precious metal was lately trading above $305 an ounce, a level it hasn't seen since May of last year.
Now, gold's utility as an inflation barometer isn't what it once was. But Herrick isn't ready to discount it entirely as a factor in market psychology. "Everyone says that gold isn't an inflation hedge," he said. "But the market can't ignore it."
Gold strength was taking the
Philadelphia Stock Exchange Gold & Silver Index
up about 4.6%.
In other sector news, technology was moving lower almost unilaterally, led by the boxmakers. The
Philadelphia Stock Exchange Computer Box Maker Index
was lately down about 2.3%. Long suffering financial stocks were mixed in the wake of
Hambrecht & Quist
, with the
Philadelphia Stock Exchange/KBW Bank Index
Stocks were getting no support from bonds, which were selling off for the second straight day. The 30-year Treasury was lately off 24/32 to 100 26/32, its yield rising to 6.07%.
The greenback was lately quoted at 105.9 yen.
Volume was moderate. On the
New York Stock Exchange
, 497 million shares had traded, while 598 million shares changed hands on the
Nasdaq Stock Market
After yesterday's decent showing, breadth had reverted to the horrible state we've come to expect lately. Advancers were trailing decliners 851 to 2,003 on the NYSE, where there were 31 new 52-week highs against 209 new lows. In Nasdaq action, decliners were beating advancers 2,400 to 1,186, with 32 new highs and 101 new lows.
Tuesday's Midday Watchlist
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
Chase was off 7/8 to 73 1/4 after it said that it would acquire Hambrecht & Quist, soaring 7 3/4, or 18.8%, to 48 13/16, for roughly $1.35 billion in cash, in an effort to boost its investment banking business. The transaction calls for Chase to pay $50 per share, a 22% premium, for H&Q. Last year, Chase held negotiations with
, but they never came to terms. Chase said it would set a $200 million retention pool to keep key members of Hambrecht & Quist's staff.
are expected to announce a deal that would increase competition for registering new Internet addresses. Network Solutions was in talks for a year before it said it would permit rival firms to register new Web site names in its 5 million-address database, which includes names ending in .com, .org and .net. To register their customers, rivals will have to pay a $6 per name each year, a discount to Network Solutions registration charge of $35. The deal calls for Network Solutions to manage its database for at least four more years. Shares of Network Solutions were leaping 7 1/2, or 10.3%, to 80 1/8.
Securities and Exchange Commission
announced that it has filed 30 enforcement actions charging 68 individuals and entities with fraud and/or abuses of the financial reporting system. The agency said the charges represent a "veritable cookbook of recipes for fraudulent accounting and reporting." Among those charged is former
, who allegedly "helped direct a multimillion-dollar financial fraud that resulted in overstatements of net income exceeding 200%" as head of software and consulting company
. The Hall of Famer agreed to pay a total of $154,187 in penalties, without admitting or denying the charges.
Mergers, acquisitions and joint ventures
was advancing 7/8 to 102 1/8 after it said it has entered a content agreement with
. Shares of MarketWatch.com were climbing 1 5/8 to 47.
said it sold 182,492 shares in AOL, realizing $18.3 million.
was slipping 15/16 to 29 3/4 after it signed a $770 million deal with Algerian state-owned oil and gas firm
to quadruple production from an Algerian oilfield.
amended their merger agreement to permit each company to explore all strategic alternatives. Asarco was unchanged at 26 15/16, while Cyprus shares were sliding 1/8 to 19 7/16.
is expected to announce an equipment purchase from merger partners
that could be valued at up to $1 billion, the
said. The paper said AT&T plans to buy up to 2 million more cable TV set-top boxes from General Instrument and 1 million cable modems from Motorola. AT&T shares were down 1 to 42 3/8, while Motorola was jumping 3 1/16 to 89 5/8. Shares of General Instrument were mounting up 2 1/8 to 48 3/8.
El Paso Energy
was bouncing up 3/16 to 38 1/16 after it said it plans to divest some assets following its acquisition of
once it signs a consent decree with the
Federal Trade Commission
. Sonat shares were advancing 5/8 to 37 3/4.
was stumbling 2 3/16 to 96 3/8 after it said that it has forged a $1.1 deal to buy German-based
Siemens Electromechanical Components
. The transaction is part of a huge reorganization effort by
, which is selling nine subsidiaries.
Earnings/revenue reports and previews
was tumbling 2 7/8, or 22.1%, to 10 1/8 after warning it would post fourth-quarter earnings only slightly higher than the year-ago 21 cents a share. The companies blamed delayed store openings and higher labor costs for the disappointing results.
Offerings and stock actions
was climbing 3, or 25%, to 15 1/8 after making its trading debut. The stock priced yesterday after being priced at $12 per share.
was soaring 8, or 6.6%, to 128 after it said it would not deliberate a stock split at its Oct. 8 board meeting.
was mounting 1 1/16 to 36 5/16 after it said that it approved an additional $100 million for its share-buyback plan.
was plummeting 6 3/8, or 9.5%, to 60 5/8 after
Warburg Dillon Read
cut the shares to buy from strong buy.
lowered its rating on the shares to market outperformer from its recommended list.
was falling 3 9/16, or 6.1%, to 54 7/16 after analysts at
upped their pre-tax loss forecast,
The New York Times
was slipping 1 11/16 to 61 7/8 after
initiated coverage of the stock at hold.
was climbing 2 3/8 to 90 1/4 after
Volpe Brown Whelan
started coverage at buy.
was declining 15/16, or 5.8%, to 15 1/16 after
Salomon Smith Barney
cut the stock's price target to 17 from 24.
was slipping 5/16 to 22 1/8 after Salomon rolled out coverage of the stock with an outperform rating and a price target of 26.
Merrill Lynch upgraded a pair of gold companies, upping
to long-term accumulate from accumulate and
to near-term accumulate from neutral. Shares of Barrick were up 13/16 to 24 15/16, while Homestake was advancing 5/16 to 10 1/8.
was bouncing up 1/16 to 27 5/8 after
started coverage of the stock with a strong buy rating.
was hopping 1 1/2 to 41 after
started coverage of the stock with a buy rating.
was sinking 1 1/2, or 6.4%, to 21 3/4 after Salomon Smith Barney initiated coverage with a neutral rating. Salomon also gave neutral ratings to
, which was falling 5 3/8, or 16.2%, to 27 5/8, and
, down 5/8 to 17 1/4.
was up 11/16 to 48 1/4 after
upped its third-quarter earnings estimates to 52 cents from 41 cents a shares and raised its price target to 55 from 50.
was stumbling 1 3/8, or 11.2%, to 10 13/16 after PaineWebber cut its shares to attractive from buy.
Banc of America
upped its ratings oil companies
to buy ratings from market performers. Burlington shares were tumbling 1 3/16 to 36 3/8, while Unocal was down 1 1/4 to 35 15/16.
Park Place Entertainment
was advancing 15/16, or 8.65, to 11 3/4 after
Morgan Stanley Dean Witter
started coverage of the stock with a strong buy rating.
Protein Design Labs
was up 7/8 to 31 3/8 after SG Cowen initiated coverage of the stock with a buy rating.
was declining 2, or 5.5%, to 33 15/16 after it said that its president and CEO, Gert Munthe, will resign by the end of the year, primarily for personal reasons.
was bouncing up 3 3/8 to 103 after it said that it would embark on a $939 million restructuring program to transform itself into an Internet-based firm.
was popping 1 1/2 to 49 7/16 after it unveiled a new network technology for the Internet which it said will avoid information traffic jams.