Had you napped through the month of February, woke up today and saw the market's action, you might have thought nothing had changed. Technology stocks spurted higher while blue-chips lagged a tad.
Of course, February did happen (didn't it?), as did the first week of March. As tech names resumed the leadership slot, the
used a late-day spurt to establish a record close while the
Dow Jones Industrial Average
dipped only modestly from
Friday's record-setting advance.
After hanging tantalizingly below record territory for most of the session, the S&P 500 rose 7.26, or 0.6%, to 1282.73, eclipsing its previous best of 1279.64, set
The S&P's record came thanks to strength in energy names combined with the tech leadership. Amid speculation that weekend talks between Iran and Saudi Arabia could spur production cuts later this month by
Philadelphia Stock Exchange Oil Service Index
Tech names were encouraged by word
reached a settlement with the
Federal Trade Commission
just a day before its antitrust trial was set to begin.
The Nasdaq Comp rose 60.51, or 2.6%, to 2397.62, its highest close since
Feb. 11. In addition to Intel, which gained 4.4%, the index was paced by
rose 3.3% while the
Philadelphia Stock Exchange Semiconductor Index
Internet names also scored, led by
, which rose 31.3%.
TheStreet.com Internet Sector
index climbed 37.09, or 6.9%, to 571.43, its highest close since setting a record of 588.19 on
Jan. 11. Meanwhile,
TheStreet.com E-Commerce Index
rose 7.34, or 7.7%, to 102.86.
The Dow industrials fell 8.47, or 0.1%, to 9727.61 after trading as low as 9674.33 and as high as 9764.80 intraday.
were among the Dow's biggest downward influences, as financial and consumer names, in general, slid from big recent gains.
Small-caps enjoyed a modest upswing; the
gained 2.05, or 0.5%, to 400.06.
"The S&P setting a new high on a basically flat advance/decline is fairly encouraging," said Jay Meagrow, vice president of trading at
in Cleveland. "This market had nowhere to go today after running at the end of last week. I thought we'd be off 100. This is pretty good."
Meagrow observed a "fair amount" of orders of all stripes today, speculating many players may have waited for a sell-off that didn't come before putting money to work late in the session.
"I think we've set a new trading range," he continued. "We were solidly stuck between 9000 and 9400 for about three months but we're looking at new levels between 9700 and 10,300."
New York Stock Exchange
trading 711.2 million shares traded while declining stocks bested advancers 1,595 to 1,360. In
Nasdaq Stock Market
activity 976.9 million shares were exchanged while losers led 2,095 to 1,883. New 52-week highs led new lows 77 to 49 on the Big Board but new lows led 86 to 71 in over-the-counter trading.
Close, but No Cigar
Notwithstanding the Nasdaq's upward bias today, Tony Dwyer, chief market strategist at
, is unbowed. Dwyer, you'll recall, on
Feb. 1 correctly forecast a big correction in tech bellwethers with a downside target of 2100 for the index; an outlook he reiterated
Feb. 26 and again today.
"I haven't changed that view," Dwyer said. "We're going through a period where it looks like everyone should be invested in tech, but I don't see anything different. I've said all along fundamentals aren't changing, but valuations are too high."
Later in the session, the strategist called back to reiterate his view but add a disclaimer: If the Nasdaq closed above 2400, it would "suggest a retest of its high before it goes down again." The index today climbed as high as 2398.19.
Earlier, Dwyer dismissed the argument that technology's outlook has been meaningfully changed by developments such as Intel's deal with the FTC and its acquisition last week of
Level One Communications
breakup; and the much ballyhooed partnership between
"It looks to me like they're trying to find a way to grow because the core business might not be fast enough for current valuations," he said. "It did bring momentum back -- we're seeing a nice uptick -- but we're still in the midst of correcting the excesses. It's also important to remember the sharpest rallies are in times of decline."
To support the skeptical market outlook, the strategist cited the following: Since the beginning of the year, the average Nasdaq stock (market cap greater than $100 million and share price over $5) is up 1.3%, but down 32% from its 52-week high. The average NYSE stock (same parameters) is down 4.3% for the year and off 29% from its 52-week high.
At the same time -- "and here's the killer," he said -- the average top-10 Nasdaq stock (by market capitalization) is up 15.7% for the year and down only 12% from its 52-week high. Meanwhile, the Dow is just below an all-time high.
"The whole action is skewed to a very few names," Dwyer summarized. "In a nutshell, until the momentum games fails, it will maintain its direction. You'll buy top-five Dow and Nasdaq names until
they break. Until then, you have the opportunity to trade select large-caps and avoid everything else."
J.P. Morgan's Cliggott Boosts Earnings Views
In the midst of the S&P 500's record run,
market strategist Doug Cliggott upped his earnings forecasts for the S&P 500, raising growth estimates for 1999 to 8% from 3%, and for 2000 to 10% from 8%.
One reason for the change was compositional. "The S&P has changed dramatically in the last 12 or 18 months in a way that we think its growth rate is pushed up," said Cliggott. Other factors were an apparent bottoming in commodity prices and a spurt in business spending on capital equipment in the fourth quarter last year.
But seeing improved earnings prospects is not the same thing as saying it's time to buy stocks, Cliggott said. Stronger earnings suggest a stronger economy. With a stronger economy, it seems doubtful the yield on the long bond will again touch 5%. "You can either have more earnings or a bond-market rally, but not both," he said.
Today, the price of the 30-year Treasury bond rose 6/32 to 95 1/32, its yield sliding back to 5.59%.
Among other indices, the
Dow Jones Transportation Average
fell 24.39, or 0.7% , to 3288.40; the
Dow Jones Utility Average
slid 2.28, or 0.8%, to 299.23; and the
American Stock Exchange Composite Index
gained 4.77, or 0.7%, to 712.18.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
jumped 88.29, or 1.4%, to 6503.40 and the
Mexican Stock Exchange IPC Index
roared up 133.05, or 3.1%, to 4460.85.
Monday's Company Report
Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.
As noted above, Intel hopped up 5 to 119 5/8 after reaching a deal with the FTC a day before an antitrust trial against the chip maker was set to begin. The feds had argued Intel cut off customers and competitors in part to stifle competition.
Elsewhere, companies seemed to cooperate with the sentiment that the beginning of the week is the best time to wine, dine and combine.
- Topping the list was
Browning-Ferris (BFI) , which soared 4 1/8, or 11.9%, to an annual high of 38 7/8 after
Allied Waste (AW) agreed to acquire the company for $45 a share, excluding the assumption of $1.8 billion in debt. The deal will create the second-largest solid-waste services company in North America, with about $6.6 billion in annual revenue and a national network of landfill, collection, transfer, recycling and other operating assets. The combined company, which will be called
Allied Waste Industries, will be led by Allied Waste's current senior management team. Allied Waste lifted 1 15/16, or 12.9%, to 16 15/16. Last week,
TheStreet.com reported on the strange
call-buying in Browning-Ferris.
Specialty chemical maker
Albemarle (ALB) - Get Report slid 1 1/2, or 6%, to 23 11/16 after agreeing to buy U.K. phosphate king
Albright & Wilson for about $655 million in cash.
American Bankers Insurance (ABI) rose 5 5/8, or 12.1%, to 52 after
Fortis, a Dutch-Belgian insurance, banking and investment group, said it will buy the company for $2.6 billion.
Analysis & Technology (AATI) climbed 3 1/4, or 15.3%, to an all-time high of 24 1/2 after agreeing to be acquired by privately held
Anteon for $26 a share.
BMC Software (BMCS) picked up 2 5/8, or 6.9%, to 40 13/16 after agreeing to buy Israeli
New Dimension Software (DDDDF) for $52.50 a share, or $650 million, in cash. New Dimension added 2 7/16, or 5%, to 51 3/8.
CIT Group (CIT) - Get Report lowered 9/16 to 30 3/16 on word it will acquire
Newcourt Credit (NCT) in a $4.17 billion deal that CIT said will create the largest publicly owned company in the commercial finance industry. Newcourt Credit rose 13/16 to 26 5/8.
Homestake Mining (HM) sliced off 9/16, or 6%, to 8 7/8 after announcing it will buy
Argentina Gold for $200 million in stock.
Mergers, acquisitions and joint ventures
vaulted 1 13/16, or 22%, to 10 1/16 on market chatter it will be taken out by
, as reported earlier in
Options Buzz. Qwest climbed 5 1/4, or 8.6%, to an all-time high of 66 1/2.
flew 3 3/16 to 107 1/2 after agreeing to license
Natural Language Speech Assistant
tool suite. Unisys added 1 3/8 to 31 13/16.
jumped 3 3/16, or 15.9%, to an annual high of 23 5/16 after
said the company was rumored to be in talks with
to create new products. Compaq picked up 1/8 to 34 3/8.
-- no relation to this publication or its parent company -- continued its 85.1% rise from Friday, shooting up 3 23/32, or 73.9%, to 8 27/32, after the tiny Internet content provider announced a pact with
. AOL flew 3 15/16 to 90 7/8.
expanded 2 7/8, or 10.1%, to 31 3/8 after agreeing to serve as the exclusive supplier of office supplies for
shopping center. GeoCities lifted 6 3/4, or 6.6%, to 109 5/8.
closed unchanged at 18 1/4 after amending its poison-pill takeover defenses, making it more difficult for
to accomplish its hostile takeover of the company. Philips Electronics lost 1/8 to 69 11/16.
Earnings/revenue reports and previews
excelled 1 9/32, or 34.5%, to 5 1/32 after saying it sees break-even results for the second half of fiscal 1999, excluding previously announced restructuring charges, which is better than expected.
dropped 1 1/16, or 7.4%, to 13 3/8 after saying it expects to report second-quarter earnings of 5 cents to 8 cents a share, including a 3-cent charge from the devaluation of Brazil's real. The eight-analyst estimate called for earnings of 22 cents.
advanced 3 1/4, or 17.5%, to 22, matching an all-time high, after saying it expects to post near break-even second-quarter results and then return to profitability by the third quarter. The seven-analyst estimate called for a second-quarter loss of 7 cents a share and a loss of 3 cents in the third quarter. The company said its seasonal decline in PC modem products wasn't as bad as expected and that it saw solid sequential growth in wireless, network access, digital infotainment and personal imaging.
grew 1 5/8, or 31%, to 7 after announcing fourth-quarter earnings of $1.21 a share, beating the single-analyst view of $1.12 and the year-ago 98 cents. The company also said its quarter same-store sales rose 0.6%.
sank 1, or 20.3%, to 4 after saying it may have to restate up to $1.75 million of the earnings recorded its in first three quarters of fiscal 1998. The company also said it hired
to explore strategic options.
plunged 1 1/2, or 14.3%, to 9 after saying it won't declare a second-quarter dividend and that it will instead use the funds for continuing growth and cost reductions.
slipped 3/4 to 29 1/8 after saying it expects to take a $50 million to $60 million restructuring charge in the third quarter.
Offerings and stock actions
popped up 40 1/4, or 24%, to an all-time high of 208 1/8 ahead of today's 2-for-1 stock split.
scored 12 3/8, or 23%, to 66 1/2 after
Morgan Stanley Dean Witter
raised the stock to outperform from neutral.
gave up 2 1/2 to 133 5/16 after
dropped it to attractive from buy.
slid 1 7/8 to 45 1/4 after
cut the stock to perform in line from outperform.
lifted 4 3/4, or 13.2%, to 40 9/16 after
started coverage with a buy and a price target of 50 a share and
initiated coverage with a buy and a target of 43 a share.
reeled in 4, or 14.3%, to 32 after saying the recent volatility in its stock was due to "misconceptions" about its
unit, which it said is a separate legal entity responsible for its own liabilities. Delphi said it didn't expect material financial problems because of the unit.
soared 15 7/16, or 48.5%, to 47 1/4 after the Internet auctioneer said more than 10 million bids were placed on its service. Among its competitors,
jumped 9 1/16, or 14.4%, to 72 5/16 and
leapt 21 15/16, or 14.7%, to an all-time high of 171.
shot up 14 11/16, or 14.1%, to an all-time high of 119 after a federal agency that controls software exports permitted the Internet security software maker to ship its high-security products to a broader set of overseas customers.
vaulted 2 5/8, or 120%, to 4 13/16 after receiving a patent for the commercialization of agents and steroid hormones for treating sexual dysfunction in women.
Senior Writer Justin Lahart contributed to this story.