The Palm Pilot played both the beauty and the beast in the Nasdaq's hand today.
, the spin-off of
, opened more than 100 points over its IPO price of $38, but quickly pulled back.
The Nasdaq was setting new records right around when trading began, but slumped thereafter, ending the day in the red. The
Dow Jones Industrial Average
fared better, finishing in positive territory, if just barely.
Palm opened at 145 and quickly surged to 165, but the stock saw its gains slowly whittled away, to close at 95 1/16. That's still a 150% gain and it gives the company a market capitalization of $53.4 billion after one day of trading.
But the gains of the child were not visited upon the parent today, as 3Com tanked, dropping 22 5/16 to 81 13/16, a 21.4% slide, on 97.8 million shares, making it the day's most active.
Combined volume for the two companies was 135.5 million, or about 6.4% of the Nasdaq's 2.12 billion shares traded today. Some technicians saw the erosion of 3Com and the Nasdaq's late afternoon slide into negative territory, as an extension of the inability of Palm to sustain its early lofty gains.
"The Nasdaq started rolling over about 11:30, around the time the deal came out," said Richard Dickson, technical strategist at
Scott & Stringfellow
. "That's maybe a coincidence...the Nasdaq hasn't had a reversal like this recently."
But strategists didn't make much of the Comp's slide into negative territory. The signals didn't bode well in the early afternoon, when the index was threatening to close below the previous day's low mark of 4732, something technicians view as a sign of future weakness. But the index managed a recovery in late afternoon, finishing down 27.98 to 4754.30 on its second-busiest day in history.
The mild decline suggests that the Nasdaq, though engaging in a little profit-taking, isn't ready for a breather from its K2-like ascent, even if several important sectors -- biotechnology, Internet stocks, on-line brokers and computer box makers -- had some flesh extracted.
Meanwhile, the Dow and S&P extended this week's strength, shaking off early weakness to finish higher on the day. The S&P rose 2.59 to finish at 1381.76, down 6% this year, while the Dow gained 26.99 to finish at 10,164.92. It's down 11.6% for the year.
"It's very difficult for a market to drop more than 10% in the first few months of the year -- it has strong tendencies to find support," said Steven Goldman, strategist at
. "Had we finished at Friday's lows this week it would have been the steepest two-month loss in 15 years."
The biotech sector finally took some profits today. After a 89% year-to-date gain in the
American Stock Exchange Biotech Index
, that index fell 3.5% today, led by
, which lost 4 7/16 to 251 7/8.
lost 11 1/8, or 4.9%, to 214 1/8.
Internet bellwethers had a rough go of it today, including
, finishing down 5 1/2 to 64 1/4, an 8% decline, and
, which shed 3 5/16, or 5%, to 62 9/16.
TheStreet.com Internet Sector
index fell 35 to 1164.1. The small-cap
fell 4.31 to 584.04.
was off today, on midday rumors that
would acquire the global undersea cable provider. Global Crossing rose 3 7/16 to 54 3/8, a 6.75% gain, while Deutsche Telecom rose 8 13/16, a 10% rise, to 92 1/16.
Strength abounded today in the oil service providers, boosted by the climb in crude oil futures. Crude oil for April delivery on the
New York Mercantile Exchange
closed at $31.69 today, even as ministers from some of the major oil-producing nations -- Saudi Arabia, Mexico and Venezuela -- convened in London to discuss increasing
production when the current supply cut agreement runs out March 27.
With the world consuming two million more barrels of oil a day than is currently being produced, OPEC's hand is being forced, even if members of Congress believe officials such as Energy Secretary
could do more to get OPEC to speed up the process.
Not surprising, the
Philadelphia Oil Service Index
gained 3.8% to 108.15 today.
gained 4 1/8 to 81 5/8, while
rose 1 1/4 to 42 3/16 and
gained 1 7/16 to 18 1/16.
New York Stock Exchange's
most active, rising 3 3/8 to 72 on 34.2 million shares.
The bond market, meanwhile, was quiet, as traders were awaiting tomorrow's release of the February employment report. Economists have forecast a 206,000 rise in new nonfarm payrolls and for the unemployment rate to remain unchanged at 4%. The 10-year Treasury bond ended the day down 3/32 to 100 24/32, yielding 6.40%.
Breadth was negative on heavy volume.
New York Stock Exchange: 1,276 advancers, 1,668 decliners, 1.18 billion shares; 102 new 52-week highs, 158 new lows.
Nasdaq Stock Market: 2,047 advancers, 2,235 decliners, 2.12 billion shares; 421 new highs, 103 new lows.
The above numbers are preliminary. Fore more information on stocks in the news, please take a look at TSC's Company Report, published separately.
As originally published, this story contained an error. Please see
Corrections and Clarifications.