Further pounding home the lesson that nothing matters in the markets these days until the final hours, the major indices today turned on a dime at 2 p.m. EDT and turned losses into a slightly up finish.
Dow Jones Industrial Average
was down more than 84 points around 2 p.m., just dipping below the 7700 level. That test triggered a flurry of buying that ended with the Dow up 5.11 to 7787.33. The broader
, down more than 9 at its worst, eked out a gain of 0.68 to 913.70. The tech-paced
Nasdaq Composite Index
fell as low as 1583 intraday but closed up 4.24 at 1595.54.
There seemed to be little fundamental underpinning for the swing upward -- hardly a surprise as vacation-denuded trading floors remain quiet on the downward slope toward Labor Day. Bonds strengthened slightly today but didn't vary much throughout the session, with the yield on the bellwether 30-year Treasury easing to 6.65%. The dollar rose fractionally against the German mark and the Japanese yen, but as with bonds, there was no midafternoon shift to spur stock investors.
Market breadth was positive as volume stayed well off its accustomed pace. On the
New York Stock Exchange
, 1,627 advancers beat 1,167 decliners on volume of 493.8 million shares. Nasdaq advancers led decliners by 2,347 to 1,898 on 644.5 million shares.
Gail Dudack, the bearish market strategist at
, wasn't too excited about making a prediction on this muddy market's likely path forward. "I think anybody could make a guess, but the only way anyone will know is when the markets retest the old highs, which markets almost always do," she said.
That retesting of highs should come once September blows Wall Streeters in from the beaches, Dudack said. "Clearly August has been a correcting month," she said. "I'm a skeptic, but I'm willing to let the market prove me wrong."
Dudack said market watchers should look out for certain telltale signs in any autumn market recovery: increased trading volume, solidly positive breadth and clear leadership among industry groups. "If we get back to
Dow 8250 and we see good volume, breadth and leadership, we can say this was just another mini-correction," she said.
The two days ended Tuesday saw an estimated $600 million in net outflows from U.S. equity mutual funds, reversing the strong inflow trend seen last week, according to
Mutual Fund Trim Tabs
. Forty-one managements had redemptions, 25 were flat and 27 received net new cash,
said. That's a sharp contrast with the three days ended Thursday, when U.S. funds lured an estimated $6.3 billion as 51 managements gained net cash, 20 were flat and 21 had redemptions.
Wednesday's market action
(earnings estimates from
Deepwater drillers flourished after a record number of bids were entered in yesterday's Gulf of Mexico lease sale.
Diamond Offshore Drilling
gushed up 3 3/4 to an all-time high of 51 1/8,
rose 4 11/16 to an all-time high of 93 9/16,
Reading & Bates
gained 1 3/8 to an all-time high of 35 1/2 and
added 1 1/4 to 30 7/8. The shallow-water driller
didn't share in the party, shedding 1 15/16 to 48 7/8.
Besides deepwater drillers, big oil producers also shone.
Deutsche Morgan Grenfell
raised the integrated oil sector to overweight from underweight and upgraded
to buy from hold. Chevron gained 1 11/16 to 79 15/16,
rose 2 to 117,
rose 1 1/2 to 63 1/4 and
was up 1 3/8 to 76 9/16.
leapt 1 7/8, or 10.3%, to a post-offering high of 20 3/8 on reports that it would seek quick approval for a Kaposi's sarcoma drug that has performed well in trials. The company is a joint venture of
, which was up 5/16 to 32 7/16, and
, which moved up 7/8 to 14 3/4.
Harshly on the downside in the drug-development business was
, which collapsed 4 1/8, or 45.2%, to an all-time low of 5 1/16 after it suspended plans to submit a biological license application for a dermatitis treatment.
downgraded the stock to neutral from attractive.
slumped 5 15/16, or 13.8%, to 37 1/16 after saying late
yesterday that it plans to sell its
Computing Devices International
downgraded the stock to neutral from buy.
jumped 2 1/2, or 16.6%, to 17 9/16 after
made an unsolicited offer to buy the company for $18.75 per share, or $496.9 million, in cash and stock. Imperial Holly advanced 11/16 to 15 1/4.
slipped 1/2 to 32 after
Morgan Stanley Dean Witter
downgraded the stock to outperform from strong buy. The firm took the same action on
Quorum Health Group
, sending it down 1/4 to 33 7/8.
declined 7/16 to 27 1/2 even though Morgan Stanley upgraded it to outperform from neutral.
bounded 3 5/8, or 10.5%, to an all-time high of 38 1/8 after reporting late yesterday first-quarter earnings of 74 cents per share, 8 cents ahead of the four-analyst consensus estimate and up from the year-ago pro-forma 50 cents.
extended its recovery from its tainted-beef travails, rising 1 1/4, or 8.3%, to 16 3/8 after
upgraded the stock to near-term accumulate from hold. Merrill maintained a long-term buy rating.
Union Pacific Railroad
fell 1 3/4 to 66 1/2 amid a federal safety probe that has intensified after yet another major accident.
Delta Air Lines
skidded 1 11/16 to 86 1/4 on reports that the airline's pilots plan to ask for a midcontract pay hike. Other airlines were mixed, as
fell 1 3/8 to 104 1/4 and
fell 1 1/4 to 34 5/16 while
crept up 3/16 to 77 15/16 and
added 5/16 to 28 7/8.
gave up 4 1/4, or 9.7%, to 39 9/16 after
downgraded the stock to market outperform from trading buy.
dropped 1 3/4, or 8.1%, to 19 3/4 after reporting worse-than-expected second-quarter results late yesterday.
upped its fiscal 1998 and 1999 earnings estimates on the company.
declined 3 7/16 to 62 3/4 after Salomon Brothers downgraded the stock to hold from buy.
Two photomask companies went in different directions after
started both at strong buy.
improved 1 7/8 to 66 1/4 but
surrendered early gains and lost 5/8 to 60.
hopped 3 to 41 7/16 after Morgan Stanley reiterated an outperform rating.
Argentine beer and mineral water company
bounced 5/8, or 13.5%, to 5 1/4 after Salomon Brothers resumed coverage at strong buy. The firm set a 12-month price target of 8 on the stock.
gained 2 5/8, or 8.8%, to an all-time high of 32 7/8 after
initiated coverage at buy with a 12- to 18-month price target of 48.
rose 3/4 to 14 1/8 after UBS Securities initiated coverage at strong buy, setting a six- to 12-month price target of 18.
Total Renal Care
climbed 3 3/16 to 46 13/16 after acquiring six new dialysis centers, serving more than 1,000 patients in Detroit, Chicago, Washington and Whittier, Calif.
lost 1 5/8 to 42 7/16 after
downgraded the stock to hold from buy.
Pimco Advisers LP
improved 2 1/16 to 29 3/8 on an upgrade to near- and long-term buy at Merrill Lynch. Merrill had rated Pimco near-term accumulate and long-term neutral.