There were mixed signals for the market to digest today. Fittingly, perhaps, major indices ended, well, mixed. But traders were relieved and even impressed by the market's continued ability to resist severe downturns.
"Basically, it was a nice reversal," said Anthony Conroy, head of stock trading at
. "They had a chance to take 'em down big -- you had some of the big guys out there talking correction and people looking at the bond-market auction -- but the market was pretty resilient. Technology was the real key to the turnaround."
Technology stocks were inspired by chip equipment makers and announcements of separate alliances between
On the flip side, Ralph Acampora of
and Richard McCabe of
each issued some unflattering comments about the stock market. Additionally, transports got whacked and the bond market could not sustain its early gains ahead of tomorrow's auction of $15 million in five-year notes. The 30-year Treasury bond ended unchanged at 98 17/32, its yield at 5.35%.
Nasdaq Composite Index
was the best performing of the major indices, rising 31.30, or 1.3%, to 2404.92. The tech-flavored index closed down from its initial high of 2414.98 but managed to climb from a late-morning low of 2358.05.
In the wake of last week's shellacking, most tech bellwethers closed higher, sending the
up 2.3%. Up more than 3% each were Microsoft,
; the last ahead of Chairman Michael Dell's scheduled speech at the
technology conference tomorrow.
Chip equipment makers, led by
, staged an impressive uprising after analysts at Merrill Lynch and
Morgan Stanley Dean Witter
offered separate upgrades of the sector. The
Philadelphia Stock Exchange Semiconductor Index
Internet stocks had a tougher time, however.
TheStreet.com Internet Sector
index fell 27.67, or 5.2%, to 504.85 and
TheStreet.com E-Commerce Index
shed 3.36, or 3.2%, to 101.84. Options on the E-Commerce Index begin trading on the
American Stock Exchange
Feb. 17; quotes became available Friday, under the symbol ICX.
weighed on both proxies while leaders such as
were unable to muster any forward progress.
Outside the indices, but in the throes of some major volatility, smaller online brokers again retreated from blockbuster gains registered last week.
shed 22.6% and
Small-cap stocks stumbled, overall, but not to the same degree; the
slid 1.39, or 0.3%, to 411.33.
On the blue-chip side of the ledger, the
Dow Jones Industrial Average
climbed as high as 9334.88 initially, tumbled as low as 9209.24 around midday, and then recovered somewhat in the afternoon to close off 13.13, or 0.1%, to 9291.11.
was the biggest positive influence on the index, but weakness in components such as
proved too much to overcome.
gained 4.37, or 0.4%, to 1243.77. Strength in technology, energy, and select consumer-focused names such as
kept the index out of the red. Weakness in the financials and transports prevented a bigger upside.
fell 4.9% after having to cancel hundred of flights due to a dispute with the pilots' union of its
unit. Other carriers fell in sympathy; the
American Stock Exchange Airline Index
2.1%. That performance helped send the
Dow Jones Transportation Average
down 38.41, or 1.2%, to 3209.25.
Conroy noted the week is jam-packed with potentially market roiling events, including the likely end to the
impeachment proceedings and
testimony on Thursday before the
House Banking Committee
. But he does not expect a big reversal unless there are signs of higher interest rates.
"Normally it's not earnings that take you into a bear market, it's some kind of event," he said. "The past couple of times it's had something to do with interest rates. If the Fed says they're raising interest rates, you're going to see a dramatic correction."
New York Stock Exchange
action, a modest 709 million shares traded -- the lowest total since
New Year's Eve -- while declining stocks led advancers 1,559 to 1,401. In
Nasdaq Stock Market
activity, losers led 2,163 to 1,880 on 887.5 million shares. New 52-week lows led new highs 74 to 22 on the Big Board but new highs led 59 to 52 in over-the-counter trading.
Market's Muddling Here to Stay?
The market's indecisiveness is exactly what Buzz Hussey, managing director at
Dain Rauscher Wessels
in Dallas, said investors should expect in the near to intermediate term.
"I've been moderately bullish for a long time but it makes sense to have some cash," Hussey said. "The market is high and there's a lot of money sloshing around, but there's a lot of nervousness and people with big profits. That leads to a situation where you can have some selloffs in various industries and sectors."
Hussey said investors need to be "opportunistic" rather than outright "bearish or bullish" in the current environment. "I don't see the market going up or down a lot of from here, but there's a lot of rotation from group to group. At any moment, stocks you want to buy or own for one reason or another can get hit 20% to 30%."
The best opportunities for new investment are in homebuilders such as
, or energy plays such as
, the strategist said. Dain Rauscher has not done any equity underwriting for the aforementioned.
Hussey is also enamored with technology stocks, which "clearly have the momentum and dramatic fundamentals." But, "I'm not sure I'd buy 'em here today," he said. "You've got the Goldman Sachs conference going on, and there's some enthusiasm built up. They'll be a better time to buy 'em than today."
Among other indices, the
Dow Jones Utility Average
gained 2.31, or 0.8%, to 293.60; and the
American Stock Exchange Composite Index
fell 0.86, or 0.1%, to 706.26.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
lost 49.60, or 0.8%, to 6583.77 and the
Mexican Stock Exchange IPC Index
edged up 3.25 to 4016.80.
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, Applied Materials popped 6 11/16, or 11%, to an all-time high of 67 7/16 after Morgan Stanley Dean Witter lifted it to strong buy from neutral and Merrill Lynch upgraded it to intermediate-term buy from accumulate. Merrill also pushed up a slew of other semiconductor names:
jumped 2 7/8, or 11.4%, to 28 and KLA-Tencor jumped 4 3/16, or 7.8%, to 58 1/16 after the firm raised them to intermediate-term buy from accumulate;
Advanced Energy Industries
jumped 1 3/8, or 5%, to 29 1/8,
jumped 1 15/16, or 5.6%, to 36 15/16,
Silicon Valley Group
jumped 2 1/8, or 14%, to 17 5/16 and
jumped 2 3/16, or 5.5%, to 42 1/16 after the firm raised them to intermediate-term accumulate from neutral;
jumped 4 5/8, or 5.1%, to 94 5/8 and
jumped 2 15/16, or 6.8%, to 46 1/16 after the firm raised them to intermediate-term accumulate from neutral and to long-term buy.
Mergers, acquisitions and joint ventures
soared 21 1/8, or 48%, to 65 1/8 after
agreed to buy it in a stock-for-stock deal valued at $850 million. Chubb, which lost 2 5/8 to 55 7/16, was the subject of a story in
saying that, with
expected to dismantle the remaining barriers that separate banking from insurance, Chubb could have takeover appeal to a large U.S. financial-services firm that wants to expand into insurance. In a recent research report on
Warren Buffett's Berkshire Hathaway
analyst Alice Schroeder identified Chubb as the one insurer Buffett might be interested in acquiring, the paper said.
Separately, Executive Risk posted fourth-quarter earnings of 93 cents a share, in line with the 10-analyst estimate and up from the year-ago 84 cents.
In other insurance news, insurance analyst Weston Hicks, ranked as the No. 1 insurance/nonlife analyst for five straight years by
magazine, has left
Sanford C. Bernstein
. At Morgan, Hicks will continue to cover property and casualty companies.
In recent weeks Bernstein has also lost Moshe Orenbuch, who moved to
Donaldson Lufkin & Jenrette
to cover specialty finance companies.
A J.P. Morgan spokesman declined to comment.
Computer Management Sciences
powered up 4 1/8, or 17.7%, to 27 9/16 after
agreed to acquire the company for $435 million. Computer Associates slid 7/16 to 45 7/8.
dropped 1 1/8 to 71 /38 after it and
card, which the companies dubbed the "official credit card of the Net." MBNA lost 1/4 to 24 11/16.
Motorola picked up 1 7/8 to 68 5/16 and Cisco added 11/16 to 101 15/16 after saying they will invest up to $1 billion over the next four to five years to deliver an Internet-based wireless network.
unveiled Nextel Online wireless Internet services, combining voice, data and the Internet. Nextel lifted 1 3/4, or 5.8%, to 32 1/16; Netscape fell 1 1/2 to 67 15/16.
shot up 6 13/16, or 15%, to 52 1/8 on word
, a Bermuda-based insurer, is in negotiations to acquire the company for about $1 billion in stock. XL Capital lowered 7/16 to 61 15/16.
Patriot American Hospitality
took in 1/2, or 8.3%, to 6 9/16 after both
and an investor group led by
Apollo Real Estate Advisors
sweetened competing offers for a piece of the hotel real-estate investment trust,
The Wall Street Journal
reported. Hilton brought in 11/16 to 15 3/8.
Sun Microsystems rose 3 15/16 to 104 1/2 after announcing it would integrate
products into its own products and internal corporate systems. BMC added 7/8 to 46 1/8.
Earnings/revenue reports and previews
spiked up 3 1/8, or 13.1%, to 26 15/16 after
BancBoston Robertson Stephens
upgraded the stock to strong buy from buy saying the company probably will exceed its own first-quarter earnings view. The 17-analyst forecast calls for a break-even first quarter compared to the year-ago profit of 22 cents a share.
lifted 1 1/8, or 6.4%, to 18 5/8 even after late
Friday recording a fourth-quarter loss of 40 cents a share, below the two-analyst forecast for a profit of 20 cents and the year-ago profit of 31 cents. The company blamed economic global turmoil, production shortfalls and low gold prices. Pioneer also said it's closing its brokerage operations in Russia.
Sprint PCS Group
won 2 13/16, or 9.6%, to 32 1/8 after reporting it added 836,000 new subscribers in the fourth quarter, bringing its total new subscribers for 1998 to 1.7 million.
Offerings and stock actions
climbed 3 1/16 to 66 7/8 after saying more than 70 members of its senior management agreed to buy up to 1.2 million shares for a total of $76 million.
gave back 7 13/16, or 11.8%, to 58 3/16 after four straight trading days of strong rallying following its $16 IPO. A couple of other tech newcomers were forced to return recent gains:
shed 12 1/8, or 25.5%, to 35 1/8 and
Modem Media.Poppe Tyson
shed 5 1/4, or 11.6%, to 39 15/16.
lifted 2 11/16, or 12.2%, to 24 11/16 after Morgan Stanley Dean Witter raised it to strong buy from outperform.
kicked up 2 1/4 to 51 after
BancBoston Robertson Stephens
lifted the stock to buy from long-term attractive, saying "major uncertainties seem to be behind the company."
vaulted 4 5/8 to 135 while Swedish
tumbled 1/16 to 27 5/16 after Merrill Lynch upped both stocks to intermediate-term accumulate from neutral and to long-term buy from accumulate.
brought in 3 1/16 to 69 3/4 after Merrill Lynch upgraded it to near-term buy from near-term accumulate.
sloughed off 4, or 5.8%, to 65 1/4 after Merrill Lynch initiated coverage with an intermediate-term accumulate and a long-term buy.
dwindled 1 1/16, or 6.6%, to 14 15/16 after
BT Alex. Brown
slashed it to buy from strong buy. The company also posted fourth-quarter earnings of 46 cents a share, in line with the nine-analyst forecast and 3 cents ahead of the year-ago figure.
AMR crashed 2 15/16 to 57 after its
unit canceled about 90 flights Saturday and around 200
yesterday because of an escalating dispute with its pilots union over the progress of the company's recent merger with
. American Airlines said it expects to cancel 360 more flights today. Reno Air added 1/32 to 7 23/32.
swelled 2 3/8, or 37.3%, to an all-time high of 8 3/4 after the computer network company said it opened two e-commerce sites.
Microsoft flew up 5 3/16 to 165 1/4 after
The Seattle Times'
interactive edition reported the company may announce this week plans to reorganize, focusing on customer service and improving its presence on the Internet.
skidded 2 3/8 to 45 13/16 after announcing it stopped trying to genetically engineer plants to make plastic and that it put its biodegradable plastic business up for sale.
lowered 22 7/8, or 11.6%, to 174 1/8 on jitters about a government-appointed panel that is expected to take a step toward breaking the company's hold on registering Internet-domain names and release guidelines for potential competitors.
Internet software company
dropped 3/4, or 6.2%, to 11 3/8 after announcing that Douglas Colbeth, president and CEO, will take a temporary medical leave, expected to last eight weeks. The company said Colbeth is taking the leave to treat a cardiac condition.