John J. Edwards III
Waiting for Washington. Or at least news from there.
After a three-day surge that yesterday put the
Dow Jones Industrial Average
above 7000 for the first time since March 12, the big-cap indices took a breather amid a close watch on the federal budget negotiations. The Dow dove as deep as 6913.46 intraday before recovering to a loss of 32.51 at 6976.48. The broader
fared slightly better, off 2.81 to 798.53. The bond market continued to improve, with the yield on the bellwether 30-year Treasury bond down to 6.92%.
While the Dow and the S&P stepped back, indices reflecting smaller stocks continued to improve. The tech-heavy
Nasdaq Composite Index
added 9.74 to 1270.50 and the small-cap
inched up 0.31 to 338.40.
"It's about time," said Larry Rice, chief market strategist at
Josephthal Lyon & Ross
. "I was beginning to wonder whether we'd ever have a rally in the small-caps relative to the Dow Jones industrials. It certainly is a pleasure to see the broad base."
Indeed, overall breadth on the
New York Stock Exchange
was positive, advancers ahead of decliners by 1,455 to 1,016. Volume dropped from the hyperactive levels of the previous two sessions to a more moderate 460.4 million shares. On the Nasdaq, advancers beat decliners by 2,320 to 1,800 on volume of 626.3 million.
Grace Messner, head of equity management at
in Delaware, said today was just another ordinary session in this time of extraordinary volatility. "I think it was a reflex sort of thing," she said of the recent big gains. "There's a hint of a better situation, but I think there's a lot of knee-jerk reacting going on. The volatility has been just incredible."
As for the budget talks -- which participants on both sides said are nearing conclusion -- Messner said the market effect has been overrated. "I don't think too many people are paying too much attention, because I think the assumption is that the two sides will come to some reasonable agreement," she said. "If you look at the size of the deficit relative to this economy, it's becoming a smaller and smaller factor."
American Stock Exchange
has carved out a niche in options trading, and that niche is getting bigger and bigger. AMEX announced that April saw the heaviest options volume in the exchange's history. Combined volume for equity and index options reached 7,312,966 contracts, compared with the previous record of 7,266,071 set in October 1987. Year-over-year, April's volume was up 38.3% from April 1996.
said it agreed to sell its
for $1 billion, pending regulatory approval. Minnesota Mining edged up 1/8 to 87 1/8 and Outdoor Systems gained 2 to 29 3/4.
gave up 1 3/8 to 115 1/2 after the city of San Francisco sued its
Bank of America
unit for allegedly overbilling city entities for municipal bond services. Bank stocks were otherwise mixed, with Dow component
down 5/8 to 101 3/4,
down 1/8 to 112 1/2,
up 5/8 to 92 3/4 and
up 1/2 to 48 5/8.
Internet access companies
gained after they and
settled with the
Federal Trade Commission
over allegations that they rooked customers with "free trials" that weren't so free. Under the agreement, the companies will get written authorization from consumers before tapping their checking accounts electronically. How nice of them. AOL rose 1 7/8 to 47 and CompuServe added 1/8 to 9 3/8.
Airline stocks descended after
to near-term neutral from buy and to long-term accumulate from buy. The firm cut
to near-term neutral from accumulate and to long-term accumulate from buy. UAL lost 2 1/2 to 71 7/8, Alaska Air fell 1/2 to 24 3/8,
skidded 1 to 91 1/8 and
gave up 1 1/8 to 26 3/8.
-- the result of the recent merger of
-- jumped 2 1/2 to 47 after CFO Bob Boehlke outlined the merger's expected benefits at the
Hambrecht & Quist
technology conference. He said the company had an annualized revenue run rate of $1 billion in the most recent quarter.
climbed 1 1/4 to 41 after President Peter Guglielmi told the Hambrecht & Quist conference that he's comfortable with
estimates of $1.25 per share for Tellabs' 1997 earnings. Guglielmi declined to comment on rumors that Tellabs plans to buy
, but he said Tellabs will continue to "look at strategic possibilities." Fore lost 1 1/8 to 14 1/4.
Speaking of market rumors,
reported on some scuttlebutt flying about investor
making a play for part of
. Kerkorian is said to be swapping out of
and into Viacom. A Kerkorian underling had no comment. Viacom rose 2 1/4 to 28 3/4 and Chrysler was unchanged at 30.
plummeted 3 1/8 to 12 1/4 after saying pricing changes on its third-party mortgages are expected to hurt results going forward. The company reported third-quarter earnings of 51 cents per share, in line with First Call's expectation and up from the year-ago 33 cents.
rose 1 to 42 3/4 after reporting fourth-quarter operating earnings of $1.12 per share, far ahead of the First Call view of 86 cents and the year-ago loss of $2.28.
upped estimates on the company.
bounded 5 to 45 after
started coverage at buy. UBS said the stock could appreciate to a minimum of 46.
rallied 3 to 19 1/2 after reporting first-quarter earnings of 21 cents per share, beating First Call's estimate by 3 cents. The company made 12 cents a year ago. Merrill Lynch boosted the stock to near-term buy from accumulate, leaving it at long-term buy, and named it the firm's Focus One Stock of the Week.
leapt 2 7/8 to 41 3/4 after
Standard & Poor's
announced that the company will be added to the S&P 500 Monday, replacing
Santa Fe Pacific Gold
. Santa Fe was up 5/8 to 15 3/8.
The battle for
took another turn as
said it might increase its offer to $21 per share from $19.50.
said it plans to continue with its competing offer of $20.37 a share in stock. National gained 1/4 to 20 1/2, Sylvan rose 7/8 to 31 1/4 and Harcourt fell 1/2 to 45 3/4.
spent most of the morning higher but finished down 5/8 at 29 1/4. The ubiquitous coffee merchant reported an April same-store-sales increase of 6%. PaineWebber upgraded Starbucks to buy from attractive.
followed a similar trajectory, ending off 1 1/4 at 31 1/2 after
initiated coverage at buy. The move came two days after Steris reported fourth-quarter earnings of 45 cents per share, a nickel better than First Call expected and up from 20 cents a year earlier.
Toys R Us
added 1/2 to 29 after Merrill Lynch upgraded the stock to near-term accumulate from neutral. The firm maintained a long-term accumulate rating.