John J. Edwards III
The cry echoed from the concrete canyons of Wall Street to the storefront brokerages of Main Street: Never mind!
Just as misspoken or misinterpreted comments from Japanese Prime Minister Ryutaro Hashimoto trepanned the market
yesterday, his recanting of those threatening Treasury-selloff noises today let the market recover almost all of its losses. The
Dow Jones Industrial Average
gained 153.80 to 7758.06, erasing much of its 192.25-point slide. Similarly, the broader
rose 17.72 to 896.34 and the tech-sparked
Nasdaq Composite Index
added 18.11 to a record 1452.43.
"It's almost as if yesterday and today never happened," said Joseph Battipaglia, chief investment strategist at
. He said much of the wild volatility in recent trading was out of human hands. "I think really the story of yesterday and today is program trades in the last hour," he said. "Yesterday, whatever weakness might have been generated by the Japanese prime minister's comments was exacerbated by program trading in the last hour." The process reversed itself today.
Volume picked up on the big exchanges today, with the
New York Stock Exchange
seeing 546.2 million shares change hands. Big Board advancers beat decliners by 1,787 to 962. On the Nasdaq, 2,477 advancers led 1,888 decliners on 648.3 million shares.
NYSE traders were more harried than usual today as the Big Board made the shift to increments of 1/16. After letting loose an uncommonly sharp burst of profanity, one trader summed it up: "What a nightmare."
The bond market drifted near break-even, recovering from a harsh reaction to the shockingly high level of consumer confidence reported by the
. The yield on the benchmark 30-year Treasury bond edged up slightly to 6.69%.
With earnings season approaching once again, Wall Streeters seem unconcerned about the bearish whispers that earnings can't possibly keep up their strong performance. "I think we're more comfortable with the level of earnings than we are with the potential path of monetary policy," said Wayne Nordberg, a partner and portfolio manager at
. "It's only a matter of time before the
has to resume its policy that it set in motion back in March" -- tightening short-term interest rates. "The market's increasingly going to have to focus on the tempo of economic growth in the second half and its effect on monetary policy," he said.
Battipaglia said he's also unconcerned about possible weak corporate earnings. "That claim has been made for the last five earnings reports," he said. "The quarter's over. The companies with bad earnings have prereported already."
But Battipaglia joined Nordberg in cautioning that the Fed bears close watching, saying a rate hike at the July 1-2 Federal Open Market Committee meeting isn't as far out of the question as most market mavens think. "That would be a surprise to the market that could send it down for a period of time, probably like March-April," when stocks lost about 10% of their value, he said. He expects the Dow to trade between 7500 and 8000 for the remainder of the year, with the small-cap
outperforming the blue-chips.
Tuesday's market action
Fast-growing Southern bank
expanded its domain, agreeing to acquire
Central Fidelity Banks
in a $2.3 billion stock deal. The merger would make Wachovia the leading bank in Virginia and would raise its national ranking to 17th from 20th. Central Fidelity leapt 5 7/8 to an all-time high of 37 13/16 and Wachovia dipped 11/16 to 61 15/16.
PacifiCare Health Systems
hemorrhaged 18 7/8, or 22.1%, to 66 3/4 after it said it would miss second-quarter earnings estimates by an undisclosed amount. The
24-analyst consensus estimate is $1.16 per share. Several firms chopped their ratings on PacifiCare, including
. Other health-care providers slid in broad sympathy early, but many recovered.
Aetna U.S. Healthcare
gained 1 1/8 to 108 1/8,
Oxford Health Plans
gained 3/16 to 73 3/8,
lost 1/8 to 54 1/8 and
WellPoint Health Networks
lost 1 3/8 to 46 1/4.
Drug stocks were some of the Street's top performers today, with a variety of news items moving the group.
soared 8 5/8 to an all-time high of 39 after its Flt3 ligand compound was found effective in boosting anticancer cells.
gained 8 3/8 to an all-time high of 84 3/4 after a
Food and Drug Administration
panel approved the company's Taxol treatment for Kaposi's sarcoma.
Johnson & Johnson
advanced 2 3/16 to 66 3/16 despite the FDA's rejection of its Liazal prostate-cancer treatment. Other big gainers included
, up 4 1/2 to an all-time high of 103 1/8,
, up 3 15/16 to an all-time high of 109 15/16, and
, up 4 3/8 to an all-time high of 115 5/8. Going the other way,
imploded 5 1/2, or 59.5%, to 3 13/16 after stopping enrollment of new patients for trials of its Cerestat stroke drug.
bounded 4 1/8 to 91 7/8 after Morgan Stanley upped its price target on the company to 105 from 93.
bounced 1 7/8 to 50 1/8 on the formal introduction of its new series of products, including the Oracle8 database-software package, a network-computer server and a "network-in-a-box" hardware-and-software package.
Auto insurance company
agreed to be acquired by a unit of
General Motors Acceptance Corp.
, itself a unit of
, for $550 million. Integon surged 8 15/16 to a four-year high of 24 15/16. GM gained 1 1/2 to 56 3/4.
Liar, liar, underground tanks on fire.
Federal Trade Commission
probe by agreeing to run a series of ads recanting its past claims that high-octane gasoline makes cars run more efficiently. So much for putting a tiger in your tank. Exxon spent most of the session underwater but jumped on the market's upswing, finishing up 3/4 at 62 1/2.
declined 7/8 to 35 1/2 after
Deutsche Morgan Grenfell
downgraded the stock to hold from accumulate.
was slashed 3 3/8 to a 52-week low of 8 9/16 after saying it expects to report second-quarter earnings of 5 cents to 8 cents per share. The First Call two-analyst outlook called for 19 cents versus the year-ago 17 cents.
took aim at the airline industry today, downgrading a fleet of stocks on concerns about earnings momentum and rising costs. The firm cut
Delta Air Lines
Midwest Express Holdings
to outperform from buy. It lowered
(CAI.B:NYSE) to neutral from buy. It cut
to neutral from outperform. US Airways lost 7/8 to 34 1/8, Delta lost 7/8 to 85 7/8, UAL lost 7/8 to 72 7/8, Continental lost 5/8 to 34 1/4, AMR lost 1 5/16 to 92 1/16 and Southwest lost 1/8 to 26 1/4. Midwest Express rose 1/2 to 27 1/4, America West rose 1/16 to 14 9/16, Reno Air was unchanged at 7 7/16 and Alaska Air was unchanged at 25 1/4. (Midwest Express was the focus of an upbeat Wing Tips column in
(QWST:Nasdaq) debuted strongly, jumping 6, or 27.3%, to 28 in its first day of trading.
formed a new jointly owned company,
, to offer natural gas and electricity,
phone services and
home-security services. Utilicorp rose 1/2 to 27 3/4, Peco slipped 1/16 to 20 7/16, AT&T added 11/16 to 36 15/16 and ADT improved 7/8 to 33 3/4.
fell 1 3/16 to 38 3/16 after pricing a secondary offering of 3 million shares at $38 each.
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