yesterday was one for the record books, today was one for the filing cabinet.
Nasdaq Composite Index
managed to scratch out another new record but closed well off its best levels of the session. Meanwhile, the
Dow Jones Industrial Average
each retreated modestly from respective all-time highs, despite another impressive bond-market advance.
The price of the 30-year Treasury bond rose 30/32 to 96 1/32, its yield falling to 5.52%.
The Nasdaq Comp rose as high as 2582.37, then slid as low as 2544.04 before recovering to close up 3.11, or 0.1%, to 2563.17.
embodied the Nasdaq's experience, gaining 8.3% to an all-time high of 140 5/8, but off its lofty intraday best of 145.
Other bellwethers such as
notched solid gains. But the
fell fractionally thanks mainly to weakness in
, down 6.2%, and
, which fell 3.1%.
The Wall Street Journal
reported MCI WorldCom is in "preliminary" talks to acquire
, which fell 1%.
Yesterday, you'll recall,
jumped 26.1% after
reported WorldCom could acquire the wireless messaging company. Today, Skytel lost 6.6%.
New York Stock Exchange
trading tech stalwarts were similarly mixed, leaving the
Morgan Stanley High-Tech 35
rose 9.4%, and
gained 4%, but
slid 2.2% and
Internet proxies, meanwhile, found little resistance on their way to a second consecutive session of new highs.
TheStreet.com Internet Sector
index gained 37.54, or 5.5%, to 720.66 while
TheStreet.com E-Commerce Index
climbed 0.15, or 0.1%, to 123.38.
The DOT was led by
, which rose 26% after
Donaldson Lufkin & Jenrette
initiated coverage with a buy rating and a price target of 250.
, which rose as high as 244 on word its offerings will be featured on certain PCs sold by
, closed down 2% to 214 7/8.
managed to sustain its daily routine of hitting a new high, closing up 0.3% to 167 7/16, but faltered from its intraday high of 175 1/2.
The Dow industrials closed down 43.84, or 0.4%, to 9963.49 after rising as high as 10,030.37.
exerted the greatest drag on the index while lagging the performance of their financial peers.
'Everyone is talking about the market setting new highs on increasingly worse breadth and increasingly narrow stock selection, and that finally caught up with us,' said D.A. Davidson's Jim Volk.
was the Dow's best performer, rising 4% after
reported a record 13.6% rise in light vehicle sales in March.
The S&P 500 slid 3.23, or 0.2%, to 1317.89 after rising as high as 1326.76. The
fell 1.12, or 0.3%, to 401.08.
Blue-chip proxies were restrained by
last night's profit warning by
, which fell 13.4%.
But rather than any fundamental development, today's blue-chip setback was "more a matter of the market getting to 10,000, stopping, and having nothing to follow through on in terms of positive news until we see earnings," said Jim Volk, co-director of institutional trading at
in Portland, Ore. "Everyone is talking about the market setting new highs on increasingly worse breadth and increasingly narrow stock selection, and that finally caught up with us. I can't see any other reason."
Market internals were worrisome again today.
In NYSE trading, 787.5 million shares were exchanged as losers led gainers 1,766 to 1,185. In
Nasdaq Stock Market
activity a hefty 1.12 billion shares were exchanged while declining issues led 2,423 to 1,573. New 52-week lows bested new highs 93 to 69 on the Big Board and by 157 to 117 in over-the-counter trading.
Volk noted prominent market watchers such as Elizabeth MacKay of
have recommended scaling back equity allocation in recent days, contributing to some investors' hesitation. Also, the bond market has "done a flip-flop from being nervous last Thursday to feeling positive about inflation," causing some momentum players to switch assets into fixed-income, he said.
Trouble Ahead, Trouble Behind
While most market watchers were sanguine about the session, particularly after yesterday's big advance, Hugh Johnson, chief investment officer at
, was nonplussed.
"I think it's hard to be very sensible about the market these days," he said. "What's troubling is the way we get to 10,000 -- we seem to reach it in a blowoff of exuberance. Everybody knows there's too much optimism
and the stock market is pricey or overvalued. Then there are these divergences, which occurred even yesterday. In order to get the market going on a sustained basis, you have to have buyers, and at these levels they have to have courage."
Johnson, who has retrenched his equity exposure considerably in recent months, was particularly discouraged by the action today in Gillette, which he is long.
"To look at the stock, you would have thought they said earnings would be 1 cent per share and well below analysts' estimates of 25 cents," he said. "The biggest surprise is Gillette said earnings will only be 1 cent below current consensus. I'm inclined to believe they would have been better off announcing the earnings than preannouncing a disappointment."
The fact Gillette got so hammered on a penny-per-share shortfall "dramatizes the vulnerability" of the market, Johnson continued.
"What Gillette did is remind you we're starting earnings season and a stock can get crunched, as unjustified as that might seem to men of common sense," he said. "Gillette also reminded us that in a momentum-driven market it works two ways. There's momentum on the upside and on the downside. This is not the stuff out of which stable bull markets are made, period."
Among other indices, the
Dow Jones Transportation Average
fell 28.28, or 0.8%, to 3325.12; the
Dow Jones Utility Average
lost 3.66, or 1.2%, to 293.57; and the
American Stock Exchange Composite Index
slid 6.03, or 0.8%, to 715.21.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
rose 28.81 to 6768.51 and the
Mexican Stock Exchange IPC Index
gained 44.85, or 0.9%, to 5146.79.
Tuesday'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.
Gillette tripped down 7 3/4, or 13.4%, to 50 after last night warning it expects to post a mid-single-digit percentage increase in first-quarter earnings, leaving results about a penny below the 16-analyst outlook for 25 cents a share. The company, which earned 23 cents in the year-earlier period, said greater-than-anticipated softness in the
business and in Latin America will hurt results. Today,
Morgan Stanley Dean Witter
downgraded the stock to neutral from outperform, Donaldson Lufkin & Jenrette lowered it to market perform from top pick and
Brown Brothers Harriman
dropped it to short-term neutral from buy.
Internet companies, meanwhile, continued to work more deals and watch their stocks explode.
jumped 11 11/16, or 32.6%, to an all-time high of 47 9/16 after announcing an agreement making it one of the largest providers of RealNetworks' online video and audio streaming architecture on the East Coast. After, as noted above, DLJ started coverage of the stock with a buy and price target of 250 a share, RealNetworks swelled 40 1/8, or 26%, to an all-time high of 195 7/16.
shot up 18 3/16, or 20.1%, to 108 13/16 after it and
Sci Fi Channel
announced an exclusive agreement to sell
Star Wars Episode I
merchandise at a co-branded Web site. Terms of the agreement were undisclosed. USA Networks lowered 1 3/8 to 36 1/16.
hopped up 3, or 5.5%, to an all-time high of 58 on investor enthusiasm for the company's
Web site, which reserves airline tickets, hotel rooms and car rentals. Analysts also have tied excitement about the stock to
recent IPO. Today, priceline.com picked up 3 7/8, or 5.2%, to 79.
rocketed 21 5/16, or 258.3%, to an all-time high of 29 9/16 on news
offered to sell its Internet and interactive television assets in exchange for TCI Music stock. Liberty Media lifted 3 1/8, or 5.6%, to an all-time high of 59; and Telephone lifted 2 11/16 to 80 1/8.
Yahoo! lost 4 3/8 to 214 7/8, after rising as high as 244 earlier, following news it will be featured on the default Web page on PCs sold by Micron Electronics. Micron, which added 1/4 to 11 11/16, also announced pacts with
, and concurrently launched its
technology initiative for rapid-growth, small businesses. EarthLink rose 2 9/16 to 72 9/16; 3Com lost 11/16 to 21 15/16.
Mergers, acquisitions and joint ventures
Century Business Services
lowered 3/8 to 10 11/32 after saying it's exploring options for divesting its specialty insurance division to focus on the professional outsourcing business.
popped up 3 7/16 to an all-time high of 76, continuing yesterday's push skyward fueled by news of strong online trading volume. Today, the company said
will be its primary provider of financial news and market data. Reuters tacked on 1 7/8 to 90 11/16.
Heuristic Development Group
soared 2 13/16, or 150%, to an annual high of 4 3/4 after agreeing to merge with privately held
, a developer of Internet communities. Virtual's shareholders will receive about 11.1 million Heuristic shares.
Lernout & Hauspie Speech
vaulted 5 5/8, or 14.9%, to 43 9/16 on last night's news that Intel agreed to invest $30 million in the company. Intel added 3 to 130 7/16.
shot up 4 1/2, or 66.1%, to 11 5/16 after last night
said it will buy the company for $12 a share. Columbia Energy fell 5/8 to 52 3/4.
tacked on 3/16 to 34 after announcing it's buying Liberty Media's 50% stake in
in exchange for 51.8 million nonvoting News Corp. ADRs. The company also said it plans to repurchase 56.2 million of its nonvoting ADRs from MCI WorldCom for $1.4 billion.
Earnings/revenue reports and previews
Circuit City Stores
slipped 1 3/8 to 73 7/8 after posting fourth-quarter earnings of 86 cents a share, a penny better than the 15-analyst estimate and up from the year-ago 58 cents. And
Circuit City CarMax
added 1/16 to 3 15/16 after reporting a fourth-quarter loss of 10 cents a share, 1 cent narrower than the seven-analyst outlook and narrower than the year-ago loss of 23 cents.
skidded 5 1/16, or 28.7%, to 12 9/16 after saying weakness in oilfield activities will push 1999 earnings "significantly below" last year's 71 cents a share. The three-analyst estimate called for earnings this year of 97 cents.
expanded 1 1/4 to 38 3/4 after saying it sees first-quarter earnings of 63 cents a share, a nickel higher than the eight-analyst estimate. The company, which credited its new products for the projection, made 96 cents in the year-ago period.
Genesee & Wyoming
slid 2 1/4, or 20.7%, to an all-time low of 8 3/4 after saying it expects to report a first-quarter loss of about 7 cents a share due to lower Australian grain movements and northeastern U.S. car loadings. The single-analyst view called for quarter earnings of 40 cents a share vs. the year-ago profit of 42 cents.
advanced 7/16 to 9 13/16 after announcing second-quarter earnings of 43 cents a share, a nickel above the five-analyst forecast and ahead of the year-ago 30 cents.
tumbled 11/16, or 5%, to 13 after recording second-quarter earnings of 36 cents a share, a penny higher than the five-analyst prediction but below the year-ago 42 cents.
Silicon Valley Group
, a semiconductor equipment maker, sloughed off 3/8 to 13 1/32 after warning its second-quarter revenue will be about 30% below the $85.5 million reported during the first quarter.
closed flat at 30 3/4, after rising as high as 32 15/16 earlier, following last night's news that its March same-store sales rose 6%.
tanked 2 7/8, or 30.7%, to an annual low of 6 1/2 after
BT Alex. Brown
lowered it to market perform from buy.
flourished 7 1/4, or 39.2%, to 25 7/8 after
Adams Harkness & Hill
initiated coverage with a strong buy.
excelled 3 1/2, or 10.8%, to an annual high of 36 after
started coverage with a strong buy, citing the semiconductor maker's strong bookings.
Pediatrix Medical Group
shed 2 5/8, or 15.3%, to an annual low of 14 1/2 after
U.S. Bancorp Piper Jaffray
dropped the stock to neutral from strong buy. Yesterday, Pediatrix said Arizona and Colorado government officials are seeking billing-related documents from the company.
As mentioned earlier, Sun Microsystems scored 10 3/4, or 8.3%, to an all-time high of 140 5/8 after announcing new efforts to improve its compatibility with
Windows operating system. Microsoft lost 15/16 to 94 1/16.
sank 2 3/8, or 11.2%, to 18 15/16 after detailing in
Securities and Exchange
filings risk factors associated with its acquisition of
and planned purchase of
gave up 15/16 to 183 after introducing what it called the world's largest 64-bit, four-way Web server, designed to provide e-business customers and Internet service providers with greater speed, performance and high availability.