SAN FRANCISCO -- Anyone who thought
yesterday's setback augured more weakness for tech stocks got a comeuppance today. But those enchanted with the group's midday spike also got a jolt. Techs struggled for much of the afternoon before closing a somewhat disjointed session with a flourish.
Nasdaq Composite Index
traded as high as 3186.57 around 1:15 p.m. EST before reversing to as low as 3132 in the final hour. But the tech-infused index closed up 30.92, or 1%, to 3155.96, establishing a record for the eighth time in the past nine sessions.
It was almost as if tech favorites had a delayed reaction to the bond market's retreat, which itself was tempered by the close. Once as low as 100, the price of the 30-year Treasury bond finished off 10/32 to 100 13/32, its yield rising to 6.09%.
The bond market's initial setback followed the release of the
Producer Price Index
. At 0.1%, the PPI was in line with expectations. But the core rate, which excludes food and energy, exceeded forecasts of a 0.1% rise, coming in at 0.3%.
The Comp got a boost from bellwethers such as
, up 7.1% after posting earnings
last night and receiving positive analyst comments today. Cisco paced the
, up 1.2% to its own all-time high of 2797.71.
Philadelphia Stock Exchange Semiconductor Index
also set a new high, up 3.5% to 640.81.
Tech gauges got a lift from the disk-drive industry after
announced a price hike.
Banc of America Securities
upgraded Maxtor, which rose 20.7%, as well as
, up 2.2%, and
Quantum Hard Disk Drive Group
, which jumped 17.7%.
Morgan Stanley High-Tech 35
also set a new high, up 2.3% to 1443.50, as
New York Stock Exchange
-traded names such as Seagate and
(also a SOX component) joined their over-the-counter brethren on the upside.
TheStreet.com Internet Sector
index failed to join its counterparts in record territory, falling 4.41, or 0.5%, to 834.60. But
Red Hots index rose 6.41, or 2.3%, to 291.87. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.
Dow Jones Industrial Average
never displayed the effervescence of tech proxies, falling 19.58, or 0.2%, to 10,597.74 after trading as high as 10,654.63.
Ironically, weakness in tech components
weighed on the Dow.
Fueled largely by tech stocks and energy names, the S&P 500 rose as high as 1379.26 before closing up 8.18, or 0.6%, to 1373.46. The
American Stock Exchange Oil & Gas Index
rose 2.3%, led by
Royal Dutch Petroleum
, up 3.9%.
Financials such as
, down 2%, restrained blue-chip proxies; the
Philadelphia Stock Exchange/KBW Bank Index
slid 1.5%. Also,
was halted down 11.2% late in the session; after the close, the company cut its 1999 earning estimates and postponed a Nov. 15 meeting with analysts,
While some saw a bifurcated, uncertain session, Ned Collins, executive vice president of U.S. stocks at
Daiwa Securities America
, saw reasons for those long to smile.
"My feeling is with the PPI, the fact you had a ton of money invested in new issues, and the fact we've been up in the over-the-counter market for quite some time, the market acted extremely well," Collins said.
It was a big day for new issues, led by the biggest IPO yet,
United Parcel Service
, which rose 34.5% from its $50 offering price. (
joint newsroom covered the action in a
story this afternoon.) Also, Microsoft spinoff
rose 281%. Elsewhere,
Next Level Communications
rose 155% from its offering price and
"People probably did sell Microsoft today to buy Expedia and obviously some stocks were sold to pay for UPS," the trader said. "So when you think we were down 19 on the Dow and up 30 on the Nasdaq, all in all the market gave a helluva performance."
On the Cusp
As impressive as the recent gains by tech proxies have been "we need to broaden participation, along the lines of finding companion a leadership group to go a long tech," said Greg Nie, chief technical analyst at
First Union Securities
in Chicago. "I'm still bullish overall, but feel like we have to keep one eye on tech and Internet
stocks getting a little stretched out. Yesterday's retreat was predictable; we are extended short-term."
Today's gains aside, the technician said yesterday's setback on record Nasdaq volume was "mildly disturbing."
In general, market internals have improved "significantly" since the mid-October lows, Nie said. "It's all about momentum, which has been there frequently enough to get the rally started. Now it's about consistency and staying power."
Rather than focusing on particularly levels for major averages, Nie said a combination of strong volume -- more than 900 million shares on the NYSE and more than 1.2 billion on the Nasdaq -- and at least 2-to-1 positive breadth is necessary to propel the rally further.
"Today we're making a nice push on the volume side but advance/decline is marginally negative," he said. "We need some improvement there. One more good push from the bulls might be enough to catapult this recovery into January. It's literally on the cusp of taking the next step from recovery to rally. For a technician that's two different worlds: A recovery may be a contratrend. A rally is the real deal."
In NYSE trading, 984.8 million shares were exchanged while declining stocks led advancers 1,399 to 1,623. In
Nasdaq Stock Market
action 1.435 billion shares traded -- the third-busiest day in Nasdaq history -- while gainers led 2,083 to 1,921. New 52-week lows outpaced lows 118 to 65 on the Big Board while new highs led 204 to 98 in over-the-counter trading.
Among other indices, the
Dow Jones Transportation Average
rose 16.83, or 0.6%, to 3006.24; the
Dow Jones Utility Average
slid 2.15, or 0.7%, to 297.33; the
gained 2.44, or 0.6%, to 448.72; and the
American Stock Exchange Composite Index
added 3.50, or 0.4%, to 815.81.
Elsewhere in North American equities, the
Toronto Stock Exchange 300
gained 73.87, or 1%, to 7366.45 and the
Mexican Stock Exchange IPC Index
added 96.46, or 1.6%, to 5963.84.
Wednesday's Company Report
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.
put options fetched big prices this afternoon amid swift-moving rumors the company might cancel its Nov. 15 analyst meeting, two investors and two options traders told
during the session.
After the close, the rumors proved true: Bank One canceled that meeting and lowered its 2000 earnings estimates to $3.45 to $3.55 a share.
Bank One shares were halted late in the session, last down 4 3/8, or 11.2%, to 34 5/8. They reportedly tumbled to 32 1/2 in after-hours action.
One of the investors, a New York hedge fund analyst who requested anonymity, had said he thought Bank One might guide analysts to a lower earnings-per-share number for 2000. Due mainly to sluggishness in its credit-card division,
, Bank One would probably earn $3.60 a share next year, rather than the $3.88 forecast by
First Call/Thomson Financial
, said the analyst, whose fund has no position in Bank One shares.
Bank One did not immediately return calls seeking comment.
"It's creating a panic in the stock because
did the same thing," said one options trader on the
. Bank One is a multibank holding company. Another options trader in Chicago cited a rumor the company would announce some negative news after the close of trading.
More than 3,000 November 35 puts had traded by late afternoon, nearly equal to the open interest in the options, and the put option price had ratcheted up 7/8 ($87.50) to 1 1/16 ($106.25) per contract. (In other words, investors were more willing to pay up to make bets the stock will fall.) Investors also piled out of December 35 calls, the price of which had dropped nearly by half to 2 9/16 ($256.25).
Orders for put options were "coming from all different sorts of firms," indicating more interest than just retail investors, said the Pacific Exchange trader.
Erin Arvedlund and Peter Eavis
Mergers, acquisitions and joint ventures
rose 1 1/8 to 72 and
shot up 9 7/16, or 29.9%, to 41 after the companies set a strategic relationship under which NextCard will be the exclusive provider of a co-branded Amazon.com NextCard credit card. Amazon also has obtained a warrant to acquire up to 4.4 million shares of NextCard stock, a stake of about 9.9%. Amazon was in the news yesterday after saying it was launching four online stores.
joint newsroom wrote about the move in a story
also wrote about the news in a column
slipped 3/4 to 49 1/16 and
fell 3 7/16 to 317 3/4 after the companies said they were in a deal to provide content for a portal. The alliance will provide CNet technology through a Commerce One market site.
A new joint venture company involving an Irish consortium and
said it planned to compete in Ireland's deregulated electricity market beginning in February. The company, known as
, said it would invest $264 million over the next three years. Shares of GPU fell 1/4 to 32 13/16.
was unchanged at 35 after it announced it has brought
on board to serve as financial advisors for its unsolicited $75 billion bid for
. Shares of Warner climbed 2 to 92 1/16.
Earnings/revenue reports and previews
climbed 1 1/8 to 13 13/16 after saying it expects to return to profitability in 2000 and that sales and license revenue were improving in the fourth quarter,
jumped 5 1/4, or 7.1%, to 79 1/2 after posted first-quarter earnings of 24 cents a share last night, beating the 32-analyst estimate by a penny and above the year-ago 17 cents. Yesterday Cisco said it was purchasing rival
in a $799 million stock swap. Shares of Aironet were still on a high today, closing up 3 3/16,oe 7%, to 48 1/2.
joint newsroom wrote about Cisco's
earnings and its
acquisition of Aironet in stories yesterday.
fell 3/16 to5 11/16 after it said it has adjusted its first-quarter 2000 earnings downward, to reflect the sale of certain extended service plans. The company is now posting a revised first-quarter loss of 4 cents a share, a penny more than previously stated.
Federated Department Stores
climbed 1 7/16 to 43 1/16 after it reported third-quarter earnings of 56 cents a share, beating the 18-analyst estimate of 53 cents a share and the year-ago 50 cents a share.
inched up 3/16 to 9 3/4 after it reported third-quarter earnings of 9 cents a share, missing the 13-analyst estimate by a penny but up from the year-ago 8 cents a share.
New Plan Excel Realty
slipped 1/16 to 16 1/2 after it reported third-quarter funds from operations of 51 cents a share. Last week, the company announced it would report FFO below the consensus estimate, in the range of 51 cents to 52 cents a share. The current First Call/Thomson Financial estimate by 11 analysts was for 53 cents, while the year-ago funds from operations were 54 cents a share.
fell 1/8 to 23 7/8 after it posted third-quarter earnings of 60 cents a share, beating the single-analyst estimate by a penny and up from the year-ago 34 cents.
stepped up 1 3/16 to 43 3/16 after it reported third-quarter earnings of $1.11 a share, in line with the seven-analyst estimate and up from a year-ago 98 cents a share.
lost 1/16 to 12 3/16 after it reported third-quarter operating net of 7 cents a share, falling short of the five-analyst estimate of 15 cents a share but up from the year-ago 6 cents a share. The company said it expects to achieve $105 million in cost savings by the end of next year.
Rite Aid dropped 2 9/16, or 32.3%, to 5 3/8 after it cautioned investors not to follow its previously stated profitability and cash flow outlook announced on Oct. 11 and canceled a planned conference call with analysts. The announcement comes after a prior statement that the
Securities and Exchange Commission's
enforcement division had contacted Rite Aid to address its plans to scratch $500 million in pretax earnings from the past three years in a restatement.
edged up 7/8, or 14.4%, to 6 15/16 after it reported third-quarter earnings of 33 cents a share, in line with the nine-analyst estimate but lower than a year-ago 46 cents a share. The company said it sees a fourth-quarter charge due to job cuts and unit sales. Sierra said recapitalization was not in its shareholders best interests and said it would proceed with a previously announced share buyback plan.
fell 2 3/16, or 12.3%, to 15 9/16 after it reported third-quarter earnings of 44 cents a share, missing the 10-analyst estimate of 47 cents and down from the year-ago 49 cents. Last night,
joint newsroom covered Waste Management's
third-quarter earnings report.
Offerings and stock actions
wrote about the United Parcel Service IPO in a story
last night, and
joint newsroom reported on UPS, Expedia and other IPOs in a
was unchanged at 37 after it said it has set a shareholders' rights plan, in an effort to shield investors from an unsolicited takeover bid. Abbott spokeswoman Rhoda Luniak said the plan is not a reaction to any certain offer. The plan calls for shareholders to receive one preferred stock purchase right per Abbott share, with the rights being exercisable only if a person or group purchases 10% or more of Abbott's stock or a tender offer or exchange offer is announced.
has decided to ax its IPO plans, citing unfavorable market conditions. Merrill was expected to price Centerprise Advisors' 10.5 million-share IPO on Wednesday in a price range of $11.50 to $13.50 a share.
bounced 4 13/16, or 6%, to 84 1/4 after it set a 2-for-1 stock split of its common shares. A stock dividend will be distributed on Dec. 9 to shareholders of record on Nov. 24.
board approved a 3-for-2 stock split. Dataram's shares hopped 7/8 to 19 3/8.
Online wedding Web site
has set a 3.5 million-share IPO, which is expected to price in the range of $8 to $10 a share. Credit Suisse First Boston is serving as the deal's lead underwriter.
Merrill cut its rating on
to near-term neutral from accumulate. Allied Waste fell 7/8, or 9.4%, to 8 3/8.
Credit Suisse First Boston
upped his rating on
American Home Products
to buy from hold. AHP bounced 2 to 54 7/8.
Warburg Dillon Read
at buy. American Standard climbed 1/16 to 38 7/16.
Banc of America initiated coverage of MGM
with a strong buy rating and a price target of 27. MGM popped 2 13/16, or 13.7%, to 23 5/16.
Bay View Capital
to intermediate-term accumulate from intermediate-term neutral and long-term buy from long-term accumulate. Bay View Capital added 1 3/16, or 8.4%, to 15 1/4.
Merrill Lynch upped its price target on electronic manufacturing service stocks including
to 76 from 62,
to 77 from 62 and
to 91 from 82. Shares of Celestica climbed 6 5/16, or 10%, to 69, while Solectron shares jumped 4 1/4, or 5.1%, to 86 3/4. Jabil mounted 3 3/4, or 5.9%, to 66 3/8.
raised its price target on
Electronic Data Systems
to 75 from 70 a share. Shares of EDS hopped 2 3/16 to 65 9/16
to strong buy from buy and set a price target of 150. Shares Inktomi soared 6 1/4, or 5.3%, to 122 1/2.
Salomon Smith Barney
raised it price target on
to 85 from 70. Lehman Brothers gained 2 13/16 to 74 9/16.
upped its intermediate-term opinion on
to buy from accumulate. Methode shares rose 3 1/2, or 17.1%, to 24.
to strong buy from buy. QLT said yesterday that its losses widened in the third quarter because of higher marketing costs. QLT hopped 1 5/8 to 36 1/4.
Banc of America raised its ratings on Seagate and Maxtor to buy from market performer. Seagate shares gained 3/4 to 35 1/2, while Maxtor mounted 1, or 20%, to 7 1/8.
Credit Suisse First Boston upgraded shares of
to buy from hold. Shares of Stanley Works added 15/16 to 30 3/8.
Donaldson Lufkin & Jenrette
raised its rating on
to buy from market perform. Yesterday, shareholders approved a plan to create a separate tracking stock for Staples.com. Shares of Staples hopped 2 9/16, or 14.7%, to 20.
Banc of America upped its price target on
to 125 from 60. Visual Networks soared 8, or 13.1%, to 68 15/16.
announced its plans to slice its workforce by 10%, cutting 4,000 non-agent jobs in an effort to save $600 million a year. The insurer said it would assume a $100 million fourth-quarter restructuring charge and another $100 million charge for fiscal 2000. Allstate rose 5/8 to 30 1/2.
announced a restructuring plan under which it will cut 200 jobs. The plan, which includes new initiatives focused on the Internet and advanced work group solutions, is expected to produce annual cost savings of about $20 million. Avid will take a charge of between $9 million and $10 million in the fourth quarter related to the revamping. Avid Tech mounted 3/8 to 12.
this morning unveiled a new corporate Internet-access PC priced at $499. Compaq expects the new machine, called the iPaq (sound familiar?), to account for at least 15% of the corporate computers it sells over the next year. Shares of Compaq gained 1 1/4, or 6%, to 22.
said its co-CEO David Browne has resigned effective immediately. Luxottica retreated 1 3/4, or 9.5%, to 16 1/2.
CEO Bill Gates told shareholders at Microsoft's annual meeting that the company was willing to go "a long way" to satisfy government requirements in its ongoing federal antitrust case. Microsoft sank 1 3/4 to 87 1/8.
joint newsroom wrote about the antitrust suit in a
story this afternoon.
An explosion at a
refinery about 40 minutes from Los Angeles sparked a major fire late Tuesday, sending plumes of smoke billowing hundreds of feet and temporarily closing nearly schools and a freeway before it was contained. Shares of Tosco nevertheless added 1 7/8, or 6.9%, to 28 11/16.
Overshadowing the bad news for the refinery were upgrades Wednesday morning from
No injuries were reported in Tuesday's fire, the second major fire at a Tosco refinery this year. Tosco was fined over $810,000 by the federal
Occupational Safety and Health Administration
in August following its investigation into alleged violations which led to the February fire that killed four. The cause of Tuesday's fire is under investigation.