A tepid bounce lost what little spring it had, and major proxies (away from the Net) were fighting to keep a hold on their gains. Stocks looked like they were bracing for another choppy ride.
After staging a minimal relief rally to 10,334.74, the
Dow Jones Industrial Average
got tired and gave up. Lately it was up 20 to 10,295, while the
Nasdaq Composite Index
was up 11 to 2767.
"I don't think we're out of the woods yet," said James Maguire Jr., a
New York Stock Exchange
, making what turned out to be an accurate prediction while the Dow was hanging on to a measly 50-point gain. "There's going to be a little more frenzied selling and an eventual retesting of those lows," he said, referring to yesterday's more-than-200-point drop. "We haven't really seen the panic selling yet."
Earnings disappointment warning from consumer product giant
certainly weren't helping the market's already bruised ego. Gillette fell 9.6%, while Avon sank 26.2%. The
Morgan Stanley Consumer Index
dipped 0.3% to 500.96.
Rumors of gold stock
short-selling seem to have quieted a bit. Spot gold fell to $301.50 in New York trading after a $320 peak in London earlier. The
Philadelphia Stock Exchange Gold & Silver Index
was down 4.3% to 82.45, after closing yesterday at 86.18.
But the big news now is the big picture as far as the stocks are concerned, with many traders and analysts anticipating that the mild bounce will be followed by more nerve-wracking declines. "This is a corrective rally and when it's done it will give way to lower levels," said Steve Hochberg, co-editor of the
Elliott Wave Financial Forecast
Hochberg points to the progression of sectors that have peaked and were then "taken out to the woodshed" as an ominous pattern. Starting in 1997 with new yearly highs peaking on the Big Board, Hochberg cited the April 1998 peak in the
and the July
peak, among others, ending with the Dow in late August. "This rolling progression of markets that are in sync to the downside is typical of a bear market. It's funny to see how many people are afraid of saying it but major averages are" indicating it, said Hochberg. "We are not done on the downside."
Indeed, Maguire said yesterday's turnaround in the Dow, when it quickly recouped most of its more-than-200-point drop, was due at least partly to fear of breaking the psychologically important 10,000 support level. It "got right near that level but it became apparent we were not going to go through that line in one shot," said Maguire.
On the Big Board breadth was pretty decent, with advancers beating decliners 1,561 to 1,275 on 486 million shares, while on the
Nasdaq Stock Market
laggards were beating leaders by a hair, 1,795 to 1,790, on 611 million shares. New 52-week lows were trouncing new highs on the NYSE 145 to 29, and new lows were ahead of new highs 75 to 46 on the Nasdaq.
The small-cap Russell 2000 was up 3 to 421, while the S&P 500 was up 2 to 1284.
TheStreet.com Internet Sector
index was surging 21, or 3.4%, to 653, helped along by
, flying 19.8% after announcing new merchandising strategies.
The benchmark 30-year Treasury bond was down 15/32 to 100 1/32, its yield at 6.13%. (For more on the fixed-income market, see today's early
Tuesday's Midday Watchlist
Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.
Amazon.com was soaring 13 1/16, or 19.8%, to 79 after it said it would introduce new features on its online shopping site, in an effort to maximize merchandise, allow customers payments to small businesses and upgrade the search for products on the Web.
CEO Jeff Bezos said at a press conference that new options include
, which allow anyone to sell products on the site, while
will enable shoppers to pay small businesses through Amazon. In addition, the site plans to offer an advanced search engine that will link buyers to sellers throughout the Internet. Bezos said that Amazon will charge the zShop merchandisers $9.99 per month to sell their products, while asking for 2% to 5% of the purchase price for each sold product. Shoppers will have access to the new features tomorrow.
took a look at the Amazon news in a
story this morning.
Gillette was falling 3 9/16, or 9.6%, to 33 7/16 after it warned investors that, although third-quarter earnings are in line with analysts' consensus estimates of 32 cents a share, it expects to post a 1% decline in sales, citing slow economic conditions and unfavorable exchange rates in Latin America and Western Europe. Earlier today,
Salomon Smith Barney
cut its rating on Gillette to neutral from outperform, while
lowered its ratings to near-term neutral, long-term accumulate from near-term accumulate, long-term buy.
Mergers, acquisitions and joint ventures
got shareholders' stamp of approval for its planned merger with
. Shares of AK Steel were up slightly to 17, while Armco was climbing 1/8 to 6 9/16.
El Paso Energy
, which was advancing 1 1/16 to 38 11/16 and
, which was mounting 1 3/16 to 38 7/16, were awarded approval from the
Federal Energy Regulatory Commission
for their planned merger, becoming the country's largest natural gas distributor. The transaction, which was announced in March, calls for El Paso to buy Sonat for $4 billion in stock, while taking on roughly $2 billion of Sonat's debt.
was slipping 3/4 to 31 1/4 after it said it has forged a three-year, $340 million agreement with Canada's wireless provider
. The deal, which calls for use of time-division multiple access technology, would guarantee Rogers's role in introducing Canada's first third-generation cellular network.
said in has joined with
to provide Oracle's applications to Britain's process and discrete manufacturing markets. Shares of Oracle were hopping 1 1/4 to 44 1/8.
was bouncing up 2 1/4 to 100 1/8 after it said that it agreed to sell to
its 30% stake in their European petrol-stations joint venture in order to win regulatory approval for its merger with
. BP Amoco will pay about $1.65 billion for the stake. Shares of BP Amoco were popping 1 3/16 to 107 7/16.
was declining 5/16 to 34 11/16 after it said it would acquire financially strapped candy company
Favorite Brands International
in a deal valued at $475 million. Nabisco said it would add Favorite Brands, which filed for Chapter 11 bankruptcy protection in March, to its
confections division, an arm of
was rising 1/8 to 29 1/8 after it inked a three-year deal with
, which was sinking 3 3/8 to 91 13/16, to jointly provide an Internet-based data storage system, which would supply customer data back-up and recovery, storage utility services for Internet Service Providers and disaster recovery services. The joint venture, which is set to begin in the fourth quarter, could mean $1.5 billion in revenues for Qwest.
was up 1/16 to 100 3/4 after it said it was considering a possible sale of a unit of its Component Division, but said there were no grounds for fears about job losses.
Earnings/revenue reports and previews
Avon was plummeting 9 3/8, or 26.2%, to 26 5/16 after it said that it was on track to meet analysts' third-quarter consensus estimate of 34 cents a share, but warned that it expects fourth-quarter earnings to match or slightly beat the year-ago 56 cents, greatly missing the consensus estimate of 63 cents. Earlier today,
cut the shares to neutral from attractive.
was unchanged at 4 1/2 after it said it expects a 1999 net loss of between $47 million to $51 million, or $1.15 to $1.25 a share. The company said it would delay reporting results due to restructuring and job cuts.
was advancing 15/16 to 26 5/16 after it said it is on target to meet estimated 10% 1999 production growth and said it expects third-quarter earnings per share to be 4 cents to 7 cents higher than the 18-analyst estimate of 33 cents a share.
was falling 1/8 to 8 5/16 after it reported second-quarter earnings of 21 cents a share, above the single analyst-estimate of 15 cents a share and up from a year-ago 10 cents, including a pretax gain. Topps said the distribution of
cards added about 5 cents a share in earnings in the latest quarter.
Offerings and stock actions
was slipping 1/8 to 57 11/16 after it said that it anticipates the family of chairman and CEO John Rigas to purchase 2.5 million class B common shares of its stock. The latest purchase locks in the family's already 30% economic stake in the company. According to a spokesman, the company currently controls more than 50% of the company's voting rights.
was jumping 3 5/8, or 30.25, to 15 11/16 in its first day of trading. The IPO priced at $12 per share.
was rising 5/8, or 5.6%, to 11 7/8 after it said the company and its CEO Gerard Guez will buy back 2 million of the company's 15.8 million shares.
was climbing 15/16, or 6.75, to 15 after it made its trading debut. The offering was priced at $14 per share.
was mounting 1/16 to 10 13/16 after it set a share repurchasing plan for up to 9% of its outstanding shares.
was sliding 2 3/8, or 6%, to 37 5/8 after
Deutsche Banc Alex. Brown
lowered its rating on the stock to buy from strong buy.
was soaring 5, or 9.5%, to 58 1/4 after
upgraded it to attractive from neutral.
was off slightly to 9 1/8 after
Credit Suisse First Boston
cut its rating to hold from strong buy.
was declining 1 11/16 to 121 13/16 after Merrill Lynch axed the stock from its Top 10 list of technology stocks but reiterated a buy rating.
Rohm and Haas
was popping 1 13/16, or 5.4%, to 35 3/8 after Lehman upgraded the shares to a buy from outperform, citing its current attractive price level.
was advancing 11/16 to 22 1/4 after
raised to it to buy from neutral.
was bouncing 1/16 to 30 7/16 after Salomon Smith Barney initiated coverage of the stock with an outperform rating.
was leaping 5 to 232 after
analyst James Ross said he is anticipating subscribers numbers to hit a record 2.7 million worldwide, reported in
was advancing 11/16 to 67 13/16 after it filed with the
Federal Communications Commission
to provide long-distance service to New York. Approval would make Bell Atlantic the first regional Baby Bell to enter the $80 billion long-distance market since the breakup of
15 years ago. Shares of AT&T were was climbing 1/2 to 44 1/4.
was hopping 7/8 to 49 7/8 after it said its CEO James Henderson will retire at the end of the year. President and COO Theodore Solso, a 28-year veteran of the company, will succeed Henderson.
United Auto Workers
reached a tentative agreement on a new contract. The union also reached a separate tentative deal with
Delphi Automotive Systems
, the former GM parts unit that was spun off earlier this year. Shares of GM were skidding 9/16 to 61 1/8.