It is amazing how problems dissolve once stock prices come down to levels people like.
Looming air strikes, earnings jitters -- these were the things people were citing a couple days ago when the market saw one of its biggest declines this year. And today? Stocks are running higher in a nice, broad-based rally as if all those problems weren't there anymore -- if they were really there to begin with at all.
Dow Jones Industrial Average
lately was up 150, or 1.6%, to 9817, while the
was up 17, or 1.3%, to 1285. Helping move those indices were good moves by bank stocks -- the
Philadelphia Stock Exchange/KBW Bank Index
was up 1.9%. Brokers, too, were doing well on the back of
Morgan Stanley Dean Witter's
good first-quarter numbers. Small-caps, atypically, were faring better than the big-cap indices. The
was up 7, or 1.7%, to 391.
But the real story was in tech. The
Nasdaq Composite Index
was up 42, or 1.8%, to 2407, pushed higher by good performances from market heavyweights
. Of the majors, only
was flashing red, down 1 11/16 to 117 1/2 in sympathy with the earnings-impaired
Internet stocks were romping.
TheStreet.com Internet Sector
index was up 30, or 5%, to 624, again breaching that oh-so-important 600 level.
TheStreet.com E-Commerce Index
was up 4, or 3.9%, to 112.
New York Stock Exchange
advancers were outpacing decliners 1,800 to 1,000 with 428 million shares changing hands. In
Nasdaq Stock Market
action, advancers were topping decliners 2,221 to 1,342 on 518 million shares.
Meanwhile, the 30-year Treasury bond was off 8/32 to 95 19/32, lifting the yield to 5.55%, in listless trade. (For more on the fixed-income market, see today's early
The first thing you think of when you see a day like this after some wrenching declines is that it might all be a head fake. But this isn't the impression one gets from the trading floors today.
"It feels better than a dead-cat bounce," said Jon Olesky, head of block trading at
Morgan Stanley Dean Witter
. "The tape today actually feels pretty good."
Olesky's sense is that, with just 4 1/2 days left, we're seeing some of the typical gaming that portfolio managers engage in at the end of the quarter. The first quarter's been a sloppy one, but it's been pretty good in balance. Time to fluff up that portfolio and look fully invested. "For a lot of managers, they're not active on the sell side," said Olesky. "If there's more urgency, it tends to be on the buy side."
But looking out farther, not everyone is pleased with the market. For Stanley Nabi, vice chairman of
Wood Struthers & Winthrop
, it comes down to something the eminent strategist
once said: You've got to get down to get up.
"The market is still in technical deterioration," said Nabi. "We're only about 2 1/2% from the highs, but if you take a look at the new highs and new lows yesterday, they were absolutely miserable. This market needs a shakeup, where everything goes down. I'm not calling for a bear market, just an 8% to 10% correction at which point it can begin to move up, but with greater breadth."
So get down, get up?
"Get down, but get up with breadth," said Nabi.
Thursday's Midday Movers
Micron Technology was falling 2 3/16 to 49 13/16 even after last night posting second-quarter operating earnings of 12 cents a share, excluding a 3-cent writedown for flat panel display assets and a charge for consolidation of PC operations in Japan. Net income came in at 8 cents. The 19-analyst
view called for a profit of 1 cent a share vs. the year-ago loss of 24 cents.
Meanwhile, Morgan Stanley Dean Witter was behaving as it should: rallying after a positive earnings release. The company was lifting 4 3/8 to 102 3/4 after posting first-quarter earnings of $1.76 a share, blowing away the 12-analyst estimate of $1.34 and moving up from the year-ago $1.10.
In other news:
Data Transmission Network
was up 6, or 36.4%, to 22 3/4 after last night saying Chairman and Chief Executive Roger R. Brodersen resigned as part of the reconstitution of its board.
was soaring 6 1/16, or 87.4%, to 13 1/16 after late yesterday the
Food and Drug Administration
granted the company approval to market
, used to treat moderate to severe vasomotor symptoms related to menopause, such as hot flashes and night sweats.
was up 15 1/18, or 10.4%, to 160 5/8 after setting a four-year marketing pact with
under which it will pay AOL $75 million. AOL was up 8 1/16, or 6.9%, to 125 1/8. Separately, eBay filed with regulators for a secondary offering of 6.5 million shares.
NationsBanc Montgomery Securities
initiated coverage of a handful of Internet companies with buy ratings, including AOL;
, which was up 8 5/16, or 6.7%, to 132; and
, which was up 9, or 5.6%, to 169 13/16.
was up 13, or 10.7%, to 134 1/4 after
ING Baring Furman Selz
began coverage with a buy.
was up 2 1/4 to 171 3/4 after
The Wall Street Journal
said the company disclosed a pretax loss of nearly $1 billion from its PC business last year, prompting renewed calls for Big Blue to exit the PC market. Separately, IBM and
Telefonica de Espana
announced a multiyear deal worth billions of dollars. Telefonica was up 3 1/2 to 133.
was up 1/2, or 30.8%, to 2 1/8 after last night saying it will close 60 to 70 stores in fiscal 1999 and that it's considering selling products over the Internet. The company also reported fourth-quarter earnings of 27 cents a share, below both the two-analyst estimate of 46 cents and the year-ago 31 cents.
Mutual Savings Bank
was up 2 7/8, or 30.1%, to 12 7/16 after last night
agreed to acquire the company in a stock swap valued at $14.60 a share. Mutual Savings shareholders will receive 0.8 of an Independent Bank share for each share held. Independent Bank was down 13/16 to 17 9/16.
O'Sullivan Industries Holdings
was up 1 5/8, or 14.4%, to 14 7/16 after last night saying a senior management group made a proposal to buy the company. The company hired Salomon Smith Barney to explore and evaluate options.
was up 8 1/16, or 9.2%, to 95 3/8 after it and
resolved their disputes on code division multiple access technology. The companies agreed to support a single-world CDMA standard and Ericsson agreed to buy Qualcomm's terrestrial CDMA wireless infrastructure business. Ericsson, bouncing back from yesterday's profit warning, was up 1 13/16, or 8.6%, to 22 13/16.
was down 5 11/16, or 16.1%, to 29 3/4 after
Credit Suisse First Boston
downgraded the stock to hold from strong buy and
dropped it to attractive from buy. The company issued a third-quarter profit warning yesterday, blaming economic weakness in Brazil.
Aztec Technology Partners
was tumbling down 1 9/16, or 41%, to 2 5/16 after last night warning it expects to report first-quarter earnings of 1 cent to 3 cents a share and 1999 earnings of 20 cents to 30 cents. The company cited tougher competition squeezing its margins, a slowdown on the cabling portion of its voice and data business unit and higher costs and one of its branches. Aztec also said it formed a strategic committee to find ways to boost its share price. A single-analyst view called for quarter earnings of 16 cents, vs. the year-ago 11 cents, and a three-analyst view called for full-year earnings of 65 cents, vs. the year-ago 60 cents.
was up 3 7/16, or 15.3%, to 25 15/16 after recording fourth-quarter earnings of 45 cents a share, on target with the three-analyst forecast and a dime ahead of the year-ago figure.
was down 5 3/16, or 22.4%, to 18 after announcing fourth-quarter earnings of 18 cents a share, missing the two-analyst estimate of 30 cents and falling behind the year-ago 23 cents.
was up 5 3/16, or 9.6%, to 59 3/4 after saying its first-quarter earnings will likely exceed current expectations and come in above 90 cents a share. The seven-analyst estimate calls for 81 cents vs. the year-ago 75 cents. The company attributed the new outlook to strong sales in higher margin items such as its
upright vacuums and large