Wednesday, Feb. 24, 1999

After some hang time, stocks take a swan dive. Also, Gateway buys a stake in NECX.
Author:
Publish date:

Markets

After a solid morning's performance, stocks took a couple hours this afternoon to digest the economic

Rorschach

test that was

Fed

Chairman

Alan Greenspan's

Humphrey-Hawkins

testimony (see below).

Then they tanked.

The

Dow Jones Industrial Average

dumped 144.75 to 9399.67, the

S&P 500

lost 17.77 to 1253.41, and the

Nasdaq Composite Index

shed 36.95 to 2339.40. The small-cap

Russell 2000

dropped a meager 3.75 to 395.26, while

TheStreet.com Internet Sector

index picked up 8.79 to close at 505.74.

The transport sector managed to maintain a modicum of its midday gains. The

Dow Jones Transportation Average

rose 27.89 to 3249.60, led by

Federal Express

parent

FDX

(FDX) - Get Report

, up 3 9/16 to 93 7/16, and

Delta Air Lines

(DAL) - Get Report

, up 2 13/16 to 60 3/4.

European bourses closed higher, while Asian markets closed mixed. Hong Kong's

Hang Seng

shot up 243.58 to 9677.57 on massive institutional buying of

HSBC Holdings

and short covering ahead of tomorrow's expiration of index futures. Japan's

Nikkei

lost 145.20 to 14,355.45 as yields on 10-year bonds rose a sharp 0.14% to 1.875%.

For more markets action and news, click

here.

Companies

Columbia/HCA Healthcare

(COL)

disclosed that it has sent the

Justice Department

a $1 billion letter of credit. The letter shows the company's ability to pay a possible large lawsuit settlement while it extends its stock buyback by a further $1 billion.

Mutual company

Metropolitan Life Insurance

and

Asahi Mutual Life Insurance

are in talks to establish a U.S. joint asset management venture, the Japanese insurer said today.

Procter & Gamble

(PG) - Get Report

said it's considering selling its eye-opening

Coast

soap brand.

Splits in the offing:

Starbucks

(SBUX) - Get Report

and biotechnology firm

Immunex

(IMNX)

have both announced 2-for-1 stock splits.

For more news on companies and stocks, click

here.

Tech

Whither

Gateway

(GTW)

? Clarifying rumors of an impending major shift in the company's business model, the company said that it has paid about $21 million for a 19.9% stake in online retailer

NECX

, and plans to launch an e-commerce Web site. Gateway CEO Ted Waitt said that the company also purchased a warrant to significantly enlarge its stake in NECX in the future.

IBM

(IBM) - Get Report

disclosed in a 13G filing that it holds a passive 7.2% interest in

Prodigy Communications

(PRGY)

.

Intel's

(INTC) - Get Report

$2.5 billion venture capital fund will soon start pumping money into broadband technology, according to fund chief Les Vadasz.

For more tech news and commentary, click

here.

General News

Securities Exchange Commission

Chairman

Arthur Levitt

emphasized the need for independent directors of mutual fund companies to serve as a "force for accountability" for the industry.

Fed Chairman Alan Greenspan concluded is semiannual Humphrey-Hawkins

te stimony before the

House Banking Committee

today.

International

Olivetti

is pursuing its $58 billion hostile takeover of

Telecom Italia

(TI)

despite resistance from Italy's stock market regulator,

Consob

, according to Italian Communications Undersecretary Michele Lauria. Meanwhile, Telecom Italia acknowledged that it has been in merger talks with its cellular phone unit,

Telecom Italia Mobile

, to defend itself against Olivetti's bid.

The insurance industry continues its consolidation across the ocean, as

Swiss Life

agreed to buy French insurer

Lloyd Continental

for $540 million.

Now

that's

shareholder value. Packaged consumer goods manufacturer

Unilever

(UL) - Get Report

set a special dividend of a whopping $8 billion.

For more international news and commentary, click

here.

Elsewhere

Everybody back to work: 38-year-old James Rodden was executed by lethal injection today. Rodden was the first prisoner executed in Missouri since Gov.

Mel Carnahan

commuted the death sentence of murderer Darrell Mease at the request of

Pope John Paul II

.

Have a dumb question relating to finance? Great. Have a

really

dumb question? Even better. Send it to

MonEmailbag@thestreet.com, and

TSC

columnist

Herb Greenberg

and I will do our best to answer. Include your full name, and please, no questions seeking personal financial advice or regarding personal brokerage disputes. And this reminder: Because of the volume of mail, personal replies can't be guaranteed.

Click

here to read the latest MonEmailbag.