MARKET ACTIVITY/ WEEKEND EDITION OF TRADING NOTES JULY 12, 1998 (4)
Friday's Markets In U.S.
Major indices overcame early weakness and the Nasdaq rose 3.27 to its third straight record close. The Dow gained 16.47 and the S&P 500 ticked up nearly 6.
Technology's biggest names, led by the PC sector, continued to push higher while Internet stocks again suffered recrimination after recent gains. Drug and financial stocks were strong, as were consumer giants, while transportation names weakened. In keeping with recent trends, the majority of stocks were losers on the session.
The Dow Jones Industrial Average ($INDUA) spent much of the morning and early afternoon trading between 40 and 60 points below break-even hitting an intraday low of 9,029.79. After 1 p.m., however, the index marched back into positive ground. Rising as high as 9,135.60, the Dow closed up 16.47 to 9,106.25. For the week, the index rose 0.9%.
The Nasdaq Composite Index (COMP) followed a similar path to the Dow. The tech-bridled index slid to as low as 1,925.29 before pushing back toward history for the third straight day. Hitting its intraday best late in the session, the Nasdaq closed up 3.27 to 1,943.09. For the week, the index gained 2.6%.
The S&P 500 (SPX) rose 5.78 to 1,164.34, but fell about 2 points shy of its all-time best levels. The index finished the week up 1.6%. Small caps continued to lag, as the Russell 2000 Index ($IUX) slid 1.57 to 458.34 and finished the week up just 0.03%.
In NYSE trading, 577 million shares changed hands while advancing issues trailed declining stocks by a 4-to-3 spread. In Nasdaq trading, 722 million shares were exchanged, while the breadth of the market favored losers by a 22-to-19 spread.
Bond prices fell more than a quarter-point. The yield on the benchmark 30-year Treasury bond, which moves in the opposite direction of its price, rose to 5.62%.
Technology stocks
Technology's biggest names advanced again as Wall Street made final preparations for next week's earnings-report barrage. The Morgan Stanley High Tech Index (MSH) closed up 0.49 to 617.73, while the Nasdaq 100 (NDX) rose 8 to 1,391.
Computer makers were higher led by IBM (IBM), up 1 7/16 to 118 1/2, and Dell (DELL), up 15/16 to 100 13/16.
Gateway (GTW) fell 13/16 to 61 1/8 amid rumors that the PC maker is going to be subject to a takeover bid.
Laggards among tech stalwarts included Computer Associates (CA), which fell 1 15/16 to 55 15/16, and Automatic Data Processing (AUD), lower by 1 9/16 to 72 5/16.
The Internet stocks lost a little more of their steam. Yahoo! (YHOO) fell 1 1/2 to 182 1/2, America Online (AOL) fell 1 7/16 to 112 1/2, Lycos (LCOS) shed 3 5/16 to 67 5/8, while Amazon.com (AMZN) lost 6 to 99 1/2. The Inter@ctive Week Internet Index (IIX) fell 0.6 to 390.66.
Internet hosting services provider Icon CMT (ICMT) plunged 4 1/2 to 14 1/2 as it warned that its second-quarter loss would be wider than the 28 cents-per-share shortfall already expected.
However, WavePhone (WAVO) rose 3 7/8 to 14 13/16, thanks to some positive comments in Business Week. Meanwhile, Egghead.com (EGGS) jumped 4 7/16 to 21 7/16 upon receipt of a new "strong buy" rating from Riley Capital Research.
Dallas Semiconductor (DS) climbed 4 3/16 to 35 after it beat the Street by 2 cents, posting second-quarter earnings of 47 cents per share.
Santa Cruz Operation (SCOC), a supplier of UNIX server operating systems, tumbled 1 5/16 to 3 9/16 after it warned it would lose up to 59 cents per share in its fiscal third quarter; analysts were looking for a profit of 10 cents per share.
Applied Science & Technology (ASTX) sank 1 1/16 to 6 1/2 as it warned that it will post only break-even results in its fiscal fourth quarter; analysts were looking for profits of 9 cents per share.
Prism Solutions (PRZM) fell 1 7/16 to 3 9/16 after the software developer posted a second quarter loss of 6 cents per share.
Summa Four (SUMA), a provider of switching systems, predicted that fiscal first quarter earnings will well exceed current expectations. Still, the stock fell 3/4 to 10 5/8.
Eagle Point Software (EGPT) soared 1 1/8 to 9 3/4 after it said its fiscal fourth quarter earnings will exceed expectations.
Printronix Inc. (PTNX) beat the Street by 3 cents, producing fiscal first quarter profits of 38 cents per share. Yet its shares fell 1/2 to 15 1/2.
Tech-Sym Corp. (TSY) gained 1 1/16 to 29 3/16 despite saying its second quarter earnings would be as low as 55 cents per share, well below the 64 cents analysts were expecting.
UniComp (UCMP) rose 1 7/16 to 4 5/16 on news that it has signed a licensing agreement to install its software products with a large German shipping concern.
A licensing agreement with a unit of Bell Canada helped send shares of Frisco Bay Industries (FBAYF) higher by 3/4 to 3 1/4.
Active issues
In addition to IBM, the Dow was led higher by a variety of names, many of them consumer favorites. Procter & Gamble (PG) rose 2 1/16 to 92 7/16, McDonald's (MCD) gained 1 to 73 1/16, and Walt Disney (DIS) jumped 1 1/8 to 38 1/8.
Shares in Philip Morris Cos. Inc. (MO) rose 15/16 to 40 1/8 amid talk of a new proposal to settle remaining state lawsuits against the tobacco industry.
In tandem with the Dow's consumer-focused components, Gillette Co. (G) gained 2 7/8 to 62 7/16.
Chevron (CHV) rose 3/4 to 81 7/8, but most oil names sagged again as the AMEX Oil Index (XOI) shed 2.86 to 454.36.
DuPont (DD) continued to suffer following Thursday's profit warning, losing another 2 1/16 to 67 15/16.
3M (MMM) was also a negative influence as it fell 1 1/4 to 80 11/16, while Eastman Kodak (EK) slid 13/16 to 73 9/16.
Drug giant Pfizer Inc. (PFE) ticked up 2 11/16 to 118 after it posted second quarter earnings of 47 cents per share, 3 cents better than expectations.
In unison, Bristol-Myers Squibb (BMY) rose 1 15/16 to 119 3/4 to help lead the AMEX Pharmaceutical Index (DRG) up 3.54 to 685.90.
Biogen Inc. (BGEN) produced second quarter earnings of 41 cents per share, in line with expectations. The stock gained 2 7/16 to 54.
Vivus Inc. (VVUS) said it lost 76 cents per share in the second quarter, more than double the loss expected by analysts. The stock sagged 7/32 to 6 1/2.
AMR Corp. (AMR), down 1 1/8 to 85 11/16, and US Airways (U), lower by 2 to 78 3/4, led a retreat by the airlines. The AMEX Airline Index (XAL) slid 5.08 to 405.10.
Industrial-supply distributor Fastenal (FAST) reported lower than expected second-quarter earnings and said it stands to lose $500,000 a month in sales if the GM strikes continue. The stock dipped 7 1/2 to 43 3/4.
PetsMart (PETM) lost 1 5/16 to 8 3/4 as the retailer said it may lose up to 2 cents per share in the second quarter; analysts were expecting profits of 3 cents from the chain.
Sirrom Capital (SIR) shares sank 9 1/4 to 16 3/16 after the investment company said it would take a write-off due to the poor performance of some small-cap companies to which it had loaned money.
Damark International (DMRK) shares slumped 1 5/8 to 7 after the catalog direct marketer said its second quarter earnings would fall well short of Wall Street expectations.
HealthPlan Services Corp. (HPS) fell 1 3/8 to 16 9/16 following the company's warning that its second quarter results would not meet expectations.
Goldman Sachs lowered its ratings on several real estate firms. In sympathy, shares of Homestead Village (HSD) shed 1 1/4 to 12 9/16.
Crown Books (CRWN) shares tumbled 3 27/32 to 31/32 on their first day of trading since the bookseller filed for Chapter 11 bankruptcy.
Grupo Radio Centro (RC) leaped 1 15/16 to 12 3/8 on news that U.S.-based Chancellor Media Corp (AMFM) will buy a 50% in the Mexican broadcaster for about $237 million.
Stratysis (SSYS) rose 1 1/16 to 8 1/8 on word the company will buy back up to 300,000 shares, or about 5%, of its outstanding common stock.
Dollar General Corp. (DG) marched 2 3/16 higher to 44 15/16 on word that it will be added to the S&P 500.
Safeway (SWY) climbed 1 9/16 to 41 3/4 thanks to an upgrade by brokerage PaineWebber to "attractive" from "neutral."
After the bell
Speaking of disappointments, Applied Materials (AMAT) confirmed the speculation and joined the long list of chip-equipment makers to preannounce disappointing results. The company said it would have fiscal third-quarter earnings as low as 15 cents per share, 6 cents below expectations. In addition, the chip-equipment giant said its fiscal fourth quarter results will also be disappointing.
Fila Holding (FLH) warned that it could lose up $1.62 per share in the second qurater, well in excess of the 41-cent shortfall analysts were already expecting.
Pluma Inc. (PLU) also waved the red flag, saying it will repot a loss in the second stanza. Analysts were looking for profits of 17 cents per share from the manufacturer and distributor of fleece and jersey activewear.
Sunbeam Corp. (SOC) said it has received an extension until Dec. 31 to comply with financial parameters dictated by its lenders. The company's stock has plummeted amid concerns about the quality of its recent earnings, which led to the dismissal of CEO Al Dunlap. This news could prompt a recovery, or at least stem the damage.
Landair Services (LAND) said it will split into two publicly traded companies, one for trucking and one for air freight. |
