<font color=blue>MARKET SNAPSHOT--Volatile action for major averages
Intel recovers, Kodak fumbles
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 12:25 PM ET Sep 27, 2000
NEW YORK (CBS.MW) - In a session characterized by incredibly volatile action, the Nasdaq headed higher Wednesday. The index climbed in and out of negative territory throughout the morning -- as did the Dow Industrials -- as investors tried to sort out their profit worries
Jeopardizing the Dow's repeated attempts to rally was a continued plunge in shares of Eastman Kodak in the wake of its profit warning Tuesday. Shares dropped over 8 percent to $40.94 and were the index's downside leaders.
Inside technology, chip stocks managed to advance following four straight days of losses while a slump in Net stocks contained additional gains in the group. The muscle-flexing in chip stocks was sparked by a 4 percent climb in shares of Intel. The chip kingpin has erased over 26 percent of its value over the past four trading days.
In the broad market, utility, retail and biotech shares clawed their way into the positive column while airline and financial issues sagged.
In the meantime, oil shares also gained ground as crude prices spiked after four straight days of declines. November crude added 20 cents to $31.70. The American Petroleum Institute reported late Tuesday that crude supplies for the week ended Sept. 22 dropped 2.2 million barrels versus expectations for a rise.
The Dow Jones Industrials Average ($DJ) lost 5 points to 10,626.
In the meantime, the steady flow of earnings warnings continues to sap enthusiasm from investors and challenge the resolve of market bulls.
"The broader negative news on the economy and currencies are taking their toll on stocks, and this weakness will likely continue until the third quarter earnings reports start to provide a better showing in mid-October. Until then, dodging the land mines will be the biggest challenge for investors," said Robert Dickey, chief technical strategist at Dain Rauscher Wessels.
Keeping the Dow negative were shares of Eastman Kodak, Procter & Gamble, Boeing and Caterpillar. Witnessing upside action were shares of Intel, Hewlett-Packard and Merck.
Coca-Cola (KO) gained 38 cents to $55.31 after announcing that third-quarter unit-case volume would increase about 4 percent worldwide, reassuring analysts that the beverage giant would match earnings forecasts for the period. The stock has already risen 4 percent during the first two trading days of the week.
The Nasdaq Composite ($COMPQ) gained 17 points, or 0.5 percent, to 3,706 while the Nasdaq 100 Index ($NDX) rose 45 points, or 1.3 percent, to 3,626.
The Standard & Poor's 500 Index ($SPX) edged up 0.1 percent while the Russell 2000 Index ($RUT) of small-capitalization stocks gained 0.4 percent.
Separately, volume stood at 567 million on the NYSE and at 942 million on the Nasdaq Stock Market. Breadth was mixed, with advancers matching decliners on the NYSE while losers beat winners by 20 to 16 on the Nasdaq.
Specific movers
Internet stocks took a drubbing for a third straight session. The Goldman Sachs Internet Index ($GIN) fell 2.6 percent while Merrill Lynch's Internet Index (HHH) erased 4.6 percent.
Pacing the decline were shares of Priceline.com (PCLN), which revealed that third-quarter revenue would come in below expectations. The company estimates revenue to come in at $360 to $380 million versus revenue of $152.2 million in the year-ago quarter. The company cited a shortfall in revenue from the sale of airline tickets, which is expected to be $20 to $25 million less than levels registered during the second quarter of 2000. First Call expects a one-cent loss for the quarter. Shares fell for the third straight session, plunging $8.27, or 44 percent, to $10.38.
Many Net stalwarts took a hit, including Yahoo (YHOO), off 7 percent to $95.31, and EBay (EBAY), down 5.6 percent to $66.75.
Silicon Storage (SSTI) released a positive pre-announcement, saying its sees third-quarter earnings-per-share above 35 cents versus the first call estimate of 28 cents a share. The company said demand continues to outstrip supply, with the situation expected to continue well into 2001. The stock rose $2.30, or nearly 10 percent, to $28.38.
Shares of 3Com (COMS) swelled $3.25, or 23 percent, to $17.19. Late Tuesday, the company reported a loss from operations of 12 cents a share in its first quarter, cruising past analyst's estimates of a loss of 33 cents a share.
Treasury focus
Treasury prices struggled as inflation concerns dampened enthusiasm. The market is also processing supply in the corporate sector.
The 10-year bond lost 7/32 to yield ($TNX) 5.835 percent while the 30-year Treasury bond slipped 1/8 to yield ($TYX) 5.89 percent.
The market came under pressure following a Washington Post article. Citing government sources, John Berry said a calculating glitch at the Bureau of Labor Statistics would produce upward revisions to the consumer price index. The revision could push up the CPI for the year by about 0.1 to 0.3 percentage points.
Commenting on the article, Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the upward revisions -- which would impact both the headline and core inflation figures - would put the rate on a clear upward trend. While the revision would not be high enough to prompt the Fed into a near-term rate hike, Shepherdson said it makes him even more certain that a cut in rates isn't in the cards anytime soon.
In economic news, Wednesday saw the release of August durable goods orders, which gained 2.9 percent compared to expectations for a 2.4 percent increase. Excluding transportation, orders added 1.9 percent. View Economic Preview, economic calendar and forecasts and historical economic data.
Separately, the Treasury announced it would buy back $1.0 billion in 30-year issues Thursday with maturities ranging from Feb. 2010 to Nov. 2014.
In the currency market, the euro slipped 0.1 percent to 0.8819 while dollar/yen lost 0.1 percent to 107.41.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
