Not a good day for the Nasd shorts. Don't you think?
>1. Wednesday's Market Action
$ Change % Change Close
Dow Jones Industrials -79.11 -0.77% 10225.73
S&P 500 +8.52 +0.63% 1360.69
Nasdaq +168.21 +3.84% 4550.33
Internet Stock Index +64.05 +7.10% 965.96
Tech stocks were on fire today, propelling the Nasdaq to a record close
on the index's biggest 1-day point gain ever, while the Dow lagged
behind, as Federal Reserve Chairman Alan Greenspan returned to Capitol
Hill for more testimony.
All eyes were on Mr. Greenspan again today, as he completed the second
half of his semi-annual Humphrey-Hawkins testimony before Congress.
Market watchers were looking for hints of upcoming Fed interest rate
action. Greenspan reiterated much of his testimony from last week,
although investors keyed in on his statements that the Fed is not
directly targeting the stock market in setting monetary policy. That
news triggered the rally in tech stocks today, even if it appears that
the Fed could very well raise interest rates again at its March meeting
due to overall strength and hints of rising inflation in the overall
economy.
Following Greenspan's testimony, Nasdaq tech giants exploded, with
Cisco Systems (Nasdaq:CSCO) bolting 14 11/16 (+11.85%) to 138 5/8, Sun
Microsystems (Nasdaq:SUNW) rising 6 5/8 (+7.53%) to 94 5/8, Oracle
(Nasdaq:ORCL) gaining 3 3/4 (+6.32%) to 63 1/16, Intel Corp.
(Nasdaq:INTC) gaining 2 5/16 (+2.17%) to 109 1/16, and Microsoft
(Nasdaq:MSFT) bouncing back a little by 7/16 (+0.47%) to 94 1/4.
Internet "blue chips" contributed to today's rally as well, with eBay
(Nasdaq:EBAY) surging 15.20% (up 20 7/16) to 154 15/16, Amazon.com
(Nasdaq:AMZN) jumping 10.82% (up 6 7/8) to 70 7/16, and Yahoo!
(Nasdaq:YHOO) climbing 12 25/64 (+8.06%) to 166 13/64.
Interest rate-sensitive brokerage stocks also reacted well, with Morgan
Stanley Dean Witter (NYSE:MWD) adding 3 7/16 (+5.52%) to 65 3/4,
Merrill Lynch (NYSE:MER) rising 5 7/8 (+6.70%) to 93 1/2, and Goldman
Sachs (NYSE:GS) increasing 4 3/16 (+5.13%) to 85 3/4.
AOL/Time Warner Update: Shares of America Online (NYSE:AOL) have
plummeted since the Internet giant made its surprise announcement 6
weeks ago that it would acquire Time Warner (NYSE:TWX), whose shares
have also sold off after an initial jump. Today, both shares bounced
back after two prominent Merrill Lynch analysts offered positive
comments on the planned merger. Jessica Reif Cohen, Merrill's media
analyst, and Henry Blodget, its Internet analyst, said the drop in
share prices have created an "excellent buying opportunity" and set a
12-to-18 month price target on AOL shares of $90. AOL shares surged
15.11% (up 7 1/2) to 57 1/8 on heavy volume while Time Warner shares
gained 3 (+4.08%) to 76 9/16 on the news.
The stakes got bigger in Las Vegas on news that MGM Grand (NYSE:MGG),
controlled by prominent investor Kirk Kerkorian, has offered to buy
Mirage Resorts (NYSE:MIR) for more than $3.2 billion in a deal aimed at
creating a casino giant. MGM Grand's unsolicited offer is to pay
Mirage shareholders $17 a share (either all in cash or a combination of
cash and stock), which represents more than a 50% premium over Friday's
closing price of Mirage shares. Mirage shares soared 33.33% (up 3 5/8)
to 14 1/2 and MGM Grand shares added 1 7/16 (+3.56%) to 41 13/16.
Leading the Dow lower today was Boeing (NYSE:BA), off 1 3/4 (-4.50%) to
37 1/8, SBC Communications (NYSE:SBC), sinking 1 1/4 (-3.42%) to 35
1/4, Merck (NYSE:MRK), down 2 3/8 (-3.63%) to 63 1/8, and International
Paper (NYSE:IP), down 1 1/4 (-3.01%) to 40 1/4. On the positive side,
3M (NYSE:MMM) rose 2 13/16 (+3.14%) to 92 5/16, Walt Disney (NYSE:DIS)
gained 3/4 (+2.25%) to 34 1/8 and Home Depot (NYSE:HD) moved up 1 1/4
(+2.33%) to 54 7/8. |
