MARKET SNAPSHOT
Buyers remain sidelined
Broad decline for shares
By Julie Rannazzisi, CBS MarketWatch
Last Update: 1:07 PM ET May 23, 2000 Market Pulse
Bond Report
NEW YORK (CBS.MW) -- The major indexes struggled Tuesday, with big-cap tech stocks leading on the downside. The market continues to display a total lack of conviction, evidenced by the painfully thin volume behind recent moves.
"This volatility reflects people's confusion. We're currently in a news vacuum," said Peter Boockvar, equity strategist at Miller, Tabak & Co. The market, he added, must wait for next week's stream of economic news to begin the debate on how the Fed will act at the June 27-28 Federal Open Market Committee meeting.
In the broader market, paper stocks fell, extending Monday's losses, following a number of downgrades while oil service, airline and bank shares saw the largest gains. Financial stocks gained ground, lending support to the broader market even as the major averages declined.
The tech sector saw the greatest selling in Internet and chip stocks while computer software shares were positive. Most of the technology kingpins continue to deteriorate, keeping optimism at bay and buying interest at a standstill.
The Dow Industrials lost 40 points, or 0.4 percent, to 10,501 at 1:05 p.m.
Downside movers included International Paper, General Motors and Walt Disney. Moving on the upside were shares of Boeing, American Express and Citigroup.
The Nasdaq Composite lost 54 points, or 1.6 percent, to 3,309 while the Nasdaq 100 index fell 69 points, or 2.1 percent, to 3,194.
"We're operating in a very unusual environment. We're trapped by the Fed's rate hikes [and] a lot of churning and distribution [is] taking place. It's hard to identify leadership," remarked Bill Schneider, head of block trading at UBS Warburg.
"[And] the illiquidity is exasperating the market's moves. I don't see an easy end to this," he continued.
The Standard & Poor's 500 Index declined 0.7 percent while the Russell 2000 Index of small-capitalization stocks edged down 0.1 percent.
Volume came in at 484 million on the NYSE and at 684 million on the Nasdaq Stock Market. Winners beat losers by 14 to 13 on the NYSE while decliners outpaced advancers by 22 to 16 on the Nasdaq.
Specific movers
MedQuist surged 6 to 45 1/8. Royal Philips Electronics (PHG: news, msgs) -- the largest electronics company in Europe -- said it'll purchase a 60 percent stake in the company (MEDQ: news, msgs) for approximately $1.2 billion in cash, or $51 per share. See full story. Royal Philips added 3/4 to 39 15/16.
Shares of Global Crossing shed 29/64 to 27 9/16. The compnay (GBLX: news, msgs) said late Monday that it's seeking more than $1 billion in a lawsuit against Tyco Submarine Systems -- a unit of Tyco International (TYC: news, msgs) -- for damages stemming from a dispute involving fiber optic installation. See related story. Tyco edged up 3/16 to 44 3/16.
Veritas Software (VRTS: news, msgs) jumped 4 1/8 to 107. Veritas Software, Oracle (ORCL: news, msgs) and Sun Microsystems (SUNW: news, msgs) announced a three-way strategic alliance to provide a single-source of coordinated support and problem resolution that will enable customers to rapidly build more robust e-business infrastructures. Sun shares slipped 7/8 to 79 while Oracle lost 9/16 to 67 1/4.
Shares of J.D. Edwards added 1/8 to 12 5/8. Late Monday, the company (JDEC: news, msgs) said it will cut 800 jobs worldwide as part of a company-wide cost-cutting effort. J.D. Edwards plans to cut its workforce by 13 percent and use the Internet to lower procurement costs. See full story. Earlier this month, the company warned that it expected second-quarter results to show an operating loss of between $20 million and $25 million. First Call had expected a profit of 2 cents a share.
Shares of Zainy Brainy eased 5/16 to 2 5/8. The company (ZANY: news, msgs) checked in with a first quarter loss of 23 cents a share, matching the First Call estimate. The company lost 6 cents a share in the year-ago period.
Oneida (OCQ: news, msgs) shares added 1/4 to 18 13/16. The company reported first-quarter earnings of 45 cents a share, in line with the First Call estimate. The company made 40 cents a share in the year-ago period.
See full story.
The brokerage sector was mildly higher, with the AMEX Securities Broker/Dealer Index ($XBD: news, msgs) up 0.8 percent. But shares of many online brokerages continued to lose ground, adding to Monday's losses.
E-Trade (EGRP: news, msgs) shed 13/64 to 16 19/64. Prudential cut its price target on the stock to $45 from $62 but reiterated its "strong buy" recommendation. See Rating Revisions.
The Philadelphia Forest Paper Products Index ($FPP: news, msgs) shed 4.5 percent -- extending Monday's losses -- and is down a heady 18.6 percent on the year.
Deutsche Banc Alex. Brown lowered its rating on a plethora of paper companies Tuesday, including Georgia Pacific (GP: news, msgs), which was downgraded to a "market perform" from a "buy," International Paper (IP: news, msgs), lowered to a "buy" from a strong buy," and Weyerhaeuser (WY: news, msgs), which was cut to a "market perform" from a "buy."
International Paper lost 1 3/8 to 36 13/16, Georgia Pacific fell 3 1/4 to 34 7/16 while Weyerhaeuser fell 4 to 47 7/8.
Shares of Gillette (G: news, msgs) fell 1 13/16 to 35 15/16. Merrill Lynch dropped its $1.25 earnings-per-share estimate for 2000 to $1.23, citing, among others, challenges from a soft euro and rising interest rates.
Treasury focus
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North America
Europe
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ADR Report
Currency rates
Intl' Indexes
Government prices remained a touch lower in slow, directionless trading. Again, there are no economic releases on tap for Tuesday and market participants must wait for Thursday to get their first dose of data. See economic calendar and forecasts and historical economic data.
The 10-year Treasury note lost 3/32 to yield 6.46 percent and the 30-year bond was off 2/32 to yield 6.20 percent. See Bond Report.
In currency markets, dollar/yen lost 0.4 percent to 106.73 while euro/dollar edged up 0.1 percent to 0.9034.
In the commodity market, July crude fell 6 cents to $28.67 while the Bridge CRB index edged up 0.37 to 224.03. View latest commodity prices.
Julie Rannazzisi is markets editor for CBS MarketWatch.
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