<FONT COLOR=BLUE>MARKET SNAPSHOT--Earnings, merger boost the Dow
Nasdaq can't keep up its forward momentum
By Rex Nutting, CBS.MarketWatch.com
Last Update: 4:16 PM ET Oct 23, 2000
NEW YORK (CBS.MW) - A late-afternoon sell-off Monday took some of the luster off some earlier healthy gains in blue-chip stocks, but the Dow Jones Industrial Average managed its third straight gain.
The Nasdaq, recovered some of its losses in late trades, but ended the regular trading session in the red.
"Today doesn't mean a whole lot," said Ned Collins, head of trading at Daiwa Securities. "We need to do more work to see if we have reached a bottom."
The Dow Jones Industrial Average benefited from some strong earnings from two components and from a merger agreement with two others.
"We're seeing a lot of depressed stocks turning back around," said Peter Cardillo, chief strategist for Westfalia Investments. "Earnings are finally giving this market a lift."
"This is the third day of follow-through since the market reached a bottom on Wednesday," said Art Hogan, chief market strategist at Jefferies & Co.
The Dow Jones Industrial Average ($INDU) rose 45.13 points to 10,271.72 or 0.4 percent. The Nasdaq Composite ($COMPQ) fell 14.42 points to 3,468.72 or 0.4 percent and the S&P 500 ($SPX) dipped 1.16 points to 1,395.77.
The Nasdaq 100 index ($NDX) sank 34.45 points to 3,422.16. Listen to the mid-day report.
Decliners outpaced advancers 5 to 4 on the New York Stock Exchange, but advancers outpaced decliners 7 to 6 on the Nasdaq. Some 1.03 billion shares changed hands on the NYSE and 1.67 billion on Nasdaq.
A $45 billion plan by General Electric (GE) to buy Honeywell (HON) was one of the key items shaping the trading day. The two issues were the most active on the New York Stock Exchange.
Shares of General Electric fell $2.50 to $49.75 Monday after the industrial giant said late Sunday it would outbid United Technologies (UTX) for Honeywell.
Honeywell gained $3.94 to $49.94, after surging $10.13 on Friday.
Rockwell (ROK) shares rose 14 percent to $40.31 and Raytheon (RTN.B) added 6 percent to $33.38 on the possibility that their aerospace units could be attractive to UTX or others. CS First Boston upgraded its ratings on Rockwell, Raytheon and Litton Industries (LIT).
GE, Honeywell and UTX are among the 30 components of the Dow Jones Industrial Average. See full story.
Earnings news
Dow component Minnesota, Mining & Manufacturing (MMM) posted third quarter earnings of $1.25 per share vs. expectations of $1.24 per share in a survey of analysts by First Call. The company said it expects to meet earnings expectations for the fourth quarter and for 2001. Shares jumped $2.56 to $89.81.
Dow component SBC Communications (SBC) earned 57 cents a share excluding items on revenue of $13.5 billion, a penny ahead of the First Call consensus estimates. The Baby Bell sees double-digit revenue growth and earnings growth in the "mid-teens" in 2001. Shares climbed $3.38 to $54.13.
Corning (GLW) reported third-quarter earnings of 35 cents per share vs. expectations of 34 cents a share. Revenue rose 54 percent over last year to $1.9 billion. The company forecast "strong revenue and earnings growth throughout 2001." Shares dropped $4.50 to $101.44.
American Express (AXP) earned 54 cents a share, in line with expectations. Shares fell $1.69 to $54.38, joining other financial stocks in the red. See story.
On Tuesday, the Street expects earnings reports from oil companies Exxon Mobil (XOM), Texaco (TX), Chevron (CHV), and Halliburton (HAL). In the tech sector, Qwest (Q), Nortel (NT), LSI Logic (LSI) and Computer Associates (CA) are on the plate. Others include Goodyear (GT), Schering-Plough (SGP), Pfizer (PFE) and Tyco International (TYC),
Sectors
Technology stocks turned higher after a slow start with semiconductor stocks ($SOX) in the lead, rising 3.2 percent.
Drug stocks ($DRG) were benefiting from Merck's success, gaining 2.9 percent.
The market's volatile biotech sector ($BTK) rose 5.6 percent. Among the few laggards were oil services ($OSX), down 3.4 percent, and networking stocks ($NWX), off 1.7 percent. Financials ($XBD) were also lower.
Internet stocks ($GIN) gained 0.8 percent.
Other factors
Shares of Lucent sank 56 cents to $22.06, after firing its CEO and once again lowering its earning guidance.
Merck (MRK) added $2.88 to $84.75 after a rating upgrade from Salomon Smith Barney.
Ariba (ARBA) gained $2.75 to $132.50 after the Nasdaq said the business-to-business electronic commerce and network services company would join the Nasdaq 100 index on Oct. 27.
AT&T (T) continues to be in the spotlight as the communications giant's board meets to mull over a plan to break itself up, according to published reports in The New York Times and The Wall Street Journal.
Ma Bell would re-establish itself under its most profitable unit, business services, and break off its broadband business, and struggling long distance services. It issued a tracking stock for its wireless unit (AWE) earlier this year. Shares rose 63 cents to $27.63.
Microsoft (MSFT) tumbled $3.06 to $62.13 on heavy volume of dominated by institutional trades.
The bond market was essentially flat, supported by nervousness about the Middle East and buffeted by flows in and out of stocks. |
