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Street Life
Thursday, June 17, 1999, 7:00 p.m.
Greenspan Warns, Abby Reassures, Markets Tango
By Amy Kover
Rate hike? Whatever!!! The Dow blew off
Greenspan's rate-increase warning without
batting an eye. Rallied by a tidy 56.70,
to 10841.60. Yeah, man!!! Fuggehdaboutit!!
Well, it didn't EXACTLY happen like that.
Here's the real (slightly more pathetic)
story: Markets opened lower as everyone
trembled over the upcoming speech. After
the speech, the Dow stumbled around.
Directionless. Unsure. Until Queen Abby
(Joseph Cohen)--or Mom--fluttered in and
promised that the market could handle its
"FOMC flu shot." That's when things started
to roll. Not only did the Dow tango, but
the S&P rose 9.49, to 1339.90. Thanks, Mom.
Meanwhile, NASDAQ rallied on autopilot.
Didn't care about Greenie, didn't care about
nothin'. Closed the day with a cocky 26.32
point gain, to 2544.15. As Larry Wachtel
put it: "Add that to yesterday's gain, and
it's impressive!" All right, here's the
scoop on today....
GREENSPAN SPEAKS, SIGH, CLEARLY.... Another
reason stock went up: Markets hate nothing
more than trading in the dark. And believe
it or not, Greenspan actually cleared up
some confusion today. Sounding a bit like
a Jedi, he acknowledged "developing imbalances"
that could hurt this non-inflationary economy.
Then he went on to say "it is useful to
preempt forces of imbalance before they
threaten economic stability." Yeah, the Man
is ready for 1-2-3-4 HIKE! But it seems like
a one-time deal. Hopefully, today's performance
means that the markets are over that pre-hike
anxiety. After all, the long bond rate fell
below the 6% mark today. That's always nice....
HIGH LIFE IN THE NASDAQ.... Here are the cool
ones: CMGI took home over 3 points, to $96 1/2.
Was up as high as $104. @Home snagged almost
4 points. Oracle gained nearly 2. And Microsoft
rose 1 7/8, to $82 7/8. Big Bill loves it....
COMPAQ'S SLUMP.... Ouch. First it was Compaq's
CEO who took the fall; now it's the earnings.
CPQ scared the devil outta everyone this
morning when it warned that second-quarter
earnings would actually be in the red. Supposed
to fall as much as 15 cents, as opposed to
the expected 20-cent gain. Also taking a
third-quarter restructuring charge. Like Linus
on Peanuts, CPQ says it's not living up to its
"potential." Gee, maybe CPQ needs to go to a
Dale Carnegie seminar or therapy for
underachievers. Nah! Instead they're going
to restructure. Lay a few people off. Sounds
like too little, too late to me. Some value
players are scooping it up, though. I heard
Nancy Tengler on CNBC yesterday saying that
she's got a little. (BTW, she was great on
CNBC. Held her own against Joe K. with the
wisecracks. You go, Nancy!) But hey, it's all
cool. Compaq actually rose 25 cents.
THIS COW ISN'T TIPPING.... Speaking of PCs,
did anyone notice that Gateway said it would
hit its Q2 earnings yesterday, and it entered
the sub-$1,000 PC market? Stock's up over 1 1/2
points today. Who's the lame cow now?
INTEL.... Compaq's fellow sufferer--Intel, the
mighty semi. CS First Boston's Charlie Glavin
reduced 1999 estimates to $2.25 from $2.32.
His estimates for 2000 went down, too. Says
they're not shipping enough, and that average
selling prices are going down. Deadly combo.
Intel investors thought so too. Stock lost
1 11/16 points.
Loose Change
Maria Bartiromo and Jonathan Steinberg's
wedding announcement was in the NYT this
weekend. And she's already back at work this
morning! Bum deal. When does she get to go
on her glam three-week honeymoon with her
fabulously wealthy husband?... Send these
guys a sympathy card. Or maybe not. American
Greetings earnings may have fallen 68%, but
it was better than what analysts had ordered.
So, stock rose over 1 point. With estimates
like that, who needs bears?... Remember the
Tylenol scare in the early '80s? That's what
this Coke a la Europe thing reminds me of.
Only milder.... Nursing facility Omnicare
warned it will miss earnings. Blamed part of
their troubles on "a significantly diminished
acuity level among residents of these facilities."
Not sure exactly what that means, but it can't
be good. Lost $3.25.... Kellogg may close one
of its cereal plants in Battle Creek. (Am I
just the bearer of bad news today or what? Oh
yeah, and the cat died.).... You heard of
Oscar and Felix, so how 'bout Bill Gates and
Shaq? Kinda strange, but those two crazy guys
got together to talk to kids about staying
safe online. (Wonder if they warned kids
about our site.).... All right, time to talk
about the Knicks' dismal first game in the
finals. They were outsized, outshot, outplayed.
LJ made a valiant appearance, but couldn't
do squat. And Marcus had some serious foul
trouble. That can't happen. We all just need
to sit down and regroup. There's got to be a
better way to play these Spurs. (Them boys in
Texas grow so BIG though!)
Talk Back to Street Life....
Why let Serwer, Amy, and Nelman have all the fun?!
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