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US Equities Review: Mostly lower on weak bonds, profit-taking
QCOM
RELATED QUOTES
QCOM 153 3/8 - 12 5/16
EK 75 15/16 2 7/8
MOT 90 3/8 - 8 3/8
GIC 49 11/16 - 2 13/16
DD 68 1/2 2 3/4
CAT 59 7/16 2 11/16
COMS 28 7/8 1 5/8
HSY 51 7/8 1/16
RELATED TOPICS
bank
bonds
business
carrier
commodity
communications
conference
consumer
consumer price index
corporate
cpi
dollar
earnings
Sep. 13-MAR-- [B] US Equities Review: Mostly lower on weak bonds, profit-taking Dow inches up 1.9; Nasdaq retreats 42 Financials mostly lower, most techs pull back By Frank Sakdalan, Bridge News New York--Sep 13--US stocks closed mostly lower as the Dow barely ended in positive territory and the Nasdaq retreated from Friday's record level amid profit-taking and weakness in bonds. The Dow Jones industrial average inched up 1.90, or 0.02%, to 11,030.33, but the Nasdaq composite index slipped 42.28, or 1.46%, to 2844.78, and the S& P 500 index fell 7.53, or 0.56%, to 1344.13.
* * * The Dow recovered from an earlier 46-point loss with the help of big gains in Eastman Kodak Co. (EK) and many of the Dow's cyclical components. Kodak, the top point gainer, rose 2 7/8 to 75 15/16 after Credit Suisse First Boston reiterated its strong buy rating on the stock. JP Morgan & Co. (JPM) led losers among Dow components, falling 3 1/4 to 124 13/16, a 2.5% drop. Bouts of profit-taking forced the Nasdaq to cut short its stay on the summit. Qualcomm Inc. (QCOM) was the top loser, sliding 12 5/16 to 153 3/8, a 7.4% drop, even though Banc of America Securities reiterated its buy rating on the supplier of digital wireless communications products and services. Big losses in communications equipment, semiconductor equipment and hardware and tools stocks helped end the S& P's 2-day advance. While Qualcomm was the biggest point loser on the S& P, Motorola Inc. (MOT) was the top percentage loser. It dropped 8.4%, or 8 1/4, to 90 3/8 even though Banc of America Securities reiterated its strong buy rating on the stock. The Los Angeles Times reported that Motorola is expected to announce plans to acquire General Instrument Corp. (GIC) this week in a $9.5 billion, all-stock deal. General Instrument, a supplier of high-speed modems and interactive broadband solutions, slid 5.4%, or 2 13/16, to 49 11/16. Decliners topped advancers 1,716 to 1,239 as 654 million shares changed hands on the New York Stock Exchange. Joseph Barthel, director of investment strategy at Fahnestock & Co., said the market " looked like it's taking a breather. There's normal profit-taking after the Nasdaq reached a new high Friday." He said the market was also pressured by the weakness in bonds amid " concerns that with the dollar at a 3-year low against the yen, the Japanese may liquidate their local holdings" in dollar-denominated instruments. But the strategist pointed out that the dollar was strong against other major currencies. At 1605 ET, the 30-year bond was at 100 29/32, down 8/32, to nudge its yield up to 6.055% from 6.028% late Friday. Barthel added, " There's some caution ahead of the CPI. There's no doubt that commodity prices are going higher, especially oil prices." The Labor Department will release the August consumer price index, which measures inflation at the retail level, on Wednesday. Noting the session's choppiness, Barthel warned that this is " triple-witching" week and program trading related to Friday's quarterly expirations of stock-index futures and options typically adds volatility to the stock market. CYCLICALS POST BIG GAINS Cyclical components posted big gains to join Eastman Kodak in buoying the Dow. DuPont Co. (DD) jumped 2 3/4 to 68 1/2, Caterpillar Inc. (CAT) climbed 2 11/16 to 59 7/16, and International Paper Co. (IP) rose 2 1/2 to 53 13/16. CORPORATE NEWS Laidlaw Inc. (LDW) jumped 11.4%, or 3/4, to 7 5/16 after the Canadian waste management and transportation service company said it expects to make a profit of more than $2 billion on the planned sale of its US healthcare operations and 44% interest in Safety-Kleen Corp. (SK), an industrial waste service company. Safety-Kleen climbed 8.5%, or 1 1/16, to 13 1/2. 3Com Corp. (COMS) jumped 6.0%, or 1 5/8, to 28 7/8 after announcing it plans to spin off its Palm Computing unit. The networking company said Palm Computing will become an independent publicly traded entity through an initial public offering, which it plans to hold early next year. Banc of America Securities reiterated its buy rating on the stock. EARNINGS NEWS PairGain Technologies Inc. (PAIR) dropped 5.3%, or 11/16, to 12 3/16. After the close Friday, the maker of digital subscriber line networking systems said it expects revenues and operating earnings for the third quarter to fall well below current market expectations. PairGain's president and chief executive Mike Pascoe said in a conference call today that he expects a 15% to 20% shortfall in third-quarter revenues, affecting gross margins by " at least a couple of percentage points." Hershey Foods Corp. (HSY) inched up 1/16 to 51 7/8 despite announcing it expects to miss earnings per share expectations for the third quarter and fiscal year 1999, primarily as a result of start-up problems with a new business system in July for customer service, warehousing and order fulfillment services. The company sees 1999 earnings falling 8% to 10% below expectations of $2.40 per share, with most of the shortfall occurring in the third quarter. The company said it started an action plan to resolve its order backlog. ECONOMIC NEWS The Federal Reserve Bank of Chicago's Midwest manufacturing index rose 0.7% in July to a record 132.1 after a revised increase of 0.5% in June. By comparison, the Federal Reserve Board's industrial production index for manufacturing rose 0.6% in July after rising 0.1% in June. Output in the Midwest was up 6.1% from a year ago, while the nation's output was 4.3% higher. BIGGEST GAINERS Leap Wireless International Inc. (LWIN) surged 39.6%, or 5 13/16, to 20 1/2 following Friday's reports that the wireless communications carrier's Chilean subsidiary, mobile telephone company Chilesat PCS, is looking to attract local investors to buy into the company. More to follow...
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