Killing in Naz enhances AMD's reputation - WSJ seems think in that way.
When did AMD become blue chip, high tech firm?
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Investors Leave Tech Sector
In Favor of Dow Industrials
By ROBERT O'BRIEN
Dow Jones Newswires
NEW YORK -- In a dramatic shift of investor sentiment, the
technology-laden Nasdaq Composite Index plunged 7.6% Monday, while
the Dow Jones Industrial Average jumped 2.8%.
The technology-stock sell-off was sparked by news that Microsoft
couldn't reach a settlement with the U.S. government over its antitrust suit.
As was proved during a similar, though less-severe sell-off endured last
week, tech issues can no longer overcome bad news.
"The mania, where investors are willing to pay any price for a hope, idea or
a dream, that has ended," said Robert Harrington, head of listed trading at
PaineWebber. "Dollar-for-dollar, money has come out of Nasdaq, and it
has gone into the Dow."
Many of the best-performing stocks of the first three months of the year
suffered miserable losses Monday. Applied Micro Circuits fell 32 7/16 to
117 5/8. Juniper Networks dropped 30 9/16 to 233. Sandisk declined 17
1/2 to 105. PMC-Sierra slid 34 1/16 to 160 5/8. And Rambus, the
best-performing name in the first quarter, up 337% in the period,
surrendered 37 9/16 to 256 15/16. (All trade on the Nasdaq Stock
Market.)
"The psychology has changed, even though the fundamentals have not,"
said Thomas Galvin, chief market strategist at Donaldson Lufkin &
Jenrette. "We're in a hand-wringing high-technology correction."
The Dow Jones Industrial Average
advanced 300.01, the sixth-biggest
single-session point-gain ever, to
end at 11221.93. That on a day
when the Microsoft loss of 15 7/16
-- the stock closed at 90 13/16 --
"cost" the industrial average 76.59
points.
Drug, financial and retail blue chips
all mounted big improvements in
Monday's trading. Merck gained 4
5/8 to 66 3/4. J.P. Morgan added
10 to 141 3/4, the first time it has traded that high since last November.
Wal-Mart Stores gained 5 to 61 1/2.
On the New York Stock Exchange, there were 1,565 issues advancing,
1,482 declining and 400 unchanged. NYSE volume totaled 1.02 billion
shares, compared with 1.20 billion Friday.
The Standard & Poor's 500-stock index inched up 7.39 to 1505.97, while
the New York Stock Exchange Composite Index tacked on 11.96 to
659.66.
For the Nasdaq composite, it marked the worst day since the depths of
the Asian currency crisis in August 1998. The index fell 7.63%, the biggest
loss since a decline of 8.56% on Aug. 31, 1998. The point-loss of 349.13
represented, by far, the biggest one-day decline in point terms; it ended at
4223.70.
The losses in technology continued a streak that began last week, and have
badly damaged the performance of the Nasdaq composite for the year. Up
24% on the year at its closing high of 5048.62, the index is down 824.78,
or 19%, from that March 10 record finish. Now, for the year, the index
boasts a rise of just 154.53, or 3.8%.
Despite a historic point-total, Monday's loss by the Nasdaq composite
came on relatively modest volume, with 1.71 billion shares Monday, versus
1.88 billion Friday.
"That's not surprising," said Scott Curtis, senior trader at Brown Brothers
Harriman. "You'll expect to see the buyers a little timid in the face of the
sell-off."
Once again, the pace of the decline accelerated in the final 90 minutes of
the trading day, a time when margin calls are frequently made.
"Leverage is high, which accounts for some of the volatility seen already
this year," Gail Dudack, a strategist at Warburg Dillon Read, said in a
report Monday. "Margin debt is at record levels and is concentrated in
many of the active Nasdaq 100 stocks."
A handful of stocks considered blue-chip, high-technology names managed
to improve. International Business Machines gained 3 1/2 to 121 7/8.
Compaq Computer added 3/4 to 27 1/2. Advanced Micro Devices rose 1
5/8 to 60 4/8. Hewlett-Packard inched up 3/8 to 132 15/16.
Others fared better on a relative basis -- that is, their losses proved
modest. Intel, for example, declined 1 5/16 to 130 5/8, off 1%.
"Some of the infrastructure companies that have real business did
reasonably well," said Steven Milunovich, a technology analyst at Merrill
Lynch. "But the companies that have the business models where you need
a telescope to see profits, that is what has come in here."
724 Solutions, an online banking and financial-services issue, declined 43
1/2 to 81, a drop of 35%, after having climbed to 240 as recently as
March 9. I2 Technologies, a business-to-business e-commerce software
developer, fell 29 3/8 to 92 3/4, down from a March 10 high of 223 1/2.
E.piphany, a maker of software that helps companies sort through
customer data, declined 34 1/2 to 99 1/16, down from a high of 324 7/8
March 10.
Mattel gained 7/16 to 10 15/16. The El Segundo, Calif., toy maker said it
hired Credit Suisse First Boston to help arrange the sale of its
money-losing Learning Co. software unit.
Coca-Cola added 2 3/8 to 49 5/16, ahead of the Atlanta beverage
maker's meeting Tuesday with Wall Street investors and analysts in New
York, where the company is expected to revise its long-term earnings
growth target.
General Motors gained 2 to 84 13/16. Deutsche Banc Alex. Brown &
Sons said in a research note Monday that it expected the auto maker to
beat first-quarter profit estimates of $2.68 a share by a few pennies.
Separately, GM announced an increase in March total vehicle sales over
the year-ago period.
El Paso Energy advanced 1 1/8 to 41 1/2. The Houston energy marketing
concern said that it expects its master limited partnership, El Paso Energy
Partners, to announce its first asset acquisition within the week.
Anadarko Petroleum fell 4 3/16 to 34 1/2. The Houston energy and
natural gas exploration concern said it planned to merge with Union Pacific
Resources Group to create an independent exploration and production
company.
Charles Schwab rose sharply intraday, but finished just modestly higher,
ahead 9/16 to 57 3/8, after the San Francisco discount brokerage concern
said its first-quarter results would come in ahead of Wall Street's forecasts.
Conseco continued to decline, falling 2 1/16 to 9 3/8, after losing 16%
Friday on news that the insurance concern would put its consumer-finance
operation on the block.
Pfizer gained 1 3/4 to 38 5/16 in a session in which drug makers moved up
sharply. The New York pharmaceuticals maker is expected to say it will
give away its Diflucan drug to thousands of AIDS patients in South Africa.
Lands' End lost 4 3/8 to 56 15/16. First Union Securities lowered its rating
on the stock of the Dodgeville, Wis., specialty retailer, saying that the
stock price has run ahead of near-term fundamentals.
Starbucks declined 3 3/8 to 51 7/16 on Nasdaq. Lehman Brothers
lowered its rating on the Seattle coffee retailer, saying that, while it remains
bullish on fundamentals, valuations have gotten a little rich.
Parametric Technology lost 10 5/16 to 10 3/4 on Nasdaq. Goldman Sachs
issued a cautious note on the Waltham, Mass., software developer, citing
what the firm called concerns about the stability of its ongoing businesses.
Legato Systems dropped 24 3/4 to 19 7/8 on Nasdaq. The Palo Alto,
Calif., software developer said in a U.S. Securities and Exchange
Commission filing that it probably will have to restate financial results for
1999.
Oracle eased 1 3/16 to 76 7/8 on Nasdaq, falling with the technology
sector, despite some upbeat comments from Merrill Lynch ahead of the
company's meeting with analysts Tuesday. Merrill said the Redwood
Shores, Calif., software developer enjoys strong product flow and a strong
finish to its fiscal year, which ends in May.
Manugistics Group sank 12 1/8 to 38 7/8 on Nasdaq. The Rockville, Md.,
provider of supply-chain management software lost ground with the rest of
the business-to-business software market, and on rumors that the
company's chief executive has been selling Manugistics stock. A company
spokesman called the rumors "overblown." |
