MARKET SNAPSHOT
Nasdaq posts second-largest point increase
Tech buyers step up to the plate
Dow also on fire
By Julie Rannazzisi, CBS MarketWatch
Last Update: 6:43 PM ET Apr 25, 2000 Market Pulse
Bond Report
NEW YORK (CBS.MW) -- The Nasdaq registered its second-largest point increase in history Tuesday as bargain hunters snapped up large- and small-cap issues alike. A nice rebound in Microsoft shares also helped the market regain its composure following Monday's drubbing.
Dow stocks also remained in favor, with the blue-chip barometer rising for the third straight session and clearing the 11,000 mark for the first time in nearly two weeks.
"As a whole, earnings have been terrific," said Art Hogan, chief market analyst at Jefferies & Co. And though investors are looking ahead to revenue growth later in the year -- when earnings are likely to slow as the economy cools off -- fundamentals for U.S. corporations remain strong, he said.
"They'll be more choppiness ahead but I think the worst is over for the market," Hogan said.
In the tech arena, Internet, chip and computer software shares witnessed a nice bounce following Monday's drop. In the broader market, retail stocks remained well bid for the fifth straight session and biotech shares recovered after Monday's sell-off. A rise in bank and brokerage stocks also lent support to the overall market and paper stocks were buttressed by takeover news.
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The Dow Industrials climbed 218.72 points, or 2.0 percent, to 11,124.82. Upside leaders were Intel, SBC Communications, AT&T, American Express and Hewlett-Packard. And Microsoft gained 2 3/4, or 4.1 percent, to 69 3/8 following a 15.7 percent tumble on Monday.
Preventing additional gains in the Dow were sharp losses in shares of International Paper, Procter & Gamble and DuPont.
The Nasdaq Composite climbed 228.75 points, or 6.6 percent, to 3,711.23.
The Standard & Poor's 500 Index rose 3.3 percent while the Russell 2000 Index of small-capitalization stocks put on 4.4 percent.
More volatility ahead
Peter Cardillo, chief strategist at Westfalia Investments, believes the Nasdaq will remain volatile on a day-to-day basis as it forms a base from which to rally. But the fact the Nasdaq erased about half of its losses in late trading Monday -- even as Microsoft remained lower -- and rose sharply on Tuesday was extremely encouraging, he added.
"Selling really dried up late Monday. The reversal felt good [and suggests] that some of the fears that had gripped the market are fading," echoed Bill Schneider, head of block trading at Warburg Dillon Read.
Money continues to flow into the stock market with a return to leadership in some old-economy names and renewed interest in select Internet stocks, Schneider said.
Light volume
Volume checked in at 1.06 billion on the Big Board and at a relatively light 1.62 billion on the Nasdaq Stock Market. Market breadth improved significantly as winners bested losers by 28 to 13 on the Nasdaq and by 22 to 8 on the NYSE.
Jay Suskind, director of trading at Ryan, Beck & Co., said the lighter-than-usual volume reveals a market that is somewhat fatigued -- despite Tuesday's encouraging gains.
Liquidity is still lacking, Suskind continued, and investors continue to play it safe with a slew of economic data on tap later in the week. The market had a whiff of inflation with the March consumer price index and remains on edge as a consequence, he said.
"Thursday's the wild card," Hogan said, referring to the upcoming data. "We may get the jitters again."
Many areas of the market that had been shunned on Monday saw marked improvements Tuesday. The business-to-business sector, for example, posted smart gains with Merrill Lynch's Holdrs (BHH: news, msgs) up 12.1 percent. Commerce One, up 7 5/8 to 55 1/2, Scient Corp., up 10 11/16 to 51 11/16, and VerticalNet, up 5 11/16 to 45 1/8, were among the leaders on the upside.
And Merrill's Internet Infrastructure Holdrs (IIH: news, msgs), which took a beating on Monday, added 7.3 percent, buttressed by InfoSpace, up 11 to 65, Vignette, up 4 7/8 to 45 13/16, and E.piphany, up 8 3/4 to 74. But Exodus Communications declined for the third straight session, falling 4 1/8 to 78 3/8.
Earnings of Dow components
A number of Dow stocks unveiled their quarterly results on Tuesday.
Minnesota Mining & Manufacturing registered a first-quarter profit from operations of $1.13 a share, well ahead of the First Call estimate of $1.08. The stock (MMM: news, msgs) fell 3 9/16 to 93 13/16 after posting decent gains on Monday.
ExxonMobil (XOM: news, msgs) registered first-quarter earnings of 95 cents a share, five cents ahead of the First Call estimate. The stock rose 1 1/8 to 81.
SBC Communications checked in with a first-quarter profit from operations of 56 cents a share, beating the First Call estimate of 52 cents a share. The stock (SBC: news, msgs) gained 2 11/16 to 44 15/16.
In addition, Procter & Gamble (PG: news, msgs) released earnings of 64 cents a share in the third quarter, matching First Call's lowered estimate. P&G was one of the Dow's downside leaders, falling 6 3/16 to 64 5/16.
And DuPont (DD: news, msgs) registered first-quarter earnings of 76 cents a share Tuesday, 2 cents ahead of the First Call estimate. Shares fell 4 7/8 to 51 1/8.
More quarterly results
Xerox reported a first-quarter profit from operations of 30 cents a share compared to the First Call estimate of 25 cents per share -- which was lowered following the company's restructuring announcement on March 31 that included the elimination of 5,200 positions. See full story. Shares (XRX: news, msgs) added 2 9/16 to 26 11/16.
Dial Corp. announced first-quarter earnings of 23 cents a share, in line with First Call's lowered expectations. Separately, Dial said it will purchase the Coast brand from Procter & Gamble. Terms of the transaction were not disclosed. Dial said the acquisition is expected to be neutral to Dial's earnings in 2000 and slightly accretive in 2001. Shares (DL: news, msgs) were flat at 14. See Earnings Surprises.
Akamai Technologies fell 2 13/16 to 73 1/16. After the close Monday, the company (AKAM: news, msgs) registered a first-quarter loss from operations of 44 cents a share compared to the First Call projection of a loss of 40 cents a share.
Buy.com saw its shares rise 11/16, or 11.3 percent, to 6 3/4. The company (BUYX: news, msgs) reported a first-quarter loss of 28 cents a share versus the 29-cent per share loss projected by First Call late Monday.
Shares of Compaq (CPQ: news, msgs) rose 3 9/16 to 29 13/16. The company announced a first-quarter profit from operations of 16 cents a share, in line with First Call expectations. Read story.
EBay (EBAY: news, msgs) posted a first-quarter profit from operations of 6 cents a share after the close, 3 cents ahead of the First Call estimate. The company also set a 2-for-1 stock spilt. EBay closed up 11 11/16 to 153 9/16 but traded down to 150 1/2 in after-hours Instinet trading. See full story.
Late Tuesday, JDS Uniphase (JDSU: news, msgs) reported third-quarter earnings of 11 cents a share, a penny ahead of the Wall Street consensus estimate. Shares ended up 12 9/16 to 92 7/8 and fell to 88 in after-hours dealings.
After the close, BMC Software (BMCS: news, msgs) said it made 49 cents a share in the fourth quarter, 2 pennies ahead of the First Call estimate. Shares rose 2 7/8 to 40 13/16 ahead of the news. Moreover, BMC Software announced plans to repurchase up to $500 million in common stock. The company said it will buy stock on the open market depending on market conditions.
See After Hours for post-market trading activity.
Bond focus
Treasurys took a beating as interest in the stock market put a damper on fixed-income securities.
Further, the market has remained cautious and investors have kept their powder dry in anticipation of key economic data due out on Thursday -- which includes the first quarter gross domestic product and the closely-watched employment cost index.
The 30-year Treasury bond received some short-lived support early in the session from the government's fourth buyback announcement. But participants were quick to take Treasurys lower as the equity market staged a smart rebound out of the gate. The government said Tuesday it'll buy back $3 billion in securities maturing from Feb. 2015 to Aug. 2025.
Tuesday saw the release of March existing home sales, which rose 1.5 percent to a 4.83 million rate. That compared to the expected 4.7 million rate according to a survey of economists conducted by CBS MarketWatch.com. April consumer confidence, meanwhile, came in at 136.9 vs. the expected 134.8 and March's 137.1. See full story.
Wednesday will see the release of March durable goods orders, expected to be up 1.0 percent. View economic calendar and forecasts and historical economic data.
The 10-year Treasury note fell 27/32 to yield 6.13 percent and the 30-year bond lost 30/32 to yield 5.94 percent. See Bond Report.
In currency markets, dollar/yen was recently changing hands at 105.79, up 0.1 percent from the previous close, while euro/dollar plunged 1.9 percent to 0.9209 after reaching an intra-day low of 0.9164.
In the commodity arena, June crude lost 71 cents to $25.33 while the Bridge CRB index added 0.14 to 211.95. View latest commodity prices.
Julie Rannazzisi is Markets Editor for CBS MarketWatch. |
