MARKET SNAPSHOT
Market looks to gain at the open
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 7:38 AM ET Jun 13, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) -- The stock market is poised to make up for some of Monday's losses when it opens for trading on Tuesday, with the futures markets revealing some buying interest.
September S&P 500 futures rose 2.00 points, or 0.1 percent, and were trading roughly 4.40 points above fair value, according to HL Camp & Co. Nasdaq futures, meanwhile, added 45 points, or 1.2 percent.
The market's direction, however, hinges on whether key data set for release Tuesday will add to recent evidence that the U.S. economic engine is losing some steam.
Due out at 8:30 a.m. is the May retail sales report -- a pivotal number to gauge just how active consumers were last month. A survey of economists conducted by CBS MarketWatch.com predicts the overall figure to have increased by 0.1 percent. See Economic Preview, economic calendar and forecasts and historical economic data.
In the bond market, prices slipped into negative territory in anemic dealings as investors awaited the morning's dose of economic news.
The 10-year Treasury note inched down 5/32 to yield 6.10 percent while the 30-year bond lost 5/32 to yield 5.89 percent.
Monday's trading activity
Technology stocks succumbed to a bout of profit-taking Monday, with shares of big-cap names particularly hard hit. Blue-chip issues suffered smaller losses in another rangebound session spent waiting for the week's dose of economic data.
"The market appears to be drifting ahead of this week's economic data, which will be the last string of numbers ahead of the Federal Open Market Committee meeting," said Donald Selkin, chief market strategist at Joseph Gunnar.
While investors have been encouraged by recent economic numbers portraying a less-steamy U.S. economy, the market wants to see more positive economic news before breaking through the upper end of its trading range, according to Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum.
"There's still no commitment to the market," Hyman said. And with the earnings pre-announcement period commencing, investors need to be extra careful of where they invest, he continued.
On Monday, an earnings warning from Citrix Systems sent the computer software sector sharply lower as investors continued to show zero tolerance for companies revealing earnings shortfalls. Also under the gun were Internet and semiconductor issues.
Today on CBS MarketWatch
Nasdaq slides 2.6 percent, Dow slips
Motorola's Bluetooth plans
Silicon Stocks: Citrix leads sector lower
Biotech stocks skid
StockWatch: Shake out leaves Net bargains
More top stories...
CBS MarketWatch Columns
Updated:
6/12/2000 4:12:26 PM ET
The broader market saw nice advances in oil service shares, which came on the heels of a jump in crude oil prices. Retail stocks remained under pressure as investors worry that a cooler economy will slow consumer spending and hurt profits. Biotech shares were also sharply lower.
The Dow Industrials shed 49.85 points, or 0.5 percent, to 10,564.21.
On the downside were shares of McDonald's, Microsoft, Home Depot, Boeing and Wal-Mart. Upside movers included Exxon Mobil, Philip Morris and Eastman Kodak.
McDonald's (MCD: news, msgs) fell 1 1/4 to 32 5/8, extending Friday's losses, which came on the heels of disappointing May sales. The company received two downgrades on Monday: Bear Stearns lowered its rating to "neutral" from "buy" while Robertson Stephens lowered the company to a "long-term attractive" from a "buy."
The Nasdaq Composite ended at session lows, dropping 106.92 points, or 2.8 percent, to 3,767.92 while the Nasdaq 100 index fell 121.84 points, or 3.2 percent, to 3,638.42.
"We're seeing more of the same consolidation that we witnessed last week," said Bryan Piskorowski, market analyst at Prudential Securities. The market continues to look to economic data as well as earnings pre-announcements for direction, he said.
The Standard & Poor's 500 Index lost 0.8 percent while the Russell 2000 Index of small-capitalization stocks dropped 2.8 percent.
Volume was again very light, coming in at 756 million on the NYSE -- the second lightest trading day of the year -- and at 1.28 billion on the Nasdaq Stock Market. Market breadth was sharply negative on the Nasdaq, with losers pouncing on winners by 26 to 15 while advancers matched decliners on the NYSE.
Separately, Trim Tabs reported that equity fund inflows rebounded to an estimated $15.3 billion over the five days ended June 8 -- with U.S. funds absorbing 91 percent of the inflows and aggressive growth funds capturing a hefty $6.6 billion. Flows early in the month are always the strongest, Trim Tabs noted. And while stock market liquidity set a record last week, aided by a temporary slowing of new offerings, Trim Tabs said it expects issuance will pick up in June.
Sector movers
Citrix (CTXS: news, msgs) plunged 46 percent, or 18 15/16 to 22 1/4, adding to Friday?s 20 percent drop, after announcing that it expects to report revenue in the range of $105 million to $110 million versus $94.4 million in the second quarter of 1999. And the company sees earnings-per-share in the range of 9 to 11 cents, well below the First Call estimate of 21 cents a share. The company said expansion of its core business within large enterprise accounts and within certain markets, including Asia, is progressing more slowly than expected. Citrix will announce final results on July 19. See full story.
The CBOE Computer Software ($CWX: news, msgs) Index, of which Citrix is a component, fell 6.2 percent. Also feeling the heat in the software sector were shares of Microsoft (MSFT: news, msgs), which fell 1 15/16, or 2.8 percent, to 66 7/8.
Biotech stocks came under pressure Monday, weighing on the performance of the Nasdaq and the Russell 2000 indexes. Alkermes (ALKS: news, msgs) plunged 15 3/4, or 29 percent, to 38 1/2 on news that Johnson & Johnson decided to terminate further development of an injectable sustained release form of erythropoietin, which is used to treat anemia. Read the story. Alkermes is a component of Merrill's Biotech Holdrs (BBH: news, msgs), which fell 4.8 percent, as well as the Nasdaq Biotech Index ($IXBT: news, msgs), which also slipped 4.8 percent.
Oil service stocks were among the few sectors seeing nice gains Monday as July crude jumped $1.54 to $31.74, sending the Philadelphia Oil Service Index ($OSX: news, msgs) up 5.2 percent. Crude reached levels not seen in three-months following weekend comments from oil ministers suggesting there won't be an increase in production at OPEC's June 21 meeting in Vienna. See related story and view latest commodity prices.
Deutsche Banc Alex. Brown upgraded a string of oil firms, including Noble Drilling (NE: news, msgs), Schlumberger (SLB: news, msgs) and Marine Drilling (MRL: news, msgs) -- all of which were raised to a "strong buy" from a "market perform." Noble put on 2 5/16 to 41 7/8 while Marine added 1 7/16 to 27 5/16.
Motorola (MOT: news, msgs) shares lost 3/8 to 34 5/8. The company's Network Solutions Sector won a $55 million contract to replace the Global System for Mobile Communication digital cellular network in China's Hubei province. See full story. Separately, Altera (ALTR: news, msgs) and Motorola entered discussions to integrate Motorola's processor core technology into Altera programmable logic devices. See story. Altera shares backpedaled 5 5/8 to 104.
Among other semis coming under selling pressure was Micron Technology (MU: news, msgs), which shed 1 to 79 even after an upgrade by ING Barings to a "strong buy" from a "hold" rating. The Philadelphia Semiconductor Index ($SOX: news, msgs) lost 4.7 percent.
Shares of Corning rose 18 to 230 after the company said it expects better-than-expected earnings for the second quarter thanks to strong demand for its optical fiber and cable and flat panel glass products, among others. Corning (GLW: news, msgs) now expects to report earnings for the second quarter in the range of 78 to 80 cents a share, which compares to the First Call estimate of 69 cents a share. See full story.
Among other companies in the fiber-optic sector, JDS Uniphase added 5 to 115 9/16 while SDL (SDLI: news, msgs) rose 11 7/8 to 261 7/8. The companies and Corning are components of Merrill Lynch's Broadband Holdrs (BDH: news, msgs), which rose 1.0 percent on Monday.
Boise Cascade (BCC: news, msgs) shares added 5/8 to 26 15/16 even as the company warned late Friday of lower-than-expected second-quarter results, citing weakness in its building products and office products units. Analysts surveyed by First Call had expected earnings of 71 cents a share. See story.
The Philadelphia Paper Products Index ($FPP: news, msgs), of which Boise Cascade is a component, lost 1.1 percent.
Shares of Qualcomm (QCOM: news, msgs) added 2 5/8 to 81 11/16 on news that China Unicom will use the company?s third-generation CDMA wireless telecommunications system.
Shares of Linux-related companies slipped, even after IBM reinforced its commitment to the operating system with a number of hardware and software initiatives to develop and install Linux solutions for customers. Red Hat (RHAT: news, msgs) shed 1/2 to 22 1/2, VA Linux Systems (LNUX: news, msgs) declined 2 to 34 while Canadian-based Corel (CORL: news, msgs) lost 7/16 to 4 5/16.
Shares of America Online (AOL: news, msgs) lost 2 1/16 to 52 11/16. The company was lowered to a "buy" rating from a "strong buy" by Wit SoundView.
After the close Monday, Solectron (SLR: news, msgs) reported a profit from operations of 21 cents a share in the third-quarter, matching the First Call consensus estimate. The company made 16 cents a share in the year-ago period. The stock ended up 9/16 to 36 ahead of the news. See full story.
See After Hours for post-market trading activity.
Treasury focus
Regional market
coverage
North America
Europe
Asia
ADR Report
Currency rates
Intl' Indexes
Government prices remained mildly higher in extremely rangebound dealings.
The 10-year Treasury note added 10/32 to yield 6.09 percent while the 30-year bond was up 5/32 to yield 5.88 percent. See Bond Report.
No economic data was on tap Monday.
In the currency arena, dollar/yen recently traded at 106.82, near flat from Friday's close. Euro/dollar edged up 0.1 percent to 0.9532.
--------------------------------------------------------------------------------
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
