MARKET SNAPSHOT
Big-cap tech stocks buoy Nasdaq
Late-day buying propels stocks
No policy hints from Greenspan speech
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 6:45 PM ET Jun 13, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) -- Buyers showed up in droves to snap up big-cap technology stocks Tuesday, helping the Nasdaq score smart gains. Blue-chip issues also advanced after a volatile morning, helped by a rebound in the retail and drug sectors.
Optimistic comments regarding productivity growth from Fed Chair Alan Greenspan propelled the market in the afternoon following a morning spent in the minus column. The Fed Chair skirted the issue of monetary policy, which assuaged some of the market's fears since recent remarks from Federal Reserve officials have been on the hawkish side.
"People were worried about Greenspan after the plethora of Fed officials making hawkish comments in recent days, which had put the market on Fed watch again," said Arthur Hogan, chief market strategist at Jefferies & Co.
Speaking to the New York Association for Business Economics, the Fed Chair said there's evidence of an improvement in the growth rate of structural productivity. Further, he believes there's room for greater productivity advances, particularly in the Internet and e-commerce arenas. Read the story.
In the broader market, the "defensive" drug sector climbed while oil service stocks rose in tandem with crude oil prices -- which reached three-month highs Tuesday. On the downside were bank, airline and paper stocks. Retail stocks recovered, interrupting a three-day losing streak. The sector has been hard hit in recent months on mounting concerns that consumer spending will decelerate as the economy slows and hurt companies' bottom lines.
In the tech arena, all sectors ended higher, led by computer software and chip stocks.
Today on CBS MarketWatch
Broader closes higher after late surge
Stocks to trade in penny increments
NBCi shares pressured after warning
Crude prices surge past $32 a barrel
Kellner: Repeal the death tax
More top stories...
CBS MarketWatch Columns
Updated:
6/13/2000 3:57:56 PM ET
The Dow Industrials gained 57.63 points, or 0.5 percent, to 10,621.84.
Johnson & Johnson, Merck, Wal-Mart and Home Depot paced the advance while Hewlett-Packard, Caterpillar and DuPont led on the downside.
Shares of Hewlett-Packard (HWP: news, msgs) fell 7 1/2, or 6 percent, to 118 1/2, putting pressure on the Dow Industrials throughout the session. Sanford Bernstein lowered its rating on the company to a "market perform" from an "outperform." See Hardware Stocks.
"Hewlett-Packard really dragged down the market during the session," said Ned Collins of Daiwa Securities.
While players are still nervous about earnings shortfalls, the market is acting very well, Collins added.
"These are the weeks of confession and the firms that have sinned are receiving their penance. As we head into July, the companies that have been good will give the market a lift with their better-than-expected reports," said Joe Liro, market analyst at Stone & McCarthy Research Associates.
The Nasdaq Composite tacked on 83.15 points, or 2.2 percent, to 3,851.06 while the Nasdaq 100 index jumped 127.39 points, or 3.5 percent, to 3,765.81, propelled by gains in shares of bellwethers Cisco Systems (CSCO: news, msgs), up 2 7/8 to 65, Intel (INTC: news, msgs), up 6 7/16 to 131 1/2, Micron Technology (MU: news, msgs), up 4 to 83 1/2, and Microsoft (MSFT: news, msgs), up 1 to 67 7/8.
The Standard & Poor's 500 Index added 1.6 percent while the Russell 2000 Index of small-capitalization stocks climbed 1.0 percent.
Separately, volume came in at 918 million on the NYSE and at 1.37 billion on the Nasdaq Stock Market. Market breadth was mixed, with winners matching losers on the Nasdaq and advancers beating decliners by 17 to 12 on the NYSE.
Inside the retail sales
Market commentary: Banc of America chief economist Lynn Reaser
Click below to play See in new window
More evidence of a less-than-
enthusiastic consumer emerged Tuesday, as May retail sales fell 0.3 percent compared to the expected 0.1 percent rise. Excluding the volatile autos component, retail sales were flat. And April retail sales were downwardly revised to show a 0.6 percent decline from the previously reported 0.2 percent fall. See full story.
The decline in retail sales was pronounced in durable goods, where sales fell 1 percent. On the other hand, non-durable goods sales rose 0.2 percent.
"Durable goods have now declined for three consecutive months, the first time that has happened since the spring of 1990 -- prior to the recession starting in July. Their softness supports the view that previous rate hikes are working and almost certainty puts the Fed on hold [at the] June 28 [FOMC meeting]," said David Orr, chief economist at First Union.
However, Orr believes the Fed is not off the table for later rate hikes as the slow second-quarter in durable goods follows a very robust first quarter.
"If we thought next few months will look like this it would be easy to argue the economy is slowing sharply and that the Fed is done [on the tightening front]. But we have long expected sales to slow in the spring due to the end of the tax refund season. The real question is the extent of the rebound in June and July," observed Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Wednesday will see the release of the consumer price index, expected to rise 0.2 percent both overall and at the core. April business inventories will also be out, seen rising by 0.3 percent. And the Fed's Fed Book Report on economic conditions will be unleashed in the afternoon. View Economic Preview, economic calendar and forecasts and historical economic data.
Sector movers
The S&P Retail Index ($RLX: news, msgs) added 3.1 percent, relinquishing earlier losses. Gains in shares of Best Buy, up 4 5/8 to 63 5/8, helped the sector. The company (BBY: news, msgs) registered first-quarter earnings of 34 cents a share, matching the First Call consensus estimate. The company made 22 cents a share in the year-ago period.
And Pier 1 Imports (PIR: news, msgs), which is not a component of the retail index, posted first-quarter earnings of 17 cents a share, beating the First Call estimate of 16 cents a share. The company earned 13 cents in the year-ago period. Separately, the company announced the launch of its Web site, pier1.com. The stock added 7/16 to 9 9/16. See full story.
Consumer stocks put on a mixed performance, with the Morgan Stanley Consumer Index ($CMR: news, msgs) up 1.0 percent.
PaineWebber initiated coverage on a slew of stocks: Clorox (CLX: news, msgs) with a "buy" rating; Colgate-Palmolive (CL: news, msgs) and Dial (DL: news, msgs) with a "neutral" rating and Procter & Gamble (PG: news, msgs) with an "attractive" rating. Clorox climbed 3, or 7.4 percent, to 43 1/2 while Colgate lost 1 7/8 to 55 9/16.
Bank stocks ended mixed, with the Standard & Poor's Bank Index ($BIX: news, msgs) off 0.4 percent while the Philadelphia/KBW Bank Index ($BKX: news, msgs) added 0.3 percent. (See 1-year chart.)
In the brokerage arena, Deutsche Banc Alex. Brown initiated coverage on Goldman Sachs (GS: news, msgs) and J.P. Morgan (JPM: news, msgs) with a "buy" rating. Goldman added 1 13/16 to 85 1/8 while J.P. Morgan lost 1/16 to 129 9/16.
Individual movers
In specific issues, Citrix Systems recovered, gaining 2 11/16 to 24 15/16. On Monday, the company (CTXS: news, msgs) plunged 46 percent after warning of an earnings shortfall.
Shares of Solectron (SLR: news, msgs) added 1 3/16 to 38 1/4. The company reported after the close 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. See full story.
Broadcom (BRCM: news, msgs) announced it's acquiring Innovent Systems, which will allow it to expand its presence in the wireless space. Broadcom will issue about 3.0 million Class A common shares in exchange for all Innovent's outstanding shares in a deal valued at about $440 million. See full story. The stock gained 5 11/16 to 152 3/8.
Meanwhile, the market continues to punish companies that can't meet Wall Street's estimates. Shares of NBC Internet (NBCI: news, msgs) plunged 7, or 28.4 percent, to 17 5/8. Late Monday, the company warned that second-quarter results will be lower than expected due to a soft advertising market for Internet companies and expenses related to recent acquisitions. First Call expected a loss of 70 cents per share. See full story.
Shares of Kemet (KEM: news, msgs) added 6 13/16 to 36 after the company said it would top Wall Street estimates by at least 50 percent in the first quarter. First Call had expected earning-per-share of 49 cents a share. See full story.
Late Tuesday, CMGI (CMGI: news, msgs) posted a third-quarter loss of $1.53 a share, much narrower than the First Call estimate of a loss of $1.83 a share. The stock added 1/8 to 56 5/8 ahead of the news.
See After Hours for post-market trading activity.
Treasury focus
Regional market
coverage
North America
Europe
Asia
ADR Report
Currency rates
Intl' Indexes
In the bond market, the long end -- particularly the 30-year bond -- took a beating as investors unwound flattening curve trades with a vengeance. The rest of the Treasury curve, meanwhile, remained near flat levels.
Fixed-income prices were unable to derive much solace from the morning's weaker-than-expected economic data.
The 10-year Treasury note lost 12/32 to yield 6.12 percent while the 30-year bond tumbled 1 1/32 to yield 5.95 percent. See Bond Report.
In the currency arena, dollar/yen slipped 0.1 percent to 106.94 while euro/dollar added 0.5 percent to 0.9582.
In the commodity arena, July crude tacked on 82 cents to $32.56 while the Bridge CRB index gained 0.30 to 224.88. View latest commodity prices.
--------------------------------------------------------------------------------
Julie Rannazzisi is markets editor for CBS.MarketWatch.com.
|
