MARKET SNAPSHOT
positive
Buyers show more resolve
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 2:00 PM ET Jun 21, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - The Dow Industrials registered modest gains Wednesday, courtesy of a stellar performance in Microsoft shares. The Nasdaq generated some buying interest after spending the morning locked in the narrowest of ranges.
?The market will try to do better this week and next week as the Fed meeting concludes and fund managers put cash to work for quarter end,? said Joe Liro, equity strategist at Stone & McCarthy Research Associates.
Inside the broader market, drug, biotech, utility and oil service shares rose after two sessions of declines while retail, bank and brokerage stocks retreated. In the tech arena, networking stocks edged up while computer software and chip stocks retreated.
The Dow Jones Industrial Average added 42 points, or 0.4 percent, to 10,477 at 1:49 p.m.
Upside movers included Microsoft (MSFT: news, msgs), which added 6 percent, or 4 7/16 to 79 3/8, helped by news that implementations of all sanctions imposed on the software behemoth?s conduct have been delayed pending appeal. CIBC World Markets upped Microsoft to a ?buy? from a ?hold? rating.
Also moving higher were shares of 3M, United Technologies and SBC Communications. On the downside were shares of Citigroup, General Electric, Honeywell and Philip Morris.
The Nasdaq Composite climbed 18 points, or 0.5 percent, to 4,031 while the Nasdaq 100 index rose 11 points, or 0.3 percent, to 3,945.
?The momentum must continue to follow through soon, or it will be broken and the top of the trading range will have been reinforced. There seem to be enough hot stock moves in the tech sector to lift the Nasdaq but the smaller-cap issues are back to their underperforming ways - which is causing a drag on the index,? said Robert Dickey, technical analyst at Dain Rauscher Wessels.
In the meantime, investors absorbed more earnings pre-announcements.
?Investor enthusiasm has been held back by some pre-announced disappointing earnings for the second quarter. Although the list of those unfortunate companies that won't achieve earnings projections has been small, they come at a bad time,? said Al Goldman, chief market strategist at A.G. Edwards & Sons.
?Evidence of a slowdown in the economy's growth rate has investors worried that corporate earnings overall will deteriorate big time. Thus, pre-announced disappointments fell on nervous participants,? Goldman continued.
The Standard & Poor's 500 Index edged up 0.1 percent while the Russell 2000 Index of small-capitalization stocks inched up 0.2 percent.
Volume checked in at 662 million on the NYSE and at 981 million on the Nasdaq Stock Market. Breadth was again negative, with losers pouncing on winners by 16 to 11 on the NYSE and by 21 to 17 on the Nasdaq.
Sector and specific movers
Oracle declined 2 31/64 to 83 9/16. The company (ORCL: news, msgs) posted after the close Tuesday fourth-quarter earnings per share of 31 cents compared to the First Call estimate of 25 cents a share. The company made 18 cents a share in the year-ago period.
Oracle shares suffered as investors reacted to lower-than-expected revenue of the company?s flagship database software. Analysts had expected database revenue of as much as $1.35 billion while the actual numbers were $1.22 billion. Read the story.
The CBOE Computer Software Index ($CWX: news, msgs), of which Oracle is a component, fell 0.7 percent. Keeping the index from losing further ground were gains in shares of Microsoft.
Merrill Lynch downgraded Oracle to a ?near-term accumulate? from a ?near-term buy.? Lehman Brothers reiterated its ?buy? recommendation and $100 price target, indicating that it expects re-acceleration of database license revenue next quarter. Deutsche Banc Alex. Brown and UBS Warburg called the company?s results ?solid? while Chase H&Q called the numbers ?outstanding.? See Rating Revisions.
Intel (INTC: news, msgs) shares slipped 1 11/16 to 136 5/8. After the close Tuesday, the chip kingpin said it will take a second-quarter charge of about $200 million, or 2 cents a share on a post-split basis, for the remaining costs associated with the replacement and refunding of faulty motherboards. The replacement program was announced last month. Read the story.
The Philadelphia Semiconductor Index ($SOX: news, msgs) shed 0.5 percent. Bringing some disappointment to the high-flying sector - which is up nearly 77 percent for the year - was a monthly report from the Semiconductor Equipment and Materials International trade group announcing that the May book-to-bill ratio was 1.30:1, down from a revised 1:37:1 in April and from a peak of 1:46:1 in March. See related story.
Avista Corp. (AVA: news, msgs) warned Wednesday that it would do no better than break even in the second quarter and full year because of soaring energy prices. First Call had expected the company to earn 21 cents a share in the second quarter. Read the story. Shares fell 2 3/8 to 16 7/8.
Corel shares (CORL: news, msgs) fell 17/32, or 13 percent, to 3 21/32. Late Tuesday, the company posted a second-quarter loss of 36 cents per share compared with the First Call estimate of a loss of 40 cents a share. The Linux company said it had only $9.9 million in cash on its balance sheet and conceded that unless it gets more money, its ?ability to continue would be in substantial doubt.? See full story.
Among other Linux-related companies, Red Hat (RHAT: news, msgs) added 2 11/16 to 32 7/8 while VA Linux Systems (LNUX: news, msgs) rose 1 3/8 to 36 5/8.
Verity checked in after the close Tuesday with fourth-quarter earnings of 32 cents a share, well ahead of the First Call estimate of 15 cents a share. The company (VRTY: news, msgs) made 17 cents a share in the year-ago period. Shares rose 2 7/8 to 44 7/8. Banc of America upped the company to a ?strong buy? rating from a ?buy.?
Shares of Akamai Technologies (AKAM: news, msgs) put on 18 percent, or 17 1/8 to 111 1/8. The company was initiated with a ?buy? rating and a $175 to $180 price target at Chase H&Q. The company is a component of Merrill Lynch?s Internet Infrastructure Holdrs (IIH: news, msgs), which shed 0.6 percent on Wednesday.
Shares of Tyson Foods (TSN: news, msgs) tumbled 9/16 to 9 after warning after the close Tuesday that it expects earnings to be in the range of 18 to 20 cents a share. First Call expects the company to make 26 cents a share in the third quarter. View the story. Merrill lowered its rating on the company to a ?near-term neutral? from a ?near-term accumulate.?
Shares of Gillette (G: news, msgs) added 13/16 to 31 13/16. The consumer-products giant was upgraded to a ?strong buy? from a ?hold? at Prudential Securities.
Over in the IPO arena, China Unicom?s American Depositary Shares (CHU: news, msgs) opened at 22, well above their $19.99 price. The stock rose to 9.4 percent to 24 1/2. The wireless telecom provider?s huge $4.9 billion IPO is the largest Asian IPO ever seen outside of Japan. See IPO Report.
Treasury focus
Bond prices lost ground, with losses clustered in the long end of the Treasury yield curve, led by the 30-year issue.
The 10-year Treasury note fell 17/32 to yield 6.10 percent while the 30-year bond dropped 25/32 to yield 5.95 percent. See Bond Report.
There is no economic data on tap for Wednesday. View Economic Preview,economic calendar and forecasts and historical economic data.
In the meantime, OPEC members informally agreed Wednesday to boost daily crude oil production starting in July, according to the oil minister of Saudi Arabia, the group's biggest producer. But the Saudi official declined to give details about the size the increase. View related story.
In the commodity market, August crude rose 65 cents to $31.30 as market participants don?t believe OPEC production increases will be sufficient to lower prices. Crude oil jumped $1.01 on Tuesday while the Bridge CRB index added 0.50 to 224.34 View latest commodity prices.
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Julie Rannazzisi is markets editor for CBS.MarketWatch.com.
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