MARKET SNAPSHOT--Market looks for direction
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 8:38 AM ET Jun 23, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - U.S. shares are set for and open on the mixed side Friday with little in the way of news to sway prices in either direction.
September S&P 500 futures rose 0.70 point and were trading roughly 4.70 points above fair value, according to HL Camp & Co. Nasdaq futures, meanwhile, added 13.00 points, or 0.3 percent.
Separately, Trim Tabs said all equity funds had inflows of $6.5 billion over the week ended June 21 compared with inflows of $12.3 billion during the prior week. Equity funds that invest primarily in U.S. stocks had inflows of $6.6 billion, compared with inflows of $10.8 billion during the previous week.
In shares seeing activity before the official start of trading, Rambus shares were on a roll, soaring 35 7/8 higher to 133 in Instinet. The stock is up a staggering 120.4 percent for the month. See Indications. The company has settled a patent infringement dispute with Japan?s Hitachi. Hitachi has agreed to pay Rambus (RMBS: news, msgs) a settlement fee as well as quarterly royalty payments. Read the story.
Micron Technology (MU: news, msgs) lost 4 5/8 to 86 1/8. The company reported fiscal third-quarter earnings after the close Thursday, posting earnings-per-share of 47 cents a share compared to the First Call estimate of 34 cents a share. In the year-ago third quarter, the company reported a net loss of 5 cents per share. See full story.
Shares of Human Genome Sciences (HGSI: news, msgs) jumped 12 to 145 in Instinet after the company announced Friday it would begin human clinical trials of a protein that may help patients with immune system problems. See full story. The stock ended off 12 percent to 133 on Thursday, mirroring a sharp decline in biotech stocks.
Shares of Millennium Pharmaceutical (MLNM: news, msgs) may get a lift Friday. The company announced a joint venture with Aventis (AVE: news, msgs) for the development and commercialization of drugs for the treatment of inflammatory diseases and new drug discovery technologies. Further, Millennium will provide Aventis with rights to its drug discovery technologies in exchange for payments of up to $200 million over a five-year period while Aventis will invest $250 million in Millennium's common stock. The stock tumbled 14 percent, or 19 11/16 to 124 1/2 on Thursday.
In the bond market, prices traded on a mixed note with no economic news to focus on. The 10-year Treasury note lost 1/8 to yield 6.12 percent while the 30-year bond added 1/32 to yield 5.97 percent.
There is no economic data set for release on Friday. Next week?s calendar will also be light, with the main releases in the form of consumer confidence, personal income and spending numbers and new home sales. View Economic Preview, economic calendar and forecasts and historical economic data.
In the currency market, dollar/yen lost 0.3 percent from the previous session to 104.17 while euro/dollar added 0.4 percent to 0.9392. See latest currency rates.
Thursday?s trading activity
Virtually all market sectors succumbed to heavy selling pressure Thursday, particularly those that enjoyed the heaviest buying interest earlier in the week. Investors displayed nervousness ahead of next week?s Federal Open Market Committee meeting and the profit-taking interrupted the Nasdaq?s five-day winning streak.
?The market is focusing on what the Fed is going to do. Oil prices are going up and there?s nervousness,? said Peter Cardillo, chief strategist at Westfalia Investments.
?The retail sector is going to get hit along with the heavy cyclicals because we don?t know how much the economy will slow,? Cardillo said.
A fall in biotech and chip stocks put a drag on the Nasdaq right from the start of trading. The broader market saw the biggest declines in the drug, oil service, brokerage and retail sectors while bank stocks edged higher.
The Dow Jones Industrial Average dropped 121.62 points, or 1.2 percent, to 10,376.12.
?The cyclicals are holding the Dow down but stocks that had been lagging in April and May are now doing better,? said Donald Selkin, chief market strategist at Joseph Gunnar.
?If we head into next week?s Fed meeting in weakened conditions, we could get a nice relief rally,? Selkin said.
Moreover, market participants are banking on quarter-end window dressing to bolster the best-performing stocks next week.
On the downside were shares of Honeywell, Philip Morris, General Motors, Intel and IBM. Upside movers included Coca-Cola, AT&T and SBC Communications.
Microsoft (MSFT: news, msgs) edged down 13/16 to 79 7/8. On Wednesday, the company saw a nearly 8 percent run-up to levels not seen since mid-April. The software giant announced at its Forum 2000 conference a Web-oriented strategy that will shift its focus to the online accessing of software through personal computers as well as devices other than PCs. Read the story.
Shares of AT&T (T: news, msgs) put on 1 to 36. A federal appeals court overturned an earlier decision by a federal judge and ruled that the city of Portland, Ore. can?t force cable operators to open their networks to rival Internet service providers, a big victory for Ma Bell. See full story.
The Nasdaq Composite tumbled 127.11 points, or 3.1 percent, to 3,936.90 while the Nasdaq 100 index lost 165.89 points, or 4.2 percent, to 3,804.11. The Nasdaq fell below 4,000 after closing above the level for three straight sessions.
?It?s not surprising to see some consolidation Thursday -- it doesn?t change the overall picture. While recent rallies have come with less-than-stellar market breadth, the action has been positive,? opined Todd Gold, technical strategist at Gruntal & Co.
But market observers don?t expect to see any fireworks heading into next week?s interest-rate setting meeting.
The Standard & Poor's 500 Index trimmed 1.8 percent while the Russell 2000 Index of small-capitalization stocks fell 2.4 percent.
Volume came in at 1.01 billion on the NYSE and at 1.61 billion on the Nasdaq Stock Market. Breadth was decidedly negative, with losers beating winners by 19 to 10 on the NYSE and by 24 to 15 on the Nasdaq.
Separately, rumors swirled throughout the market late in the morning that Fed Chair Alan Greenspan had been in a car accident. The Fed was quick to squash the rumor and said ?Greenspan is fine.?
Sector movers
Texas Instruments (TXN: news, msgs) lost 2 1/4 to 79 3/4. The company said after the close of trading Wednesday that it will acquire Burr-Brown Corp.(BBRC: news, msgs) in a stock-for-stock transaction valued at about $7.6 billion. Read the story. TI said the acquisition strengthens its position in the data converter and amplifier segments of the analog semiconductor market. Burr-Brown shares skyrocketed 37.7 percent, or 27 3/8 to 100.
Chip stocks came under some profit taking, with the Philadelphia Semiconductor Index ($SOX: news, msgs) down 4.6 percent. Intel (INTC: news, msgs) shed 4 15/16 to 134 1/16. Bucking the trend were shares of Rambus (RMBS: news, msgs), up 4.9 percent, or 4 1/2 to 97 1/8.
Among the big-cap tech stocks, Cisco Systems (CSCO: news, msgs) fell 4.3 percent, or 2 7/8 to 64 9/16, Oracle (ORCL: news, msgs) fell 5.4 percent, or 4 11/16 to 81 1/2 and Sun Microsystems (SUNW: news, msgs) fell 4.0 percent, or 3 7/8 to 92 1/16.
Shares of Nokia (NOK: news, msgs) declined 5 to 56. Rumors are circulating that the company is interested in purchasing Qualcomm (QCOM: news, msgs), which climbed 5.8 percent, or 3 3/4 to 68 1/4.
Financial stocks were mixed, with bank stocks showing some signs of improvement while brokerage stocks lost ground.
The Standard & Poor's Bank Index ($BIX: news, msgs) added 1.5 percent while the Amex Securities Broker/Dealer Index ($XBD: news, msgs) lost 1.6 percent.
In earnings news, Morgan Stanley Dean Witter (MWD: news, msgs) checked in with second-quarter earnings of $1.26, beating the First Call estimate of $1.13 a share. The company made 97 cents a share in the year-ago period. The stock fell 2 7/16 to 83 3/16. Read the story.
Meanwhile, shares of PaineWebber (PWJ: news, msgs) dropped 1.8 percent, or 7/8 to 48 5/8. Merrill Lynch lowered its 2000 estimates on the firm to $3.90 from $4.35 and 2001 estimates to $4.45 from $4.85. Merrill said it now sees second-quarter results at 86 cents a share. First Call predicts earnings of $1.04 a share.
The biotech sector took a breather following a five-day run-up. The Amex Biotech Index ($BTK: news, msgs) plunged 7.7 percent after gaining 19 percent over the past five trading sessions while Merrill Lynch?s Biotech Holdrs (BBH: news, msgs) lost 5.1 percent. Among the downside movers were Millennium Pharmaceutical (MLNM: news, msgs), off 19 11/16 to 124 1/2, while Biogen (BGEN: news, msgs) lost 6 5/16 to 66 7/16 and Affymetrix (AFFX: news, msgs) dropped 20 7/8 to 173 5/8.
Oil service shares dropped, with the Philadelphia Oil Service Index ($OSX: news, msgs) off 2.6 percent. Crude oil prices continued to creep higher after Wednesday?s OPEC meeting, during which members agreed to a 708,000-barrel-per-day increase. Participants don?t believe the increase will be enough to ease supply pressures and drive prices lower. August crude added 82 cents to $32.19 while the Bridge CRB index climbed 2.04 to 227.08.
Retail stocks dropped, with the S&P Retail Index ($RLX: news, msgs) down 1.1 percent.
Bed Bath & Beyond (BBBY: news, msgs), which is part of the index, reported after the close Wednesday a first-quarter profit of 16 cents a share, a penny ahead of the First Call estimate. The company earned 12 cents in the year-ago period. The stock lost 2 7/8 to 32 13/16.
See After Hours for post-market trading activity.
Individual movers
Emmis Communications (EMMS: news, msgs) posted first-quarter earnings of 8 cents a share, beating the First Call estimate by 2 cents a share. The company earned a penny a share in the year-ago quarter. The stock added 3 11/16 to 48. Read the story.
Family Dollar (FDO: news, msgs) posted a third-quarter profit from operations of 29 cents per share, in line with the First Call estimate.
The company made 24 cents in the year-ago period. Shares lost 2 3/8 to 17 1/4.
Shares of WorldCom (WCOM: news, msgs) lost 1 5/16 to 39 after shedding 1 3/8 on Wednesday on news that the European Union is reportedly set to block WorldCom?s proposed $129 billion acquisition of Sprint on concerns that the deal would concentrate too much of the Internet within the company?s own network. See full story. Shares of Sprint (FON: news, msgs) added 5/8 to 59 5/8.
Treasury focus
In the bond market, prices fell across the board in a session dominated by extremely choppy trading.
The market received only a short-lived positive effect from Treasury?s $2 billion buyback of long-term issues.
Treasury received offers totaling $7.3 billion for the $2 billion it bought back. The issues involved were maturing between Feb. 1985 and August 1989.
Meanwhile, The Bond Market Association released its outlook for the U.S. economy in the second-half of the year. The Association sees 2000 gross domestic product growth at 4.2 percent and expects GDP to fall to 3.4 percent in 2001.
The Bond Group sees the unemployment rate steady at 4 percent this year and at 4.1 percent in 2001. The Association believes the Fed will stand pat on rates next week but sees interest rates climbing another 50 basis points by year-end. The industry group also said that inflation still remains the biggest risk to the U.S. economy. See full story.
The 10-year Treasury note declined 1/32 to yield 6.12 percent while the 30-year bond lost 3/32 to yield 5.97 percent following a nearly one-point decline on Wednesday. See Bond Report.
Thursday?s sole economic release came in the form of initial claims, which rose 5,000 to 302,000 in the latest week. View Economic Preview, economic calendar and forecasts and historical economic data.
In the currency market, dollar/yen traded lower, falling 1.0 percent to 104.48 while euro/dollar lost 0.9 percent to 0.9360. See latest currency rates.
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Julie Rannazzisi is markets editor for CBS.MarketWatch.com.
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