MARKET SNAPSHOT
Buyers take major averages higher
Greenspan: productivity gains have staying power
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 11:36 AM ET Jul 11, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - Stock prices put on a showing of strength Tuesday, led by big-cap technology issues. But buying interest in cyclical and financial issues placed the Dow Industrials solidly in positive territory as well.
Bill Schneider, head of block trading at UBS Warburg, said Fed Chair Alan Greenspan’comments on productivity and technology gave reassurance to the bulls.
Greenspan spoke Tuesday morning on the “New Economy” before the National Governors Association. The Fed Chief repeated his familiar view that many of the technology-enhanced productivity gains behind the U.S. economic expansion are here to stay. See full story.
Buyers came back to the technology sector after taking a backseat on Monday, benefiting the chip and networking sectors in particular. Only Net stocks slipped due to heavy losses in bellwether issues such as Yahoo, Amazon and EBay. The broader market witnessed advances in the oil service, retail and biotech sectors while some weakness was detected in the utility and transportation groups.
“Buying on dips seems to be working but we need to see some more volume to confirm a commitment to rally,” Schneider said.
The Dow Jones Industrial Average tacked on 119 points, or 1.1 percent, to 10,765 at 11:34 a.m.
Alcoa was again the blue-chip barometer’s upside mover after posting better-than-expected earnings on Monday. Also higher were shares of Caterpillar, Boeing, Exxon Mobil and Honeywell. On the downside were shares of Coca-Cola, AT&T and Walt Disney.
The Nasdaq Composite added 39 points, or 1.0 percent, to 4,019 while the Nasdaq 100 Index gained 46 points, or 1.2 percent, to 3,818.
The Standard & Poor's 500 Index edged up 0.7 percent while the Russell 2000 Index of small-capitalization stocks rose 0.3 percent.
Volume came in at 390 million on the NYSE and at 672 million on the Nasdaq Stock Market. Winners outpaced losers by 14 to 11 on the NYSE and by 19 to 17 on the Nasdaq.
In the meantime, earnings reports will remain in the spotlight. Dow-component International Paper (IP: news, msgs) reveals its quarterly results Tuesday, with First Call predicting earnings of 74 cents a share for the second quarter. Shares added 5/8 to 32 7/8. Among other companies set to report are Bestfoods (BFO: news, msgs) and Biogen (BGEN: news, msgs).
And Yahoo (YHOO: news, msgs) is set to report second-quarter results after the close of trading Tuesday. First Call anticipates earnings of 10 cents a share compared to a 5-cent profit in the year-ago period. Morgan Stanley’s Mary Meeker told her sales force that while the second-quarter would be fine, Yahoo might make an announcement that spending may increase. See Net Stocks.The stock fell 6 to 104, weighing on the Internet sector. In fact, the Goldman Sachs Internet Index ($GIN: news, msgs) fell 1.7 percent while Merrill Lynch’s Internet Holdrs (HHH: news, msgs) lost 3.2 percent. See full story.
There will be some identifiable trends from the upcoming earnings releases, Schneider said, but attention will fall on companies’ comments regarding results going forward.
Specific movers
VoiceStream Wireless (VSTR: news, msgs) put on 14 13/16, or 12 percent, to 139 3/4. Deutsche Telekom has reportedly made a bid to acquire any VoiceStream in a deal valued at over $30 billion. Read the story.
The acquisition offer comes despite Deutsche Telekom’s interest in acquiring Sprint (FON: news, msgs), whose acquisition attempt by WorldCom (WCOM: news, msgs) collapsed recently, according to the Financial Times. Sprint fell 1 3/4 to 50 while WorldCom shed 1 1/4 to 44 1/16. CIBC World Markets lowered Sprint to a “hold” rating from a “strong buy” while WorldCom was downgraded to a “buy” from a “strong buy.”
Merrill Lynch’s Telecom Holdrs (TTH: news, msgs), of which WorldCom and Sprint are components, shed 0.6 percent. Nextel Communications (NXTL: news, msgs) was one of the upside movers, rising 2 1/2 to 66 5/8.
Shares of JDS Uniphase (JDSU: news, msgs) shed 1 1/4 to 99 7/8 after dropping 13 percent on Monday following news that it was purchasing SDL (SDLI: news, msgs) in a $41 billion stock deal. SDL added 1 1/2 to 322 1/8. Merrill’s broadband Holdrs (BDH: news, msgs), of which SDL and JDS Uniphase are components, added 0.9 percent.
Oil service shares were Tuesday’s upside leaders, with the Philadelphia Oil Service Index ($OSX: news, msgs) up 5.5 percent. Halliburton (HAL: news, msgs) rose 3 to 45 after receiving an upgrade to a “buy” from a “market performer” by Donaldson, Lufkin & Jenrette. See Market Pulse.
Biotech shares posted hearty gains, with Merrill’s Biotech Holdrs (BBH: news, msgs) up 2.2 percent, led by advances in genomics-related companies such as Human Genome Sciences (HGSI: news, msgs), up 14 1/2 to 184 1/8 and Affymetrix (AFFX: news, msgs), rising 7 3/8 to 196 1/8.
Aspect Communications (ASPT: news, msgs) tumbled 53 percent, or 23 1/4 to 20 5/8. After the close Monday, the company said it expects pro-forma earnings of 1 to 3 cents a share, which compares to the First Call estimate of a profit of 8 cents a share. Read the story.
Alteon WebSystems tacked on 14 1/16 to 115. The company (ATON: news, msgs) said late Monday that it was profitable in the fourth quarter on an operating basis and that revenue rose 80 percent from the previous quarter. First Call expected Alteon to report a loss of 1 cent per share. See full story and view Movers & Shakers.
Treasury focus
Bond prices traded a touch higher, with the 10-year Treasury note up 3/32 to yield 6.031 percent while the 30-year bond added 9/32 to yield 5.86 percent.
On the economic front, only the second-tier report of wholesale inventories was released, rising by 0.8 percent in May. The market must wait for Friday to get additional information on the U.S. economy’s performance in June. That’s when the producer price index, retail sales and industrial production figures are due out. View Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, dollar/yen fell 0.1 percent to 106.87 while euro/dollar edged down 0.2 percent to 0.9530. See latest currency rates.
In the commodity market, August crude lost 24 cents to $29.45 while the Bridge CRB index lost 0.13 to 219.17.
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Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
