MARKET SNAPSHOT----TECH STOCKS ON FIRE
Markets in rally mode
Internet, financial stocks lift
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 10:55 AM ET Jul 12, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - Helped by good buying interest in Internet and financial stocks, the broad market staged a healthy advance Wednesday. The Nasdaq, buoyed by buying interest in its big-cap names, led the advance after falling for two straight trading sessions.
Inside the market, Internet and chip stocks encountered the best buying interest while the overall market saw hefty gains in brokerage and bank shares. Paper, oil service and drug issues retreated.
The Dow Jones Industrial Average rose 64 points, or 0.6 percent, to 10,792 at 10:30 a.m.
Upside movers included J.P. Morgan, International Paper, Citigroup and Walt Disney. On the downside were shares of United Technologies, DuPont and Merck.
The Nasdaq Composite added 76 points, or 1.9 percent, to 4,032 while the Nasdaq 100 Index gained 84 points, or 2.3 percent, to 3,829.
The Standard & Poor's 500 Index climbed 0.7 percent while the Russell 2000 Index of small-capitalization stocks put on 1.0 percent.
Volume came in at 241 million on the NYSE and at 409 million on the Nasdaq Stock Market. Winners outnumbered losers by 12 to 9 on the NYSE and by 19 to 10 on the Nasdaq.
Sector movers
A merger boosted the financial group as Switzerland’s UBS said it’s acquiring PaineWebber (PWJ: news, msgs) in a $10.8 billion cash and stock deal. UBS said it would pay $73.50 per share for PaineWebber -- a 47 percent premium to PaineWebber’s closing price on Tuesday. See full story.
PaineWebber jumped 17 5/16, or 34.3 percent, to 67 1/4 and the Amex Securities Broker/Dealer Index ($XBD: news, msgs) jumped 6.3 percent to its highest levels since the end of March.
Among financial stocks reaching fresh 52-week highs on Wednesday were Merrill Lynch, Citigroup, Legg Mason, A.G. Edwards and Raymond James Financial.
PaineWebber has for long been a holdout to stay independent but it obviously decided it’s not in the firm’s best interest, according to art Hogan, chief market strategist at Jefferies & Co.
There are a lot of rumors about consolidation in the space, Hogan continued, and the brokerage group trades like it believes there will be another union soon. He believes the next merger will again involve a European counterpart.
Today on CBS MarketWatch
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In the meantime, PaineWebber posted Wednesday second-quarter earnings of 95 cents a share, beating the First Call estimate by three cents. The company made $1.02 per share in the previous quarter. Read the story.
Internet stocks lifted, underpinned by a rally in Yahoo shares, which climbed 12, or 12 percent, to 117 1/2 in response to an impressive earnings report. And the Goldman Sachs Internet Index ($GIN: news, msgs) jumped 5.3 percent while Merrill Lynch’s Internet Holdrs (HHH: news, msgs) added 3.3 percent. Other Net bellwethers that came under the gun on Tuesday recovered nicely Wednesday with EBay (EBAY: news, msgs) up 7 percent, or 3 1/8 to 47 1/16, and Amazon (AMZN: news, msgs) up 1 13/16 to 34 15/16.
Yahoo (YHOO: news, msgs) reported after the close Tuesday a second-quarter profit of 12 cents a share, 2 cents ahead of the First Call estimate. The company made a 5-cent profit in the year-ago period. Read the story. Net revenues totaled $270.1 million for the quarter compared to $128.6 million in the second quarter, an increase of 110 percent. On Wednesday, Dain Rauscher cut it price target on Yahoo to a $150 from $225.
Meanwhile, Biogen posted after the close a second-quarter profit from operations of 43 cents a share, beating the First Call estimate by a penny. The stock (BGEN: news, msgs) added 1 3/16 to 71 3/16.
In earnings news Wednesday, Abbott Laboratories (ABT: news, msgs) posted second-quarter earnings of 44 cents a share, matching the First Call estimate. The company made 41 cents in the year-ago period. The stock fell 3/16 to 42 13/16. See full story.
Rite Aid announced Wednesday it’s selling its PCS Health Systems unit for $1 billion. Advance Paradigm (ADVP: news, msgs) is buying 100 percent of the equity of Rite Aid's PCS Health Systems. See full story. Rite Aid lost 3/4 to 5 7/8 while Advance Paradigm fell 7/16 to 22 1/8.
After the close Tuesday, Rite Aid (RAD: news, msgs) posted a first-quarter loss of 92 cents a share compared to a restated loss of 17 cents in the year-ago quarter. First Call had projected a loss of 8 cents a share.
Treasury focus
Bond prices traded lower, with little in the way of economic news to provide direction. The negativity in bonds in early trading has been generated by the rally in the stock market.
Moreover, the market must wade through more supply in the corporate market as well as an auction of 10-year TIPS, or Treasurys that carry inflation protection.
The 10-year Treasury note lost 9/32 to yield 6.09 percent while the 30-year bond shed 6/32 to yield 5.90 percent.
There is no economic news on tap for Wednesday. Fed Chair Alan Greenspan will speak Wednesday evening in New York regarding the global economy. View Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, dollar/yen gained 0.9 percent to 108.10 -- its highest level since early June -- while euro/dollar edged slipped 0.4 percent to 0.9480. See latest currency rates.
An improved tone in the stock market is likely to support the dollar Wednesday. In the meantime, speculation that the Bank of Japan will raise interest rates when it meets on July 17 has increased. A move by the BOJ would end the central bank’s zero interest-rate policy, which has been in effect since February 1999.
In the commodity market, August crude lost 10 cents to $29.60 while
the Bridge CRB index added 0.16 to 220.27. |
