MARKET SNAPSHOT--Markets see broad-based strength
Waiting for Fed meeting
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 9:55 AM ET Aug 21, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - Broad-based strength surfaced in the stock market Monday, with financial and technology issues pacing early gains.
The event of the week is Tuesday's Federal Open Market Committee meeting. While Wall Streeters aren't anticipating a change in the fed funds rate target of 6 1/2 percent, their attention will be fixated on the central bank's statement following the conclusion of the meeting for more clarity on the Fed's future course of action. View Economic Preview, economic calendar and forecasts and historical economic data.
Joe Liro of Stone & McCarthy Research Associates pointed to the market's tendency to rally into -- and the day of -- the Fed meeting only to relinquish those gains later in the week.
The Dow Jones Industrials Average ($DJ: news, msgs) advanced 25 points, or 0.2 percent, to 11,072.
For this week, earnings reports will be few and far between. First Call said only 13 Standard & Poor's 500 companies have yet to reveal their results. Second-quarter earnings growth currently stands at 21.6 percent. Only 9 percent of companies missed estimates, First Call said.
While the outlook for the third-quarter remains positive, results aren't expected to be as good as in the second quarter. First Call estimates third-quarter profit growth at 17.6 percent.
Lehman Brothers' Jeffrey Applegate, meanwhile, believes that very rich valuations for the best tech stocks will continue - perhaps for years. Fundamentals are in place for the long business cycle to get longer, the Lehman strategist said in a note to clients.
The Nasdaq Composite ($COMPQ: news, msgs) gained 19 points, or 0.5 percent, to 3,950 while the Nasdaq 100 Index ($NDX: news, msgs) climbed 13 points, or 0.3 percent, to 3,822.
Lehman Brothers' Jeffrey Applegate, meanwhile, believes that very rich valuations for the best tech stocks will continue - perhaps for years. Fundamentals are in place for the long business cycle to get longer, the Lehman strategist said in a note to clients.
The Standard & Poor's 500 Index ($SPX: news, msgs) added 0.3 percent while the Russell 2000 Index ($RUT: news, msgs) of small-capitalization stocks gained 0.3 percent.
Volume came in at 67.1 million on the NYSE and at 135 million on the Nasdaq Stock Market. Breadth was positive, with winners beating losers by 10 to 9 on the NYSE and by 17 to 12 on the Nasdaq.
Separately, Trim Tabs said stock market liquidity was modestly bullish last week at $2.6 billion and notes that initial public offerings will dry up over the past four weeks, with equity fund inflows also likely to slow significantly for seasonal reasons.
Trim Tabs estimates that U.S, equity funds lost $1.3 billion over the three trading sessions ended Aug. 17 for a monthly rate of negative $10 billion. Aggressive growth funds took in $864 million while technology funds lost $125 million.
Specific movers
Bank United (BNKU: news, msgs) lost 1 7/8 to 40 1/2. Washington Mutual (WM: news, msgs) announced Monday it will pony up $1.5 billion to purchase Houston-based Bank United in a bid to boost its presence in Texas. See full story. Washington Mutual shed 15/16 to 31 7/8.
In other merger news, Transocean Sedco Forex (RIG: news, msgs) revealed that it's purchasing R&B Falcon (FLC: news, msgs) for $5.8 billion plus $3 billion in debt, which would create the third largest oil service company in the world. Read the full story. Transocean shed 3 3/16 to 54 1/2 while R&B added 1/4 to 25 7/16.
Chip bellwether Intel (INTC: news, msgs) added 2 7/16 to 73. Lehman Brothers' Dan Niles raised his fiscal year 2000 earnings-per-share estimates to $1.74 from $1.70 and 2001 estimates to $1.90 from $1.85 and has an $88 price target on the stock. In the meantime, Intel plans to exhibit its speedy Pentium 4 microprocessors this week. The chip sector rally is now in its seventh straight session as the Philadelphia Semiconductor Index ($SOX: news, msgs) advanced by 0.4 percent.
Shares of antivirus software companies climbed on Monday following a positive writeup in this week's issue of Barron's, which points to the growing market for that specific kind of software. For example, Network Associates (NETA: news, msgs) tacked on 1 47/64 to 21 1/2 with Barron's suggesting the company trades at modest valuations. Also mentioned in the article were shares of Japan's Trend Micro (TMIC: news, msgs) and Symantec Corp. (SYMC: news, msgs), both of which rose in early dealings.
Bond focus
Treasurys retreated, with buyers sticking to the sidelines awaiting the conclusion of the FOMC meeting on Tuesday.
The 10-year Treasury note dipped 3/32 to yield ($TNX: news, msgs) 5.79 percent and the 30-year bond erased 10/32 to yield ($TYX: news, msgs) 5.71 percent. See Bond Report.
There is no data set for release on Monday. The economic highlights of the week include the durable goods report for July, existing home sales for July and the minutes of the Fed's July 27-28 policy -setting meeting.
In the currency market, dollar/yen (C_JPY: news, msgs) edged down 0.1 percent to 108.20 while euro/dollar (C_EUR: news, msgs) slid 0.4 percent to 0.9034. See latest currency rates.
In the commodity market, September crude added 24 cents to $32.23 while the Bridge/CRB index edged up 0.31 to 220.87.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
