MARKET SNAPSHOT--Techs firm; blue chips eke out gain
Durable goods plunge 12.4%
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 10:28 AM ET Aug 24, 2000 NewsWatch
Latest headlines
NEW YORK (CBS.MW) - Technology issues gained ground in early dealings Thursday, pushing the Nasdaq above the 4,000 level, while blue chips checked in with more modest gains, meandering close to the unchanged mark.
Inside the market, networking, Internet and chip stocks climbed, as did biotech and paper stocks. The most severe selling pressure was exerted on oil stocks, which were among the biggest gainers Wednesday on the heels of a climb in crude oil prices.
The Dow Jones Industrials Average ($DJ: news, msgs) rose 11 points, or 0.1 percent, to 11,155 at 10:22 a.m.
The Nasdaq Composite ($COMPQ: news, msgs) gained 19 points, or 0.5 percent, to 4,030 while the Nasdaq 100 Index ($NDX: news, msgs) edged up 25 points, or 0.6 percent, to 3,922.
The Standard & Poor's 500 Index ($SPX: news, msgs) added 0.1 percent while the Russell 2000 Index ($RUT: news, msgs) of small-capitalization stocks edged up 0.4 percent.
Volume checked in at 74.4 million on the NYSE and at 168 million on the Nasdaq Stock Market. Breadth was mixed, with losers matching winners on the NYSE while advancers beat decliners by 16 to 12 on the Nasdaq.
Specific movers
VA Linux Systems added 6 1/4, or 17 percent, to 43 3/8. The company (LNUX: news, msgs) reported after the close Wednesday a fourth-quarter loss of 10 cents a share, less than the First Call estimate of a loss of 15 cents. Among other players in the Linux group, Red Hat (RHAT: news, msgs) climbed 2 3/4 to 25 9/16 while Canadian-based Corel (CORL: news, msgs) added 1/2 to 3 21/32.
WR Hambrecht upped VA Linux to a "strong buy" rating following the company's stellar earnings report and set a $60 price target. Saying the stocks' current valuation does not reflect its solid progress and renewed positive outlook. WR Hambrecht said the company exceeded their expectations for revenue growth rate, gross margins and movement towards profitability.
CS First Boston raised its fiscal year 2001 revenue forecast for VA Linux from $271 from $323 million and reiterated its "buy" rating and 12-month price target of $65.
J.D. Edwards (JDEC: news, msgs) reported after the close Wednesday a third-quarter profit from operations of 2 cents a share versus the First Call estimate of 1 cent a share and a loss of 7 cents in the year-ago period. ING Barings called the results outstanding in a research note and said total revenues came in at the high end of the preannounced range at $261 million. ING said the company still lacks in valuation by over 50 percent versus its competitors while it continues to gain significant market share. The stock shed 1 to 22 1/2.
Bausch & Lomb (BOL: news, msgs) warned of a shortfall for its fiscal 2000 and 2001 earnings. The company expects 2000 earnings at $2.69 to $2.72 per share and at $2.87 to $2.92 a share for 2001. First Call had expected 2000 earnings-per-share at $3.15 and at $3.84 for 2001. The miss was blamed on a slowdown in the company's vision care segment as well as increasing price pressure on U.S. generic pharmaceutical products. The stock tumbled 33 percent, or 18 1/2 to 37 1/4.
Treasury focus
Treasurys meandered close to the unchanged mark, relinquishing the bulk of its earlier gains. The market briefly picked up some steam on the heels of weaker-than-expected economic data.
The 10-year Treasury note gained 3/32 to yield ($TNX: news, msgs) 5.715 percent and the 30-year bond slipped 2/32 to yield ($TYX: news, msgs) 5.675 percent. See Bond Report.
On the economic docket, Thursday saw the release of durable goods orders for July, which plunged a surprising 12.4 percent compared to expectations for a 5.4 percent drop. Excluding defense, durable goods fell 6.8 percent. See full story. The fall in the figure was due to a record drop in transportation orders - which tumbled 31 percent - driven primarily by aircraft.
"After soaring to new heights in June, the demand for aircraft and parts crashed and burned in July. When we look at transportation as a whole, orders have been relatively flat this year, which is especially glaring when we consider that total durable goods orders are up nearly 10 percent so far," said Joel Naroff, chief economist at Naroff Economic Advisors.
"Durable goods orders growth seems to be slowing slightly, enough to give a hint that manufacturing activity may moderate in the months ahead. But neither is it clear how much of a production cutback we will see nor is it obvious how quickly that will show up,' Naroff concluded.
In other news, weekly initial claims added 4,000 to 314,000. Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, dollar/yen (C_JPY: news, msgs) continued its descent following Wednesday's severe sell-off, with the pair off 0.2 percent at 106.83. Euro/dollar (C_EUR: news, msgs) edged up 0.2 percent to 0.9041. View latest currency rates.
In the commodity arena, October crude shed 30 cents to $31.72 after rallying ion Wednesday following the release of API supply data revealing another surprising drop in inventories. while the Bridge/CRB index added 0.56 to 221/08.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
