<font color=BLUE>MARKET SNAPSHOT-Another mixed bag for shares
Broker stocks climb on DLJ news
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 10:01 AM ET Aug 30, 2000 NewsWatch
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NEW YORK (CBS.MW) - The major averages again took different paths out of the gate Wednesday, with some timid buyers showing up in the technology arena while participants scooped up brokerage stocks in the wake of Credit Suisse First Boston's purchase of Donaldson, Lufkin & Jenrette.
Inside the broad market, brokerage stocks led on the upside, as did bank and paper shares. Putting pressure on the indexes was mild selling pressure in the drug, retail and utility sectors. Within technology, Internet shares rose while semiconductor and computer hardware and software shares slipped.
The Dow Jones Industrials Average ($DJ: news, msgs) lost 25 points, or 0.2 percent, to 11,189 at 10:20 a.m.
Putting the most pressure on the Dow were shares of Coca-Cola, General Electric, Home Depot, IBM and Microsoft while J.P. Morgan, Alcoa and International Paper rose.
The Nasdaq Composite ($COMPQ: news, msgs) added 5 points, or 0.1 percent, to 4,087 while the Nasdaq 100 Index ($NDX: news, msgs) added 3 points, or 0.1 percent, to 3,954.
The Standard & Poor's 500 Index ($SPX: news, msgs) was flat while the Russell 2000 Index ($RUT: news, msgs) of small-capitalization stocks edged up 0.1 percent.
Volume came in at 161 million on the NYSE and at 288 million on the Nasdaq Stock Market. Breadth was mixed, with losers matching winners on the NYSE, while winners beat losers narrowly, by 16 to 15, on the Nasdaq.
Brokerages rally
Ending speculation, which began early Tuesday, Credit Suisse First Boston announced it's purchasing Donaldson, Lufkin & Jenrette in a $11.5 billion deal. Credit Suisse will pay $90 for each share of DLJ, representing a premium of about 10 percent. See full story.
"It's a continuation of a trend that we've seen in the past years. We're seeing more and more consolidation on the sell-side of the business," said Joe Liro, market analyst at Stone & McCarthy Research Associates.
"In terms of strategy, it's a fairly logical move for both sides," he noted.
"The only thing that will stop this trend is when everyone will have bought everyone else," Liro continued.
"There will be more and more pressure on the remaining people on the dance floor to find partners. We know who the candidates are, there are always negotiations going on," Liro concluded.
A rally in brokerages stocks ensued, with the Amex Securities Broker/Dealer Index ($XBD: news, msgs) up 2.3 percent following an over 5-percent rally on Tuesday.
DLJ (DLJ: news, msgs) rose 5.0 percent to 88.25 after surging 25 percent on Tuesday. But shares of DLJDirect (DIR: news, msgs), which surged on Tuesday, tumbled 21.6 percent to 8.63.
"The CSFB-DLJ transaction will be a positive influence on the stock market, and the coming technology companies' earnings will be stronger than people think," said Mike Holland, president of Holland & Co.
The financial arena was chock full of green on Wednesday, with J.P. Morgan (JPM: news, msgs), up 5.81 to 154.81, among the Dow Industrials' upside movers. Within the brokerage arena, Lehman Brothers (LEH: news, msgs) added 2.75 to 143.25 and Bear Stearns (BSC: news, msgs) climbed 2.13 to 65.25. Both are potential takeover candidates.
Treasury focus
Government prices continued their descent, with the 10-year Treasury note off 5/32 to yield ($TNX: news, msgs) 5.82 percent and the 30-year bond was off 1/8 to yield ($TYX: news, msgs) 5.76 percent.
Yields are hovering at their lowest level in about a year as investors' confidence that the Fed will be out of the picture for the next months has swelled. This has brought on some profit-taking on the part of bond dealers this week.
On the economic front, Wednesday's sole piece of economic news came in the form of July leading economic indicators, which edged down 0.1 percent for the third straight month, in line with expectations of economists surveyed by CBS MarketWatch.com. See full story and view Economic Preview, economic calendar and forecasts and historical economic data.
In the currency arena, dollar/yen (C_JPY: news, msgs) was up 0.6 percent to 106.65 while euro/dollar (C_EUR: news, msgs) edged down 0.1 percent to 0.8917.
The market will keep an eye on commodity prices Wednesday as players digest the supply figures from the American Petroleum Institute. Late Tuesday, the API said crude-oil stocks rose 5.3 million barrels in the week ended Aug. 25 to a total of 286 million. The data came in higher compared to analysts' expectations for a 3.7 to 4.1 million-barrel rise. See full story. October crude added 16 cents to $32.90 while the Bridge/CRB index added 0.11 to 224.65.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com. |
