MARKET ACTIVITY/ TRADING NOTES FOR DAY ENDING TUESDAY JUNE 10 1998 (2)
MARKET OVERVIEW, Con't
Technology stocks
Profit warnings and Asia worries dragged the Morgan Stanley High Tech Index (MSH) down 11.32 to 548.90 and the Nasdaq 100 Index (NDX) down 24.16 to 1,199.32.
Leading the way was Lattice Semiconductor (LSCC), which fell 9 5/8 to 26 7/8. The semiconductor maker warned Tuesday that first-quarter earnings will fall well below analysts' estimates of 58 cents a share.
Texas Instruments (TXN) fell 3 11/16 to 52 3/16 after International Business Machines (IBM) said it will spend more than $100 million to develop a custom microchip business to compete with Texas Instruments' digital-signal processors. IBM shares dropped 1 15/16 to 117 5/16.
Also declining were Xilinx (XLNX), off 1 7/16 to 34 1/2; Micron Technology (MU), down 2 3/16 to 23 11/16; LSI Logic (LSI), off 1 7/16 to 23 9/16; and Analog Devices (ADI), down 1 5/8 to 24 1/4. Sector leader Intel (INTC) was off 1 5/8 to 68 9/16.
The Philadelphia Semiconductor Index (SOX) lost 17.94 to 242.84.
Western Digital Corp. (WDC) tumbled 4 5/16 to 11 3/16 after saying on Tuesday that it expects to report a $100 million loss from operations in its fiscal fourth quarter.
Read-Rite Corp. (RDRT) fell 3/4 to 7 9/16 after the maker of recording heads for computer disk drives said it expects its third-quarter loss to be wider than analysts' estimates.
Other names in the disk-drive and component sphere were also lower, including Seagate Technology (SEG), down 1 1/4 to 22 3/16.
Elsewhere, Manugistics Group (MANU) fell 3 to 21 11/16 after saying Tuesday that it lost 32 cents per share in its first quarter, in line with expectations that had been lowered after the company's profit warning on May 21.
Premiere Technologies Inc. (PTEK) fell 4 1/16 to 10 3/8 as the provider of voice-mail and conference-calling services said it expects to post second-quarter and full-year losses because two big customers haven't paid their bills.
Integrated Sensor Solutions (ISNR) fell 2 7/16 to 5 5/8 as the maker of sensor products for electronic control systems said it lost 22 cents per share for its fourth quarter, compared with break-even results a year ago.
MTI Technology Corp. (MTIC) dropped 1 5/8 to 8 3/4 after warning investors Tuesday that weakness in its European operations will results in first-quarter earnings below analysts' estimates.
A profit warning also weighed on shares of Genicom (GECM), which fell 3 1/16 to 3 13/16.
Qwest Communications International Inc. (QWST) fell as much as 1 to 32 11/16 as AT&T (T) said it plans to file a request with the Federal Communications Commission to halt Ameritech's (AIT) marketing of Qwest's long-distance service. AT&T rose 2 1/16 to 63 7/16 while Ameritech gained 1/2 to 44 5/16.
Ingram Micro (IM) fell 1/4 to 39 5/8 after saying it will pay $100 million in cash to Tech Data (TECD) for its majority interest in Munich-based Macroton AG. Tech Data slid 3/4 to 37.
FieldWorks (FWRX) fell 9/16 to 2 7/8 after the computer company that provides customer-specific products said revenue and earnings for its fiscal second quarter will be lower than expected.
The Internet stocks were unable to sidestep the ill winds in technology, sending the AMEX Internet Index (IIX) down 3.88 to 333.02.
Still, Amazon.com (AMZN) jumped 2 7/8 to 54 1/8 after the online book retailer said enrollment in its "Associates" program has doubled in the past four months to more than 60,000 members.
Internet search-engine maker Inktomi (INKT) doubled from its initial public offering price of $18. Some 2.2 million shares were offered.
America Online (AOL) gained 11/16 to 89 1/4 after Lehman Brothers reiterated a "buy'' rating on the online service.
Netscape Communication (NSCP) rose for a second day, up 15/16 to 25 1/8, after president and CEO James Barksdale fulfilled a pledge to raise his stake in the Internet-software company.
FactSet Research Systems (FDS) rose 1 5/8 to 32 1/2 after producing fiscal third-quarter earnings of 30 cents per share, a 36% rise from year-earlier levels. The company provides online integrated database services to the investment-management and investment-banking communities.
CNET (CNWK) rose as high as 52 1/2 but the stock closed off 2 1/4 at42 7/8.
Also falling was Yahoo! (YHOO), which slid 3 7/16 to 1114 7/16 following a steep rise Tuesday. Additionally, Excite (XCIT) fell 2 to 63 and Infoseek (SEEK) closed off 1 3/16 to 26 1/16.
Among technology's other bellwethers, Microsoft (MSFT), closed down 1 1/16 to 86; Dell Computer (DELL), ended off 1 13/16 to 83 11/6; and Hewlett-Packard (HWP), which fell 1 1/4 to 62 7/16.
Computer Associates (CA) bucked the trend, rising 1 3/16 to 55 3/16.
STAR Telecommunications Inc. (STRX) rose 1 to 29 1/8 on word that it agreed to acquire privately held PT-1 Communications Inc., a prepaid debit phone-card company.
Lernout & Hauspie NV (LHSPF) fell 1 to 54 1/2 after saying it bought a 24.5% stake in Accent Software International (ACNTF), which closed up fractionally.
Parlex (PRLX) rose 2 1/8 to 15 3/8 on expectations of record orders for its flexible interconnects, which transfer signals between electronic components.
Active issues
3M (MMM) was the biggest drag on the Dow, shedding 4 3/16 to 88 11/16 following a downgrade at Morgan Stanley, which cited concerns about Asia.
Philip Morris (MO) fell 1 7/8 to 38 3/8 after Brown & Williamson was found liable by a Florida jury for the lung-cancer death of a longtime smoker. Other tobacco makers fell on the news, including Loews (LTR), down 1 15/16 to 89 1/16.
Boeing Co. (BA) fell 3/4 to 45 7/16 after announcing it will cut production of jumbo 747s by 30% next year.
United Technologies (UTX) dropped 3 11/16 to 87 1/4 after a trade journal reported the potential loss of a major customer.
Other names weighing on the Dow included Caterpillar (CAT), off 2 7/16 to 53 7/8; Alcoa (AA), down 1 11/16 to 66 15/16; and Union Carbide (UK), off 1 5/8 to 47 7/8.
Walt Disney Co. (DIS) rose 2 3/16 to 118 5/16 after its shareholders approved a 3-for-1 stock split
Manor Care (MNR) rose 4 5/8 to 35 5/8 as the company and Health Care & Retirement Corp. (HCR) agreed to merge in a stock swap valued at about $3.5 billion. Health Care & Retirement fell 5/8 to 37 1/8.
Bond market gains continued to drive the financial-services sector, which in turn provided the strongest positive pull on the broader markets. The Philadelphia KBW Banking Index (BKX) rose 2.94 to 855.
Gainers in the sector included Dow member J.P. Morgan (JPM), up 11/16 to 123 7/16, and BankAmerica (BAC), higher by 1 1/8 to 86 3/4.
The AMEX Drug Index (DRG) rose 0.92 to 652.12, although Pifzer (PFE) slid 3 5/16 to 109 1/8 amid continued revelations about deaths of Viagra users. The drug has not been found responsible for any of the deaths.
Leading higher were Dow member Johnson & Johnson (JNJ), up 3/4 to 72 13/16; Bristol-Myers Squibb (BMY), which gained 1 9/16 to 113 3/4; and SmithKline Beecham (SBH), up 1 3/16 to 58 3/16.
The oil sector remained in a rut, with the AMEX Oil Index (XOI) down 4.51 to 466.45 and the Philadelphia Oil Service Index (OSX) off 3.18 to 94.58.
Ceanic (DIVE) climbed 2 3/8 to 17 13/16 after the oil-services company was purchased by Scotland-based Stolt Comex Seaway SA (SCSWF) for $222 million. Stolt Comex shares were off 5/8 to 29 3/16.
Transportation issues failed to capitalize on the weak oil stocks on this day, however. The AMEX Airline Index (XAL) slid 2.18 to 373.92. However, Airborne Freight (ABF) rose 1 15/16 to 35 7/8.
Plenum Publishing Corp. (PLEN) gained 3 5/8 to 72 5/8 after the scientific and technical publisher agreed to be acquired by Wolters Kluwer NV for $258 million, or $73.50 a share.
Consolidated Cigar Holdings (CIG) fell 1 3/8 to 11 5/16 after the cigar maker warned that second-quarter profits will be lower than the year-ago results and analysts' estimates.
Belden (BWC) fell 6 9/16 to 32 5/16 after the maker of wire, cable and cord products said it expects second-quarter earnings to fall below expectations.
A profit warning also hit shares of International Total Services (ITSW), which shed 6 3/4 to 11 1/2.
INTERNATIONAL
Australia hit by yen's contagion
LONDON -- Contagion from Japan's ailing yen and its impact on the Chinese yuan ripped through Asian markets yesterday, sending Hong Kong stocks plunging nearly 5% and putting the screws to the A$.
Among other regional casualties, shares in Singapore, Malaysia, India and Thailand fell 3% to 5% as nervous investors bolted.
Asian stock markets sank Wednesday as the U.S. dollar climbed to a new seven-year high against the Japanese yen, sparking fears that China would soon be forced to devalue its currency.
Hong Kong's main stock index fell 4.9 per cent, and key market indicators lost 4.3 per cent in Korea, 3.1 per cent in Malaysia and Taiwan and 1.2 per cent in Japan. The benchmark Thai index closed at its lowest level in more than 10 years, while the index in Singapore fell to a 9-year low.
Southeast Asian currencies also sank against the U.S. dollar.
Many investors were reluctant to bid up stocks and currencies ahead of a meeting of finance officials from the Group of Seven industrialized countries scheduled to open in Paris later Wednesday.
"No one knows what will come out of the G-7 deputy's meeting and people are nervous," said Yasuhisa Morikuni, assistant vice-president at Bank of America.
The unease stems from concern the yen could fall further against the dollar if officials attending the G-7 meeting do not issue a statement pledging to support the battered Japanese currency.
In late afternoon trading, the U.S. dollar bought 140.84 yen, up 0.48 yen from late Tuesday in Tokyo. The currency moved as high as 141.57 yen during trading in Japan, its highest level since June 1991.
Tokyo's benchmark 225-issue Nikkei Stock Average fell 190.91 points, or 1.23 per cent, closing at 15,339.26.
The yen's fall has made the price of Japanese exports cheaper in foreign markets. Investors worry that a further drop in the yen will force Japan's Asian neighbors, including China, to devalue their currencies to remain competitive.
Hong Kong's chief executive reiterated Wednesday that the government will maintain the currency peg to the U.S. dollar, saying floating the currency would "cause speculative attacks against the Hong Kong dollar and increase interest rates."
His comments immediately sparked a surge in the interbank interest rates, which dragged down share prices.
Hong Kong's benchmark Hang Seng Index dropped 412.09 points to close at 7,979.37, adding to Tuesday's 2.3 per cent drop.
"It was mostly panic-selling by the big fund houses. They were reducing their weightings on Hong Kong stocks," said Francis Lun, research analyst at Pacific Challenge Securities Ltd.
In Seoul, the benchmark index plunged 4.3 per cent to 324.54.
The bears had the run of Europe's markets for much of the day, but wandered off toward the end as World Cup '98 prepared for kickoff.
London:Britain's leading share index ended down but managed to claw back some ground in late trading after U.S. Federal Reserve Chairman Alan Greenspan said he saw no reason to tighten monetary policy yet. The FT-SE 100 index closed atV5987.4, down 32.4 points or 0.5%. The erosion of Asian market prices had a knock-on effect on shares in the banks that do big business in the region, with HSBC Holdings PLC retreating 75 pence to 1,419p and Standard Chartered PLC falling 20.5p to 693.5p.
Frankfurt: German stocks closed at a record high after earlier passing the key 5800 level. The Dax 30 index closed at 5754.46, down 5.57 points, but in later screen-based trade, the Xetra Dax ended at 5799.22, up 25.45 points, or 0.4%. Volkswagen AG shares ended the day 108 marks stronger at 1,633 marks, helped by an upgraded "buy" recommendation from Merrill Lynch.
Tokyo: Stocks fell on worries the region's economic woes could further increase the weight of bad loans extended by Japan. The benchmark 225-share Nikkei average surrendered Tuesday's sharp gains to end down 190.91 points, or 1.2%, at 15,339.26.
Sydney: The plummeting A$ sapped confidence on the Australian market, with the all ordinaries index falling 31 points, or 1.2%, to 2592.9.
Thursdays world markets: Mixed
HONG KONG - Some Asian markets rebounded on bargain hunting Thursday after a sharp fall in the Japanese yen against the U.S. dollar sent stocks and currencies across Asia down in early trading.
But investors said the markets were only taking a breather, and warned of more turbulence if the yen's weakness persists.
"I wouldn't say we've turned the corner. Aside from the weak yen dragging Southeast Asian currencies lower, a lot of attention is on the yen's implications for the Chinese yuan and the Hong Kong dollar," said Daragh Maher, an economist at ING Barings in Singapore.
Early Thursday, the yen slid to a new seven-year low against the U.S. dollar on the absence of yen-supportive comments after Wednesday's meeting of finance officials from the Group of Seven industrialized nations.
Growing concerns about a new round of financial turmoil in Asia led to safe-haven dollar buying, traders said.
In late Asian trading, the dollar bought 141.68 yen, up 0.84 yen from late Wednesday in Tokyo and also above its late New York rate of 141.43 yen overnight.
The U.S. currency moved as high as 142.10 yen, its highest level in Tokyo since Sept. 6, 1990, when it reached 142.45 yen.
Tokyo's benchmark 225-issue Nikkei Stock Average lost 325.22 points, or 2.12 percent, closing at 15,014.04 points, adding to Wednesday's 1.23-percent fall.
In Bangkok, stock prices slumped for a fifth consecutive day as foreign investors dumped big-capitalization stocks, sending the benchmark Stock Exchange of Thailand index down 2.8 percent, to 283.92, its lowest level in 10-1/2 years.
In Hong Kong, higher domestic interest rates further depressed investor sentiment and sent the benchmark index down for the third straight day.
Adding to Wednesday's 4.9-percent loss, the blue-chip Hang Seng Index ended down 93.30 points, or 1.2 percent, at 7,886.07, the lowest level since Feb. 1995.
The index has lost 8.16 percent in the last three sessions.
In Taiwan, the benchmark Weighted Price Index ended at a five-month low, closing 12.39 points lower at 7,210.74, as concerns over the weak local currency dragged stocks down, analysts said.
But the New Taiwan dollar was pushed higher late Thursday by heavy central bank intervention, estimated around dlrs 100 million.
In Manila, the Philippine peso and stocks plunged further, with the key Philippine Stock Exchange Index dropping 4.6 percent to 1,829.02, its lowest level since January.
The peso averaged 40.319 pesos per dollar for the day, compared to 39.775 pesos on Wednesday.
In Kuala Lumpur, share prices continued to fall, with the key Composite Index finishing 1.4 percent lower at 483.00 points.
The Malaysian ringgit was mostly steady against the dollar in late trading, after sliding to 4.0500 against the U.S. currency. It was trading late Thursday at 3.9875 to the dollar, marginally up from 3.9800 late Wednesday.
In Jakarta, the rupiah plunged in morning trading below the psychologically important level of 14,000 against the U.S. dollar, following an order from Bank Indonesia, the central bank, for banks to settle their foreign exchange interbank debt and trade-finance arrears by Thursday.
But it rebounded later on profit taking, trading at 13,750 to the dollar, down from 13,450 late Wednesday.
In the stock market, late buying in stocks of state enterprises pushed up the key JSX composite index, which closed up 3.464 points at 411.544 points.
Investors said there was speculation that the government has found strategic investors in some state-owned companies.
In Singapore, the stock market recovered somewhat the key index plunged to a 9 1/2-year low Wednesday.
The key Straits Times Industrials Index closed 1.7 percent higher at 1,086.83 points.
The Singapore dollar weakened further, briefly touching 1.75 to the U.S. greenback before recovering to 1.7360 by late afternoon.
New Zealand shares also fell for the 11th straight session, with the key index falling nearly 59 points, or 2.8 percent, closing at 2,008.78 points.
Elsewhere:
Sydney: Australian share prices fell for the eighth consecutive day, with the key index closing 1.3 percent lower at 2.592.9 points.
Seoul: Share prices closed mixed, with the key index closing 4.16 points higher at 328.70 as investors settled massive amount of June stock futures contracts by buying stocks, analysts said.
London: at midday on the London Stock Exchange, the Financial Times 100-share index was down 49.7 points to 5,937.7
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