Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: JRI who wrote (96795)	2/10/1999 11:11:00 AM
From: Mohan Marette	Respond to of 176387

Pundit speak-Larry Wachtel-Prudential Securites.Market commentary. John: It is the 'Mo & Schmoe' show? Nice ring to it for sure.<vbg> ================= February 10, 1999, 8:45 a.m. EST DJIA 9133.03 -158.08 as of Tuesday's close on February 9, 1999 Nobody's perfect. Yet, at the end of January we had a handful of big cap stocks that were priced to perfection. What has been going on in this corrective period is the unraveling of these nifty-fifty stocks that dominate the well-known indices but which have become alienated from the broad market. For example, last year NASDAQ put in a gain of 39.6%. Take out Microsoft and the gain falls to 23%. Take out Microsoft, Intel, Cisco, Worldcom and Dell and the return for NASDAQ becomes negative 7.3%. So, if NASDAQ is getting smashed these days, we are really correcting the excesses of five stocks. Meanwhile, the average NASDAQ stock is still 38% off its 52-week high, the average S&P 500 issue is down 22% and the average New York Stock Exchange issue is down 31%. This has always been the dilemma on Wall Street: How do you measure the market? While there is a lead time between the deterioration of breadth and the impact on the narrowly focused indices, if the troops flounder, inevitably the generals must retreat. As for this morning, futures are stabilizing overseas so that the opening might be placid enough. Problem is the market day is 6 ½ hours and what happens at the opening provides not a clue as to the close. In a weak market environment, traders usually sell into strength so that any bottoming to this correction must come from internal dynamics and yesterday's volume was not the stuff of bottoms. It is ironic that this tech meltdown is coinciding with two major tech conferences. The decline began in the throes of the Montgomery Securities conference last week and continues as the Goldman Sachs conference moves into its third day. And we are sure that Michael Dell made a sparkling keynote speech yesterday morning, during which time Dell Computer was getting smashed. Maybe the 53 multiple has something to do with it. As for foreign markets, a dive in New York usually means weak overseas markets. In Asia, Japan closed steady but Hong Kong fell to a four month low on concern that interest rates will rise. All the major European markets are opening mildly lower and there is some sporadic bargain hunting of U.S. stocks in London. Microsoft has shown some bounce in Europe. The company says it is interested in buying Internet technology companies. Monsanto is doing well on reports of continued success of its new drug to treat arthritis. General Instruments is higher on reports that they will beat Street estimates while Pharmacia Upjohn is expected to say fourth quarter earnings rose to 45 cents against 35 cents last year. Certainly the action in Lycos will be followed closely today. It was the disappointing deal announced yesterday for the third largest portal company that crunched the Net Stocks and contributed to the high tech debacle. Today, we will determine whether there are any second thoughts about the deal. Internet stocks need a sense of euphoria to retain their unprecedented gains and we are in the not-so-sweet stage of sobriety. U.S. bonds were little changed in London after rising yesterday with the long bond yield at 5.30%. Yesterday's sale of $15 billion of new five-year notes drew only mediocre demand. Today, the market is challenged with the sale of $10 billion in 10-year notes. Looks steady at the opening but there are miles to go until the bell. Finally, on this date in 1964, the Beatles make their U.S. debut. Time flies. prusec.com