Marc ---
Dow Jones mentions upgrade from CSFirst Boston:
March 29, 1999
Small U.S. Stocks
Small Stocks Rise Sharply
As Techs, Financials Surge
By LARRY BAUMAN
Dow Jones Newswires
NEW YORK -- Small-capitalization stocks rose sharply, but the group nonetheless underperformed the major stock-market averages.
On the day the Dow Jones Industrial Average closed above the highly symbolic 10000 mark for the first time, the Russell 2000 small-cap index was unable to pierce the 400 barrier.
Of course, the Russell has closed above 400 before, and a move to 400 would have left the small-cap measure 18.6% below its April 21, 1998 record close.
The overall Nasdaq market didn't threaten to pass its all-time highs, but the group did post the sharpest gains of the major stock market indexes. The Nasdaq Composite Index ended the day 18.14 points, or 0.7%, shy of its February record close.
The small-cap and Nasdaq markets were bolstered by the strength of technology stocks. Reflecting the dynamic of the overall stock market, larger computer-related stocks outpaced smaller ones.
Within the overall tech sector, a wide range of industry groups jumped significantly higher.
The Nasdaq computer index jumped 4%. The CBOE computer software index rose 4.1%, the Philadelphia Stock Exchange semiconductor index gained 3.6%, and the American Stock Exchange Internet index climbed 4.4%.
The small-cap market also got strong support from financial-services stocks, which make up the largest industry group in the Russell 2000. The Nasdaq nonbank financial index rose 2.5%.
Overall, all eight Nasdaq industry indexes posted gains, with seven rising at least 1%, and five of those gaining 2% or more.
The Russell 2000 index of small-capitalization stocks rose 5.84, or 1.48%, to 399.76, and the Nasdaq Composite Index, at 2492.84, surged 73.67, or 3.05%.
The New York Stock Exchange Composite Index added 10.81, or 1.79%, at 613.16, and the Dow Jones Industrial Average, at 10006.78, leapt 184.54, or 1.88%.
On the Nasdaq, advancing issues led decliners, 2,125 to 1,723, on national market volume of 816 million shares and overall volume of 870 million, compared with 770 million and 828 million, respectively, Friday.
Since the start of the year, the small-cap market hasn't benefited from the strength displayed by the Dow industrials during its push to 10000. Indeed, while the Dow industrials is up almost 9% on the year, the Russell 2000 has fallen more than 5% since the start of 1999.
But some analysts say that the Dow industrial's move above 10000 may pay dividends for the small-cap market.
"I think some trickle down has to occur," said John Lynch, director of investment strategy at Interstate/Johnson Lane. He said the outlook for a broadening of the stock market's strength is likely to be bolstered by the economic data that will be released later this week, including the March employment report.
While the race for Dow 10000 took center stage in the financial markets, there is little fundamental difference between 10006 and 9998. Nevertheless, analysts say that by passing through the highly anticipated barrier will draw attention to the high share-price valuations at which blue-chip stocks are trading.
The Dow's move over 10000 "will cause people to seek out more attractive values," Mr. Lynch said.
The small-cap market is a likely place for value-seeking investors to move. Not only are the share prices for small-cap issues low, in terms of where they stood six months or a year ago, but the strength of their earnings have served to create low price-earnings valuations.
Mr. Lynch expects the average S&P 500 company will post first-quarter earnings growth of about 7%, but said that the average Russell 2000 company is likely to post stronger earnings growth, "especially in the techs," as well as in regional banks and financial services.
The combination of low share prices and strong earnings "could add to their momentum," Mr. Lynch said.
But he was quick to add that while small-cap stocks may see a substantial pick up in their upward momentum, "it's too early to hand off the leadership baton" to the small-cap market.
Platinum Technology International, a Oakbrook Terrace, Ill., software company, more than doubled its market value, surging 14 3/16, or 144%, to 24 1/16. Platinum agreed to be acquired by Computer Associates International for $29.25 a share.
CompUSA, which trades on the New York Stock Exchange, leapt 1 9/16, or 27%, to 7 7/16. The Dallas computer and accessory retailer unveiled its CompUSA Net.com unit in conjunction with the revamping of the company's online sales structure.
NYSE-traded Neff, a Miami equipment-rental company, climbed 1 1/4, or 22%, to 7. Neff said that it hired the investment firm of Donaldson Lufkin & Jenrette to form alternatives to help shareholder value. Neff said it is considering a sale of all or part of Neff, a recapitalization or a spin-off.
Integra LifeSciences, a Plainsboro, N.J., medical-device concern, rallied 9/16, or 16%, to 4 1/16. Integra purchased NeuroCare, a maker of neurosurgical implants and monitoring devices, for $25 million in cash and debt. Integra expects the acquisition to add to its earnings and said it will create a new unit, Integra NeuroCare.
Com21 added 3 3/8, or 16%, to 24 3/4. Credit Suisse First Boston restarted coverage of the Milpitas, Calif., communications-solutions provider with a "buy" rating.
Banyan Systems, a Westboro, Mass., software concern, jumped 1 5/8, or 14%, to 13 1/4. Qwest Communications International agreed to provide communications technology in a venture to offer Web-based calling services with Banyan's Switchboard unit.
DA Consulting Group rose 1 1/8, or 14%, to 9 3/8. The Houston company said that it plans to repurchase 250,000 of its 6.6 million outstanding shares.
NYSE-traded Western Gas Resources gained 3/4, or 11%, to 7 11/16 following news that the Denver natural-gas concern agreed to sell its Western Gas Resources Storage unit to UtiliCorp United's Aquila Energy unit for $100 million.
GBC Bancorp tumbled 4 7/16, or 22%, to 15 11/16. The Los Angeles bank-holding company said a borrower with a $31 million loan balance filed for bankruptcy protection. GBC said that it expects an "orderly" sale of the collateral backing up the loan, which will allow it to fully get back the principal, interest and estimated expenses.
Perclose, a Menlo Park, Calif., medical-device company, slipped 7, or 17%, to 34 1/8. Vector Securities International lowered its rating on Perclose to "neutral" from "attractive."
Emisphere Technologies slid 1 1/16, or 11%, to 8 7/8. US Bancorp Piper Jaffray lowered its rating on the Hawthorne, N.Y., bio-pharmaceutical company to "buy" from "strong buy."
Iridium World Communications, a satellite-phone and paging company, fell 1 11/16, or 7.8%, to 19 15/16. Iridium said that it received a 60-day waiver from the financial covenants of its $800 million senior secured credit facility. The company said that it had failed to meet certain minimum subscriber and revenue covenants. Separately, Iridium said that it chief financial officer plans to resign.
Custom Tracks extended its drop from Friday, falling 1 1/8 to 13 13/16. The sell-off was triggered by disappointment that the company didn't release more details about its Internet-transaction payment system.
Advanced Marketing gained 4 3/8 to 16 7/8. The San Diego bookseller was touted in the latest issue of Barron's as a "successful niche player" (see related article).
American depositary receipts of MDSI Mobile Data Solutions rose 1 1/2 to 14 5/8. The Canadian company announced that it had received a contract valued at 13 million Canadian dollars to supply software, professional services and service and maintenance to Telenor IT of Norway, a unit of Telenor. MDSI Mobile develops and implements mobile-work force management and wireless-connectivity software.
SpeedUs.com climbed 3/32 to 3 1/4 after announcing on Friday that it installed a Linux-based Internet gateway transmitter. The New York company, which changed its name from CellularVision USA in January, provides Internet services.
Crown Resources tumbled 1 1/4 to 1 1/2. The Denver mineral company said Battle Mountain Gold has been notified by the U.S. Interior and Agriculture departments that the plan for its joint operations for the Crown Jewel Mine in Washington state can't be approved and that the record of decision for the project has been vacated.
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