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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: bill meehan who wrote (58413)	5/3/1999 6:19:00 PM
From: gbh	Respond to of 132070

Bill, you da man... From thestreet.com Did Goldman Cook the Golden Goose? "This is all Goldman [Sachs]," one market player claimed. "They've been throwing buy programs all day, ramping up the Dow" to ensure a positive backdrop for their IPO. After the close of trading, underwriters priced 69 million shares of the venerable brokerage firm at $53 a share. At $3.7 billion, the IPO is the second largest in U.S. history, trailing only Conoco's (COC:NYSE) deal last October. "I always thought the Goldman IPO would mark the top of the market, but I didn't think they'd spend all the money from the offering to make it happen," said the source, who requested anonymity. Given the anticipation surrounding the IPO, Bill Meehan, chief market analyst at Cantor Fitzgerald, doubted Goldman was up to anything nefarious, or needed to be. "I've heard a lot of mumbling about Goldman doing this, Goldman doing that, but from what I can gather, there's no paucity of demand," Meehan said. "It's a very strange market. Today you had a steady slide in the Nasdaq and Nasdaq 100 futures, but the only spike is this 3 o'clock action where we have a tendency to spike," regardless of what's happening in the IPO market. Like most, Meehan attributed the bulk of today's advance to the benign NAPM data. At 52.8 the survey showed an expanding manufacturing sector for the third consecutive month but came in below 54.3 in March and expectations for a reading of 54.5. Crude futures getting above $19 a barrel today contributed to the gains, Meehan said, "but I don't think we would have seen this much progress in the Dow and cyclicals had we gotten a bad report on NAPM." The strategist, who has been urging an increasingly cautious stance in recent months, expressed pleasure at the broadening of interest into cyclicals and small-caps but is unnerved by the ferocity of the move. "Rotation in one sense is healthy," he said. "But the manner it's taking place is unhealthy. Is it justified by economics and fundamentals that some cyclicals should move 50% to 70% in a week or two? I'm not sure. It seems like momentum is driving a lot of it and that's not something that makes me feel very comfortable." Noting rising commodity prices are fueling interest in cyclicals, Meehan said: "With the economy we've got and with prospects for global growth looking better, I'm not sure what it means for the Fed. They won't move at this point, but they'll probably announce a bias toward tightening. We're not only seeing asset inflation on Wall Street, we're seeing an appreciable pickup in many markets." Meanwhile, the strategist was a bit "surprised" the bond market didn't "snap back better" on the heels of the NAPM report, particularly after Friday's big losses. The price of the 30-year Treasury bond rose 2/32 to 94 5/32, its yield dipping to 5.66%.