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CNNfn market movers
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January 5, 1999: 2:03 p.m. ET
Chip equipment makers beaming, MCI WorldCom rings up gain, Barra beaten
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NEW YORK (CNNfn) - An early-year harvest of earnings warnings battered several firms Tuesday, while the chip sector rallied and long-distance giant MCI WorldCom dialed up gains.
MCI WorldCom (WCOM ) climbed 4-3/16 to 74-1/16 after Sanford Bernstein opened its coverage with an "outperform" rating, citing sustainable earnings streams and a strong position in the data market.
Salomon Smith Barney also raised its 12-month price target on the stock to $100 from $80 and reiterated its "buy" rating.
And separately, OzEmail (OZEMY ), the largest Internet service provider in Australia, recommended shareholders approve MCI Worldcom's $250 million takeover bid.
The American ISP EarthLink Network (ELNK ) added 2-13/16 to 65-1/4 a day after shooting up 5-7/16, following news that it saw membership double last year. Meanwhile, Everen Securities kept a long-term rating of "outperform" on the stock Tuesday.
Elsewhere in the sector, Raychem (RYC ) dropped 4-3/8 to 28-3/4 after the maker of telecommunications products said it expects to earn 40 cents in the fiscal second quarter, but Wall Street analysts had expected a profit of 48 cents.
The American depositary receipts of the German software giant SAP (SAP ) plunged 2-9/16 to 32, after warning its fourth quarter will be disappointing due to weak sales in Japan.
Salomon Smith Barney cut SAP to an "outperform" from "buy."
Suffering from the market hard knocks first-hand was Barra (BARZ ), down 4-3/8 to 19-1/4. The market-analysis software maker said Monday it expects fiscal third-quarter profit between 15 and 25 percent below the 39 cents a share posted a year-ago.
Barra cited lower-than-expected revenue at its asset-management business. Analysts polled by First Call expected earnings of 43 cents a share.
Chip-equipment makers roll
A positive outlook from the high-tech investment bank Soundview Financial lifted the fortunes of some top computer chip equipment makers.
Kla-Tencor (KLAC ) climbed 5-1/8 to 50-7/8 after Soundview raised the company to a "strong buy" from "hold," boosted its earnings target to 12 cents a share from 8 cents a share, and set a six- to 12-month price target of $55 to $60 on the stock.
Emerging from product performance woes, LAM Research (LRCX ) shot up 4-15/16 to 23-15/16, or 26 percent. Soundview raised the company to a "buy" from "hold" and set a price target of $27.
Teradyne (TER ) climbed 3-13/16 to 45-15/16 after receiving a "strong buy" rating from "buy" and a price target of $65 a share. And Etec Systems (ETEC ) gained 2-1/4 to 43 after Soundview set a price target of $60.
Mixed picture for biotech firms
Investors took a healthy view of QLT Phototherapeutics (QLTIF ), shooting up 4-11/16 to 27-3/8, after the Canadian maker of light-activated drugs and Ciba Vision, a unit of Switzerland's Novartis AG, said test results show their Visudyne therapy helps preserve vision in patients with age-related macular degeneration.
Elsewhere in the biotechnology sector, SangStat Medical (SANG ) rocketed 4-1/4 to 27 after announcing late on Monday the U.S. Food and Drug Administration approved Thymoglobulin as a treatment to prevent organ loss for kidney transplant recipients who experience acute rejection.
Brokerages took a bite out of other sector players. Amgen (AMGN ) fell 9/16 to 106-13/16 after Everen cut its rating on the industry leader to "market perform" from "market outperform."
And Centocor (CNTO ) slipped 1-5/16 to 41-5/16 after Morgan Stanley Dean Witter cut its rating to "outperform" from "strong buy."
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