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Consolidation on Wall St.
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April 9, 1999: 1:47 p.m. ET
Blue chip stocks retreat and broader market stays range-bound after record
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NEW YORK (CNNfn) - Profit taking struck on Wall Street Friday, driving blue chips into the red and keeping the rest of the market close to unchanged levels as investors consolidated ahead of the weekend and following a record-setting day on Wall Street.
Shortly before 1:30 p.m. ET the Dow Jones industrial average was down 48.28 points at 10,149.42. Losers held a lead of 1,505 to 1,318 over gainers on the New York Stock Exchange, where 435 million shares changed hands.
The Nasdaq Composite, however, shook off an initial downturn to trade 5.97 higher at 2,579.36, moving deeper into unexplored record territory. The S&P 500 index eased 1.92 to 1,342.06. (Click here for a look at today's list of CNNfn's market movers.)
A lower-than-expected producer price index reading for March roused the bond market from its overnight lethargy, encouraging buying. The bellwether 30-year bond rose 7/32 of a point in price, for a yield of 5.43 percent.
The dollar, meanwhile, lingered within a limited trading range against the euro and the Japanese yen.
Airlines fly as oil sinks
Airline stocks, which had been left out of Thursday's rally, continued on their contrarian course by climbing on Wall Street Friday, giving buyers some encouragement while the rest of the market seemed content to take profits.
The Dow transportation index climbed 32.96 points, nearly 1 percent, to 3,362.36, boosted by such advances as Delta Air Lines (DAL), up 3-3/16 at 70-1/2, and United parent company UAL (UAL), up 3-1/4 at 80-5/16. American parent AMR (AMR) added 2-1/16 to 68-1/16.
Al Goldman, chief market strategist at A.G. Edwards, said the previously oversold transportation sector was celebrating strength in the U.S. economy and the possibility that a threatened rise in fuel prices might fizzle out.
According to the International Energy Agency, members of the Organization of Petroleum Exporting Countries (OPEC) have managed to trim production by only 79 percent of the target set late last month. Including increased production from Iraq, world oil output actually climbed in March, the agency said.
In particular, economists looked toward OPEC member Venezuela for cracks in the fragile oil pact that had aimed at boosting world crude prices off their recent lows by taking the edge off a global supply glut.
"The argument is that Venezuela is not willing or they're not going to be able to (comply with the cuts)," said Richard Yamarone, senior economist at Argus Research. "Here it is eight, nine days later and they're already backing out. We knew it wasn't going to last, but this is a little on the ridiculous side."
Amid the speculation, driller shares fell with oil's outlook. Dow member Chevron (CHV) slipped 15/16 to 92-13/16, while global oil giant Elf Aquitaine (ELF) eased 1-7/16 to 66-9/16.
Quiet before the storm
Friday offered stock-market investors little if any earnings news, as Wall Street braced for what promises to be a heavy dose of corporate performance reports next week.
Instead, market players focused on news and speculation of several deals, as well as a few profit warnings that helped cool down buying sentiment on Wall Street.
Among the companies making news, software leader Microsoft (MSFT) eased 9/16 to 94 amid talk the company is interested in buying Internet calendar service Jump Networks. This follows a similar purchase just a week earlier by America Online (AOL), which bought When.com for an undisclosed sum.
Elsewhere in the high-tech sector, IBM (IBM) announced it would start selling its entire PC line through its Web site, putting itself in direct competition with experienced online computer sellers like Dell (DELL), Gateway (GTW), and more recently, Compaq (CPQ). Although the news sent IBM's shares down 15/16 to 186-1/16, the old kids on the Internet-sales block were in similar straits, with Dell down 1-1/4 at 43-3/4 and Gateway slipping 1/4 to 74-1/4.
Chemical manufacturer Union Carbide (UK) pulled the Dow lower, falling 1-1/16 to 49-11/16 after Morgan Stanley analyst Leslie Ravitz downgraded the stock to "neutral" from "outperform" based solely on valuation. Ravitz said the company is overpriced compared with its sector, but kept earnings forecasts unchanged.
Finally, the day's biggest losers included Biogen (BGEN), struck by profit taking in the wake of a run-up in its stock to record levels. The stock was pushed up by optimistic expectations for the company's first-quarter performance and strong sales of its multiple-sclerosis drug Avonex. Thursday, Biogen reported earnings of 58 cents a share, in line with consensus estimates and 61 percent above year-earlier results. Friday, shares of Biogen tumbled 5-3/4 to 114-1/4.
Hambrecht & Quist downgraded Biogen to "market perform" from "buy," citing the stock's valuation. BankBoston Robertson Stephens also cut its rating of the stock, to "long-term attractive" from "buy," arguing investors had expected a big positive surprise from the company, rather than results that simply met expectations.
The day's biggest gainers included theglobe.com (TGLO), soaring 20-1/4, or more than 34 percent, to 80-5/16 after the provider of Web pages announced a 2-for-1 stock split. 
-- by staff writers Malina Poshtova Zang and Robert Scott Martin
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