Wall Street in reverse
|
|
May 5, 1999: 11:40 a.m. ET
Investors still consolidating after Dow 11K, leaving stocks on the run
|
NEW YORK (CNNfn) - Profit taking and a nervous bond market kept U.S. blue chips on the run Wednesday, driving the Dow deeper into retreat from the 11,000 peak touched Monday, while a raft of discouraging corporate news sabotaged technology stocks.
Shortly before 11:30 a.m., the Dow Jones industrial average retraced its steps, slipping 85.05 points to 10,801.06. Losers took the lead from gainers 1,532 to 1,1183 as 302 million shares traded on the New York Stock Exchange.
The Nasdaq Composite plunged 48.67 points, or nearly 2 percent, to 2,436.45 and the S&P 500 index eased 11.83 to 1,320.17. (Click here for a look at today's list of CNNfn's market movers.)
The bond market thrashed about, vacillating as investors searched for direction after Tuesday's steep sell-off. Buying sentiment firmed briefly after the Treasury Department announced the terms of its quarterly refunding auction, but stronger-than-expected factory orders data soon knocked bonds back into negative territory. The benchmark 30-year Treasury bond slipped 5/32 of a point in price for a yield of 5.72 percent.
The dollar bounced back against the yen after opening lower, but remained helpless against a resurgent euro.
Finance fights, transports retreat
In the stock market, shares of banks and other interest-rate sensitive companies struggled to withstand bonds' nervous oscillation, particularly as the long bond's yield lurched closer to the psychologically-important level of 5.75 percent.
Dow investment banker J.P. Morgan (JPM) anchored the sector's resistance, with shares climbing 1-11/16 to 135-3/16, but the other Dow financial firms found the going difficult. Citigroup (C) slipped 1 to 71-1/4, while American Express (AXP) gave up 1/4 to 126-7/8.
The transportation sector harbored no such ambivalence, retreating as investors cashed out after two days of record-breaking rallies. The Dow transports shed 48 points, nearly 1.3 percent, to 3,683.88, led downward by the freight stocks. Federal Express parent FDX (FDX) fell 3-5/8 to 109-1/4, USFreightways (USFC) tumbled 1-1/2 to 36 and Airborne Freight (ABF) lost 13/16 to 31-9/16.
Deal of the day
Investors found more bullish inspiration in news that telephony giant AT&T (T) and cable provider Comcast (CMCSK) had agreed to divide mutual takeover target MediaOne (UMG) between them, avoiding a potentially costly bidding war.
Shares of AT&T, a Dow component, rose 3-13/16 to 55-3/8. Comcast gained 4-9/16 to 71-1/4, while MediaOne lost 3/4 to 76-7/8.
Under the terms of the agreement, Comcast will not bid for MediaOne in exchange for a $1.5 billion kill fee and 2 million cable subscribers from MediaOne, AT&T and recent AT&T acquisition Lenfest Communications. The arrangement allows AT&T's $58 billion buyout of MediaOne to go ahead.
Networking stocks punished
Elsewhere in the market, shares of networking equipment companies suffered amid concerns about earnings in the sector as well as potential antitrust problems for Network Solutions (NSOL).
Shares of Network Solutions fell 8-7/8, or nearly 13 percent, to 60-5/8 following the revelation that the company, which until recently had an exclusive contract to distribute Internet domain names, is the subject of a Justice Department antitrust probe.
Meanwhile, Canadian Newbridge Networks (NN) tumbled 8-3/4, or nearly 24 percent, to 28-1/16 after the company warned late Tuesday that its fourth-quarter earnings would fall significantly short of expectations.
Similar problems plagued the stock of Autodesk (ADSK), which plunged 5-11/16, or nearly 20 percent, to 22-13/16 after the software maker warned its first-quarter results will come in below expectations.
Among other technology players, shares of networking superstar Cisco (CSCO) fell 2-11/16 to 105-15/16. Dow computer maker IBM (IBM) lost 2-1/4 to 209-3/4, while rival Dell (DELL) retreated 1-9/16 to 39-1/4 and Gateway (GTW) lost 15/16 to 65-1/16.
-- by staff writer Malina Poshtova Zang with Robert Scott Martin
|
|
|
|
|
|