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Tech gains ahead of Fed
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June 28, 1999: 4:28 p.m. ET
But interest-rate worries continue to keep investors on sidelines
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NEW YORK (CNNfn) - The Nasdaq pushed to a positive finish Monday despite weak initiative among investors wary of interest-rate hikes hurting technology companies' bottom lines.
The technology-stock-laden Nasdaq composite index gained 49.79, or 1.9 percent, to close at 2,602.44 Monday.
Technology issues traded on light volume again due to investor angst ahead of Tuesday's meeting of Federal Reserve officials to decide U.S. interest- rate policy.
Technology companies rely heavily on borrowing money in order to build on their current operations or expand into new ones, making them particularly sensitive to interest-rate fluctuations.
Therefore, investors chose to wait on the sidelines, according to Brian Finnerty, managing director at C.E. Unterberg, Towbin.
"There's no enthusiasm out there," said Finnerty. "A lot of people are waiting for the [Federal Open Market Committee] to meet. There's no big trend here."
Internet shares were, in general, weaker early on but rallied near the close of Monday trading. Among the more widely-held stocks, America Online (AOL) edged up 15/16 to 104-3/4 and Internet bookseller Amazon.com (AMZN) gained 1/2 to 110-11/16. Competitor barnesandnoble.com (BNBN) lost 9/16 to 18-3/8.
Among portal/search engine shares, Yahoo! (YHOO) leapt 9-5/8 higher while Excite@Home (ATHM) gained 1-1/4 to 52-3/4. Lycos (LCOS) was 11/16 higher at 92-1/2.
In the online broker area, E*trade (EGRP) said Monday that shareholders had approved doubling its common stock to 600 million shares from 300 million shares. The move is part of its preparation for a buyout of Telebanc, an online banking entity, announced earlier this month. E*trade rose 1-7/16 to 37-7/8. Ameritrade (AMTD) shed 2 to 83-1/2.
Elsewhere, online auctioneer ebay (EBAY) was up 4-1/16 to 140-1/16 and online advertising firm Doubleclick (DCLK) gained 3-3/16 to 79-1/8.
Shares of electronics-component maker Marshall Industries surged markedly higher after another component firm, Avnet, said it would acquire Marshall in a stock, cash and debt deal worth approximately $830 million.
Marshall (MI) stock rose more than 75 percent, up 15-11/16 to 35-13/16 after the deal was announced while Avnet shares went in the other direction, falling 2-5/8 to 45-3/16.
Elsewhere in the hardware sector, investors were lukewarm after PC firm Dell Computer (DELL) said it signed a three-year contract to supply personal and desktop computers to aircraft manufacturer Boeing (BA).
Boeing is one of Dell's biggest customers, and Dell's corporate business is the bread and butter of its overall revenue stream. Dell shares were just 1/8 higher to 37-1/16 at market's close Monday.
Mark Specker, personal computer analyst at Soundview Financial, said Dell hopes the Boeing deal will lure reluctant Dell investors back to the fold.
"Dell is working to reassure investors that things are on track," said Specker.
"The last two quarters, Dell's had less revenue growth than investors would have liked. I think they're certainly taking the opportunity to make sure this is a high-profile announcement and reassure investors that they can win those big deals as they historically have."
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