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Nasdaq recovers
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December 9, 1999: 5:44 p.m. ET
Index manages a record despite volatile session; U.S. blue chips post solid gains
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - U.S. share prices advanced Thursday with the Nasdaq recovering amid extremely volatile trade to post another record.
Dow component IBM reiterated a profit warning for the fourth quarter of 1999 and the first quarter of 2000, weighing on the technology sector and the broader market. However, the blue chip index held in positive territory throughout the session.
"The market was getting a good bout of profit taking, which was long overdue. But buyers still seem to be there for the tech stocks,” said Michael Molnar, managing director of trading at Salomon Smith Barney.
The Dow Jones industrial average rose 66.67 points to 11,134.79. But breadth was negative on the New York Stock Exchange as declines outnumbered advances 1,868 to 1,218 on trading volume of 1.1 billion shares.
The Nasdaq composite advanced 8.09 points to 3,594.17, its 21st record close in 29 sessions with record volume of 1.8 billion shares. The S&P 500 index gained 4.23 points to 1,408.11.
Treasury prices rose, with the bellwether 30-year bond gaining 5/32 of a point in price, lowering its yield to 6.21 percent from 6.22 percent late Wednesday.
In the currency markets, the dollar fell against the yen and rose against the euro.
Nasdaq recovers
In wobbly trade, the Nasdaq recovered to end in positive territory and managed another record close. The index reached a high point of 3,647.55 in early trade but languished until late in the session.
Weighing on the broader market, sector leader International Business Machines (IBM) reiterated the profit warnings for the fourth quarter of 1999 and the first quarter of 2000 that the company originally made on Oct. 21. The stock fell 4-3/8 to 113-7/8.
In addition to IBM’s malaise, losses to computer hardware and system issues weighed on the Nasdaq.
Among industry leaders, Apple Computer (AAPL) slumped 4-13/16 to 105-1/4, Cisco Systems (CSCO) slid 1-5/16 to 98-5/8 and chip maker Intel (INTC) fell 1-1/4 to 73-1/4.
Another hardware leader fared better. Gateway (GTW) added 1-11/16 to 67-1/2 after its chief executive officer Ted Waitt stepped down. Waitt will be replaced by Gateway president Jeff Weitzen. The firm is the No. 2 direct marketer of personal computers in the U.S., behind rival Dell (DELL). Dell declined 3/4 to 42-3/4.
Linux issues upbeat
Red Hat (RHAT), a publisher of Linux operating system software, rose 15 to 286-1/4 following a deal to include Veritas Software's (VRTS) storage management program with its version of Linux. Veritas also did well, gaining 3-7/16 to 107-15/16.
Elsewhere in the Linux arena, shares of VA Linux Systems (LNUX) skyrocketed 220 points, or more than 733 percent, to 250 on their first day of trade. A leading provider of computer servers and workstations designed for the Linux operating system, the stock was priced at $30 per share and became the strongest initial public offering, surpassing theglobe.com (TGLO).
Gains to Internet stocks were led by Amazon.com (AMZN). The online retailer surged 15-1/16, or more than 17 percent, to 103-5/8 after J.P. Morgan initiated coverage of the stock with a "buy” rating and set a 12-month price target of $160.
Other Nasdaq positives included Lycos (LCOS), rising 8-3/8, or nearly 11 percent, to 85-9/16 amid reports the Internet portal will take public its European Internet joint venture with Bertelsmann -- the world's No. 3 media company -- as early as February.
Sharp gains to National Semiconductor (NSM) trimmed losses across the board. The wireless chipmaker’s stock jumped 5-1/16, or more than 11 percent, to 51 after posting stronger-than-expected earnings for its fiscal second quarter.
Aside from technology, Dow component Boeing (BA) bolstered the blue chips, gaining 9/16 to 37-13/16 amid reports the No. 1 aerospace company plans to launch more than 40 satellites for the European telecommunications system Skybridge. Investors shrugged off news that federal regulators ordered inspection of all Boeing 777-200 and 777-300 planes for certain safety requirements.
But some issues were in the red
On the skids was Tyco International (TYC), plunging 8-11/16, or nearly 24 percent, to 27-9/16 after the world’s largest electronics component maker said the U.S. Securities and Exchange Commission was conducting an informal inquiry relating to its accounting practices involving its many acquisitions.
Oilfield services company Baker Hughes (BHI) also suffered, retreating 3-1/4, or more than 14 percent, to 19-1/4 after saying late Wednesday it discovered accounting issues at its Inteq unit that could negatively impact financial statements. Following the announcement, a number of Wall Street brokerage houses downgraded the stock.
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