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CNNfn market movers
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January 12, 1999: 2:32 p.m. ET
Internet stumbles, but Disney, E*Trade, Connectinc provide rallying points
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NEW YORK (CNNfn) - A broadly lower U.S. stock market pushed shares of many companies into the red Tuesday, making it difficult for investors to find firm pockets of resistance in the general retreat.
Among the most prominent declines, Internet service provider America Online (AOL) led the market in selling volume, falling 11-1/8 to 154 as usually voracious Net traders recoiled from the sector.
AOL merger partner Netscape Communications (NSCP) fell 3-7/16 to 65-1/2 after Warburg Dillon Read analyst Michael Wallace cut the stock's rating to "hold" from "strong buy."
Only a handful of Internet companies saw gains, and the explosive advances recently associated with the sector were close to nonexistent.
Web artists K2 Design (KTWO) climbed 9/32 to 3-3/4 after being chosen by computer giant NCR (NCR) as its primary provider of Internet design and marketing.
Plans to create a strictly online investment bank boosted shares of Internet broker E*Trade (EGRP) 13-1/2 to 192.
Online phone guide Hello Direct (HELO) surged 5-3/8 to 15-3/4, rising on the strength of an overnight announcement of a merger with privately-held PhoneZone.com.
After unveiling the new GO Network with Disney (DIS), Web portal Infoseek (SEEK) should have been one of the day's bright spots, but instead Infoseek shares joined the general rout, falling 3-3/4 to 84.
On the other hand, Disney shares climbed 2 to 37-1/4 on the strength of the GO news and several analyst upgrades, making the undervalued Dow component one of the day's most prominent winners.
Pockets of resistance
Other winners were scattered and largely isolated from the broader market, as investors latched onto the most trivial-seeming shreds of corporate news.
Catalog retailer Lands' End (LE) found favor despite the overall selling mood, gaining 1-5/16 to 26-3/8 after announcing it will cut staff, close stores and refocus its efforts on its core catalog businesses.
Pharmaceutical giant Eli Lilly (LLY) took strength from an overnight announcement that its research toward preventing Alzheimer's disease had "achieved excellent progress." Lilly shares were up 3/4 at 76-15/16.
Medical insurer Centris Group (CGE) was one of the day's biggest gainers, up 2-5/8 at 13-5/8 after saying it will "consider" a $155 million buyout from insurance acquisitions specialist HCC Insurance Holdings (HCC).
Back in the ubiquitous computing sector, an online alliance with IBM (IBM) helped network provider Connectinc.com (CNKT) to Nasdaq-leading percentage gains.
Shares of Connectinc doubled in value, jumping 2-15/16 to 5-15/16 after the company unveiled its "MarketStream" line of e-commerce products, which will be fully integrated with IBM software.
Weak profits scented; Street spooked
However, noteworthy winners were few and far between, with several of the day's most noteworthy declines sparked by profit warnings.
Vail Resorts (MTN) stock took a spill after the company warned of sliding winter profits. Shares of Vail were down 5/8 at 20-5/8.
The Cheesecake Factory Inc. (CAKE) (CAKE) fell 6-29/32 to 22 after alerting Wall Street that fourth-quarter earnings will fall 30 percent under expectations.
Raymond James & Associates downgraded the stock to "neutral" from "accumulate," but Piper Jaffray analyst Allan Hickok remained firm with a "strong buy" rating, attributing the shortfall to simple "growing pains."
The world's largest computer chip distributor, Arrow Electronics (ARW), blamed lower Asian and Central European sales for anticipated weak profits in the fiscal third quarter. While First Call had forecast earnings of 42 cents per share, the company said it will only bring in 30 to 35 cents per share.
Arrow shares fell 2-7/8 to 18-7/16.
ESC Medical Systems Ltd. (ESCMF), which sells laser products for hair removal and other cosmetic medical use, also suffered after posting a fourth-quarter warning, with shares sliding 3 to 7.
Profit warnings also tripped chemical maker International Specialty Products (ISP), freight company Air Express International (AEIC) and SunTrust Bank (STI). ISP was down 2 at 11-1/2 while Air Express fell 2-7/8 to 18-7/8. SunTrust lost 2 to 76-15/16.
Even companies with satisfactory profits already on the books suffered, most notably Dow component Aluminum Co. of America (AA), which fell 2-7/16 to 85-3/4 despite reporting better-than-expected earnings Friday.
Morgan Stanley analyst R. Wayne Atwell downgraded his recommendation of Alcoa stock to "underperform" from "outperform," lowering his price estimate for the end of the year to $81. 
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