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CNNfn market movers
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January 15, 1999: 2:27 p.m. ET
Heinz, airlines bulk up on upgrades, but profit warning hits Rambus hard
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NEW YORK (CNNfn) - From food companies to Internet upstarts, stocks in all sectors took advantage of Wall Street's renewed high spirits to post strong gains.
Several major food manufacturers reaped the rewards of analyst upgrades, with Prudential Securities raising its recommendations on Heinz and Sara Lee to "accumulate" from "hold."
Heinz (HNZ) shares climbed 13/16 to 54-1/16 and Sara Lee (SLE) gained 15/16 to 27-5/16, extending the rally that has pushed the company's shares up from 25-1/2 last Friday.
Goldman Sachs upgraded cereal giant General Mills (GIS) to "recommend" from "market perform," pushing shares up 9/16 to 82-3/8.
Airline stocks also flourished after "the combination of stronger economic growth and the prospect of a fare increase" led Merrill Lynch analyst Canadace Browning to up her ratings on several large and small air companies.
Delta (DAL) gained 1-3/8 to 56 on the strength of Browning's comments, while Continental (CAI.B) also climbed 1-3/8 to trade at 35-1/16.
Among other airlines singled out by Browning, Mesa Air (MESA) surged 11/32 to 8-19/32 and Alaska Air (ALK) lifted 1-7/8 to 48-7/8.
Medical researcher Cytel (CYTL) retreated after opening stronger, caught between investors still flocking to Thursday's news that the company's HIV vaccine had produced promising effects and traders looking to take profits.
After leaping 5-3/4 to 7-3/4 in late Thursday trading, Cytel shares were down 1-13/16 at 5-9/16 by late Friday afternoon.
Pharmaceutical firm Warner-Lambert (WLA) also suffered, falling 1-1/8 to 70 after the role of its Rezulin diabetes pill in 33 deaths came under federal scrutiny.
Rival drug maker Pharmacia & Upjohn (PNU) surfed the rally more nimbly, up 3/16 at 55-5/16. Volume was extraordinarily heavy, with nearly 10 million shares traded by early afternoon after the Swedish government put 31 million shares up for sale at $55 apiece.
Swedish industrial minister Bjorn Rosengren said the government was taking advantage of strong demand for P&U and near-record high price levels to free up funds tied up in the company.
Readers Digest (RDA) shares surged 2-11/16 to 28-3/4, nearing a 52-week high after several media reports that the venerable publisher is talking with Time Warner (TWX), parent company of CNNfn and CNNfn.com, about forming a direct marketing alliance.
Needless to say, American depositary receipts (ADRs) of Brazilian companies were almost all sharply higher, ballooning in price in sympathy with a 28-percent surge on the Sao Paulo stock market.
Brazilian companies - mostly spin-offs from telephone giant Telebras - accounted for 11 of the 15 biggest percentage gainers on the New York Stock Exchange by early afternoon.
Telebras (TBH) itself climbed 11-7/8 to 66 on especially high volume.
Uneasy gains for Internets
Internet companies returned to their now-habitual winning streak, but there were some noteworthy exceptions, particularly among well-established sector benchmarks.
Amazon.com (AMZN) was up 2-1/16 at 140-5/16, America Online (AOL) added 2 to 146-1/2 and Lycos (LCOS) advanced a slim 3/16 to 85-15/16.
Yahoo! (YHOO), however, continued its recent uncertain trend, sliding 26-11/16 to 317-1/4. DoubleClick (DCLK) fell 8 to 76-1/2 and Geocities (GCTY) lost 3-7/8 to 58.
Shares of Inktomi (INKT), which makes the search engine software powering Internet portals like Yahoo! and Lycos, dropped 10-1/4 to 148-1/4 despite a smaller-than-expected quarterly loss.
Portal upstart Xoom.com (XMCM) enjoyed a much cheerier session, as the company's stock surged 8-15/16 to 56-7/8 on the strength of a Web content-sharing alliance with Infospace.com (INSP) and other established Internet sites.
Marketwatch.com (MKTW) didn't disappoint traders accustomed to Internet stocks soaring in their first day of trading. Shares of the IPO climbed 85 to 102 from their opening price of $17, but well off a high of 200 set in afternoon trading.
The company, a joint venture between Data Broadcasting (DBCC) and CBS (CBS), operates the CBS Marketwatch Web site.
However, Data Broadcasting, now bereft of its Internet child, slid 6-13/16 to 24-1/4.
Perhaps heartened by the Marketwatch opening, General Electric entered the financial Web site game, buying 9.9 percent of online investment center Telescan.
General Electric (GE) shares gained 2-7/8 to 99-15/16, while Telescan (TSCN) edged 7/8 higher to 16-7/8.
Profit warnings fall like rain
Chief among the day's gloomy spots were companies warning Wall Street that upcoming earnings announcements will fall short of expectations.
Automation supplier DT Industries (DTII) shed 2-7/8 to 15-3/4 after saying profit for its fiscal second quarter will be only 10 to 12 cents per share, far below 41-cent estimates.
Medical manufacturer Luna Corp. (LUNR) and helicopter carrier Offshore Logistics (OLOG) also joined the growing crowd of corporate naysayers.
Luna shares fell 1 to 9-3/8 after blaming its profit warning on weak sales, while Offshore Logistics slid 13/16 to 11-5/16 for much the same reason.
Chip accelerator Rambus (RMBS) plunged 12 to 86 after investors chose to ignore estimate-beating profits, focusing instead on a grim forecast of sliding profits ahead
Platinum Technology (PLAT) was the morning's biggest disappointment, however, with shares tumbling 5-13/32 to 13-9/32. The company now expects fourth-quarter earnings to weigh in at 40 cents per share, under 53-cent forecasts.
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