|
Wall St. sets quiet records
|
 |
April 9, 1999: 5:26 p.m. ET
S&P 500, Nasdaq manage to set records as profit taking knocks down Dow
|
NEW YORK (CNNfn) - A week marked by a profusion of market records, ended with just that on Wall Street -- more all-time highs for major stock market gauges.
Although profit taking prevented the Dow industrials from finishing the week at a new high, the Nasdaq Composite and the S&P 500 each advanced to levels never seen before.
The Dow Jones industrial average eased 23.86 points to close at 10,173.84. The blue- chip index advanced a strong 3.47 percent this week, increasing its gain for the year to 10.81 percent. Despite the Dow's losses, gainers held a lead of 1,697 to 1,275 over losers on the New York Stock Exchange, where 713 million shares changed hands.
The Nasdaq Composite, shook off an initial downturn to finish 19.66 higher at 2,593.05, ending the week with a record. The Nasdaq added 4.00 percent this week to increase its gain for the year to 18.26-percent.
The S&P 500 index joined the Nasdaq on the record trail, edging up 4.37 to 1,348.35. The broad blue-chip indicator rose 4.22 percent this week for a gain of 9.69 percent for the year.
Joseph Battipaglia, stock market strategist at Gruntal & Co., said small hiccups on the way up are normal in a bull market, but strong earnings and positive economic fundamentals should keep Wall Street moving higher and bring the Dow up to 11,000 by the end of the summer. (148K WAV) or (148K AIFF)
A lower-than-expected producer price index reading for March roused the bond market from its overnight lethargy, encouraging short-lived buying. However, the gains proved transitory, with late profit-taking knocking the bellwether 30-year bond down 5/32 of a point in price, for a yield of 5.45 percent.
The dollar, meanwhile, drifted lower within a limited trading range against the euro and the Japanese yen.
Airlines fly as oil sinks
Airline stocks, which had been left out of Thursday's rally, continued on their contrarian course by climbing on Wall Street Friday, giving buyers some encouragement while the rest of the market seemed content to take profits.
The Dow transportation index climbed 41.00 points, or 1.2 percent, to 3,370.40, boosted by such advances as Delta Air Lines (DAL), up 4-1/4 at 71-9/16, and United parent company UAL (UAL), up 1-7/8 at 78-15/16. American parent AMR (AMR) added 2-3/8 to 68-3/8.
Al Goldman, chief market strategist at A.G. Edwards, said the previously oversold transportation sector was celebrating strength in the U.S. economy and the possibility that a threatened rise in fuel prices might fizzle out.
According to the International Energy Agency, members of the Organization of Petroleum Exporting Countries (OPEC) have managed to trim production by only 79 percent of the target set late last month. Including increased production from Iraq, world oil output actually climbed in March, the agency said.
In particular, economists looked toward OPEC member Venezuela for cracks in the fragile oil pact that had aimed at boosting world crude prices off their recent lows by taking the edge off a global supply glut.
"The argument is that Venezuela is not willing or they're not going to be able to (comply with the cuts)," said Richard Yamarone, senior economist at Argus Research. "Here it is eight, nine days later and they're already backing out. We knew it wasn't going to last, but this is a little on the ridiculous side."
Quiet before the storm
Friday offered stock-market investors little if any earnings news during the trading session, as Wall Street braced for what promises to be a heavy dose of corporate performance reports next week.
But shortly after the closing bell, computer maker Compaq (CPQ) dropped a bombshell, warning its first-quarter earnings will not meet expectations and blaming weaker-than-anticipated demand for PCs. Compaq's shares gained 1-5/16 to 30-15/16 in regular trading before the announcement was made.
The news could shake down the entire technology sector Monday, but Friday there was little earnings anxiety on Wall Street. Instead, market players focused on news and speculation of several deals, as well as a few profit warnings that helped cool down buying sentiment on Wall Street.
Among the companies making news, software leader Microsoft (MSFT) eased 5/16 to 94-1/4 amid talk the company is interested in buying Internet calendar service Jump Networks. This follows a similar purchase just a week earlier by America Online (AOL), which bought When.com for an undisclosed sum.
Elsewhere in the high-tech sector, IBM (IBM) announced it would start selling its entire PC line through its Web site, putting itself in direct competition with experienced online computer sellers like Dell (DELL), Gateway (GTW), and more recently, Compaq (CPQ).
Investors were mixed on the news, pushing IBM shares slightly down to 186-5/16. The old kids on the Internet-sales block were mixed, with Dell down 1-7/16 at 43-9/16 and Gateway slipping 13/16 to 74-11/16.
Chemical manufacturer Union Carbide (UK) pulled the Dow lower, falling 3-5/16 to 48-1/16 after Morgan Stanley analyst Leslie Ravitz downgraded the stock to "neutral" from "outperform" based solely on valuation. Ravitz said the company is overpriced compared with its sector, but kept earnings forecasts unchanged.
Finally, the day's biggest losers included Biogen (BGEN), struck by profit taking in the wake of a run-up in its stock to record levels. The stock was pushed up by optimistic expectations for the company's first-quarter performance and strong sales of its multiple-sclerosis drug Avonex. Thursday, Biogen reported earnings of 58 cents a share, in line with consensus estimates and 61 percent above year-earlier results. Friday, shares of Biogen tumbled 5-9/16 to 114-7/16.
Hambrecht & Quist downgraded Biogen to "market perform" from "buy," citing the stock's valuation. BankBoston Robertson Stephens also cut its rating of the stock, to "long-term attractive" from "buy," arguing investors had expected a big positive surprise from the company, rather than results that simply met expectations.
The day's biggest gainers included theglobe.com (TGLO), soaring 19-15/16, or nearly 34 percent, to 78-15/16 after the provider of Web pages announced a 2-for-1 stock split.
(Click here for a look at today's list of CNNfn's market movers.)
(Click here for a look at today's CNNfn technology stocks report) 
-- by staff writers Malina Poshtova Zang and Robert Scott Martin
|
|
|
|
|
 |
|
