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Dow sets lonely record
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April 13, 1999: 5:09 p.m. ET
Blue chips reach new high even as broader market gets an earnings shake-up
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NEW YORK (CNNfn) - U.S. blue chips sailed straight into their second record for the week Tuesday, ignoring nervousness in the broader market caused by concerns about first-quarter corporate earnings growth.
Jitters, caused by anxiety ahead of one of the high-tech industry leaders' latest quarterly report, sapped the strength out of the Nasdaq and sent the Dow briefly seesawing in and out of positive territory in the early afternoon.
Intel, the world's largest computer-chip maker, reported its quarterly results after the closing bell. Although the company had issued no profit warnings and the actual earnings came in above consensus estimates, the market showed signs of anxiety after another technology bellwether, PC maker Compaq, late Friday said its profit would fall more than 50 percent below expectations.
The Dow Jones industrial average climbed 55.50 points to close at an all-time high of 10,395.01. Market breadth on the New York Stock Exchange was positive but narrow, with gainers beating losers 1,540 to 1,484 as trading volume reached 815 million shares.
The Nasdaq Composite, the index that hosts the majority of high-tech players, fell 15.34 to 2,583.47. The S&P 500 index shed 8.81 to 1,349.82.
Profit taking in the wake of Monday's record-breaking rally and weakness in bonds added to the stock market's mixed performance. Despite the earnings uneasiness on Wall Street, Mark Greenberg, portfolio manager at Avatar Associates, said low interest rates, and not profits, are likely to prove a strong catalyst for the bull market. (323K WAV) or (323K AIFF)
The bond market gained little support from news that consumer inflation remains benign, instead focusing on a heavy load of corporate debt offerings on the horizon. News that Serbian troops briefly crossed the Albanian border gave short-term Treasury debt a short-lived boost, but the bellwether 30-year Treasury bond still sank 23/32 of a point in price, raising the yield to 5.49 percent.
The dollar gained ground against the euro as the conflict over Kosovo escalated, but slipped back against the yen.
Bullish news for broker stocks
Financial-services stocks, which led Wall Street into its record-breaking rally Monday, once again climbed higher as earnings news from the industry continued to reveal strong growth and beat expectations.
Broker PaineWebber (PWJ) led the newsmakers Tuesday, reporting the best quarter in its 119-year history. Against forecasts for earnings of 73 cents a share, PaineWebber reported a profit of $1.01 a share. The stock jumped 3-11/16 to 47-1/4.
PaineWebber's news follows similarly strong earnings reports by Morgan Stanley Dean Witter (MWD) and Bear Stearns (BSC), and was followed by Wall Street's biggest brokerage, Merrill Lynch (MER), which shortly before the market opened reported first-quarter earnings of $1.44 a share, beating forecasts for $1.23 a share. Merrill's stock fell 2-9/16 to 97-3/8, succumbing to profit taking after Monday's strong advance.
Meanwhile, discount broker Charles Schwab (SCH), which Monday failed to join the financial rally, caught up with the crowd a day later, soaring 15-3/8, or more than 11 percent, to 150-3/8. The company reports its earnings Wednesday. In a possible sign of good health, Schwab placed a full-page advertisement in the Wall Street Journal Tuesday, seeking to hire 1,000 financial professionals.
Internet brokers were not left out of the buying avalanche, with Ameritrade (AMTD) soaring 31, nearly 22 percent, to 173-1/4, while E*Trade (EGRP) leapt 29-1/2, or almost 31 percent, to 125-1/2.
Banks help the Dow
Banking shares also got a boost, rising amid the general ebullience in the finance sector and some strong corporate earnings of their own.
SunTrust Banks (STI) reported Tuesday morning that, excluding charges relating to its merger with Crestar Financial, first-quarter profits came in at 91 cents per share, exactly what analysts had been looking for. Shares in the company jumped 1-3/4 to 71-3/8.
Other big banks also received buying attention from investors. On the Dow, Citigroup (C) climbed 1-1/4 to 75-1/4 and American Express (AXP) added 3-1/8 to 138-1/2.
Elsewhere in the Dow 30, forestry blue-chip International Paper (IP) climbed 2-1/4 to 48-5/8 after of its own profit report beat expectations, even though it showed a 70 percent decline in earnings from a year earlier. Paper rival Weyerhaeuser (WY) got a boost from its own forecast-topping profit of 51 cents per share, which helped lift the stock 2-5/16 to 64-7/16.
Earnings cast shadow on techs
Technology stocks cut short an early rally as earnings jitters continued to linger in the sector following Monday's bruising caused by a profit warning from Compaq (CPQ). Tuesday, the concerns were caused by Intel, whose results came out after the market closed.
Shares of Intel (INTC) eased 3/4 to 60-1/2 in regular trading as investors opted for caution in case of an earnings surprise. But the surprise came on the upside, as Intel reported profit of 57 cents a share, beating official estimates for 55 cents a share. Unofficial estimates had run as high as 58 cents a share. Mixing the sweet with the sour, Intel said revenue growth in the second quarter is likely to slow down. The stock eased further to 60 in after-hours trading.
Compaq, meanwhile, edged down 3/16 to 23-7/8, on top of the previous day's heavy losses.
News of deals and projects in the works helped lift many of the high-tech leaders higher.
Among the leading newsmakers, shares of GeoTel (GEOC), a maker of telecommunications software for routing calls, surged 11-11/16 to 55-15/16, a gain of more than 26 percent, after leading networking equipment maker Cisco Systems (CSCO) said it is buying the company for $2 billion in stock. Cisco's shares fell 3-5/8 to 114-1/8.
On the Dow, shares of IBM (IBM) lost 3-7/16 to 180 even after news Big Blue is expanding its Internet service providing business.
But fellow Dow computer maker Hewlett Packard (HWP) advanced 2-7/16 to 70-13/16 after the company repeated Tuesday it expects double-digit revenue growth this year and sees a recovery in Asian business growth. After the market closed, HP issued a correction to its statement saying it expects double-digit growth in PC shipments rather than revenue.
Also among the gainers, shares of troubled database software maker Informix (IFMX) surged 1-21/32 or nearly 24 percent, to 8-21/32 as the company prepared to announce a fixed-price software package for building e-commerce Web sites.
Finally, shares of Dow member Coca-Cola (KO) climbed 1-3/8 to 63-1/4 after the world's largest soft-drink maker got a rating boost from Merrill Lynch. Merrill analyst Dan Lane raised his intermediate term recommendation on the stock to "accumulate" from "neutral," saying that the company has already seen the worst from rocky economic conditions overseas.
(Click here for a look at today's CNNfn market movers.)
(Click here for a look at today's CNNfn technology stocks report) 
-- by staff writer Malina Poshtova Zang with Robert Scott Martin
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