NEW YORK (CNNfn) - Investors took a back-to-basics approach to investing Monday, building their portfolios on the sturdy backs of banking and construction stocks and adding less-stable technology shares only as window dressing.
Investors turned strong earnings reports into the backbone of their foundation, including one from USG Corp. (USG), a Chicago-based building-material supplier that beat analysts' first-quarter projections.
The company's $1.71 per share profit boosted its stock by 3-15/16 to 62-1/16.
Strong earnings reports from Citigroup (C) and Bank America Corp. (BAC) were also sturdy enough to raise a cadre of financial stocks, including J.P. Morgan (JPM), which climbed 4-7/8 to 138.
Not to be shut out, Chicago chemical producer FMC Corp. (FMC) found the right earnings mix to entice investors, growing its stock 4-1/16 to 65-15/16 after beating Wall Street's estimate by 6 cents.
Even just the promise of good earnings were enough to raise Metris Co. (MTRS) a few levels. The company's stock jumped 4-1/2 to 58-1/2 after the company received a ratings upgrade from U.S. Bancorp, which predicted stronger than expected first-quarter profits.
With a solid earnings foundation in place, investors energized their portfolio with news that Columbia Energy Group (CG) had placed an unsolicited $7 billion bid to acquire Consolidated Natural Gas (CNG).
Consolidated rose 4-15/16 to 56-3/4 on the announcement, while Columbia fell 1-7/16 to 46-13/16, largely on concerns the firm was willing to assume about $2 billion in Consolidated debt -- a provision that immediately drew a concerned eye from credit rating companies Moody's and Fitch IBCA.
Meanwhile, Compusa Inc. (CPU), announced Monday it would lay off 200 employees to help streamline its CompUSA computer stores. That sent the company's stock climbing 1/4 to 6-1/4.
Knowing you can only do so much with bricks and mortar, investors also jumped at the chance to add some technological amenities.
A prime example was USABancshares (USAB), a Philadelphia-based bank that activated its Internet banking platform Monday, instantly electrifying its stock. Shares of the company were up 6 to 16-7/8 in early afternoon trading.
But Internet-related shares were clearly not the commodity of choice Monday, as several firms saw their value plummet, including the previously-popular Ameritrade (AMTD), down 25-1/2 to 100-1/2, and E*Trade Group (EGRP), down 14-1/16 to 78-1/2.
Amazon.com (AMZN) took perhaps the biggest hit of all, however, falling 25-1/4 to 164-1/4 after Morgan Stanley Dean Witter & Co. analyst Mary Meeker said Internet stocks may suffer a big correction this year.
Other stocks shorting-out Monday included Starter Corp. (STA), which fell 13/16 to 1-9/16 after failing to file its annual report with the Securities and Exchange Commission. The company, which blamed the delay on its inability to reach an agreement with its equity investors and current lenders.
Eli Lily & Co. (LLY) fell 8-15/16 to 73-3/8 despite matching Wall Street's first-quarter earnings expectations Monday, while Nextel Communications Inc. (NXTL) backpedaled 5/16 ahead to 37-11/16 after posting its first-ever positive cash flow.
Even Earthlink Network Inc. (ELNK) wasn't spared, falling 5-15/16 to 62-13/16 despite announcing a deal with Microwortz.com to offer a year of free access to their products on all Microwortz personal computers.
Finally, Recovery Network Inc. (RNET) fell 1/4 to 1-1/16 after a CBS Corp. division announced it was buying a 5 percent stake in the company, or 500,000 shares.