CNNfn market movers
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April 29, 1999: 2:29 p.m. ET
Investors bank on strong economy to help lift financial services shares
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NEW YORK (CNNfn) - More evidence that the U.S. economy is running at a resilient pace and prospects for even lower official lending rates down the road were enough to prompt investors to lock their money into bank and financial services stocks Thursday after the U.S. government said labor costs rose at a slower-than-expected pace in the first three months of the year.
American Express (AXP) climbed 3-13/16 to 136-7/8 while Citigroup (C) rose 2-3/16 to 76-9/16. Morgan Stanley Dean Witter (MWD) gained 1-13/16 to 104-3/16 while J.P. Morgan (JPM) jumped 3-3/8 to 139-3/16.
Investors also took a shine to things all-natural and all-American Thursday -- good eating and good living -- as shares of food, health and homebuilding companies played their part in Wall Street's harrowing approach to the 11,000-mark.
Applebees International Inc. (APPB) shares rose 2-1/2 to 26-5/16, exceeding analysts' estimates by 2 cents. The Overland Park, Kan.-based restaurant chain reported earnings of 44 cents per share Wednesday, a 13 percent increase from the year-earlier period.
Wild Oats Markets Inc. (OATS) shares rose 9/16 to 28-1/4 after the company was reiterated a "buy" by analyst Bonnie K. Tonneson at Hambrecht & Quist. The broker's 12-month target price for the health food company is 34.
Drug and medicine maker Parexel (PRXL) was also a buzz for investors who more than approved of Covance Inc.'s $827 million purchase offer. The all-stock offer will make Covance (CVD) the biggest tester of experimental medicines for drugmakers in North America. Parexel shares jumped 2-11/16 to 22 while Covance dropped 7 to 20-1/2.
Some, though not all, things Internet-related got a boost on Thursday. Amazon.com Inc. (AMZN) took a dive, falling 19-11/16 to 173-13/16, after it said its first-quarter loss widened and that it will continue to lose money as it spends even more on promotions and new services.
The real thing
Realnetworks Inc. (RNWK), however, went the opposite way after Bid.com (BIDS) announced its first successful live bidding auction on the Internet, using RealNetworks technology.
RealNetworks, which supplies the technology and software used to access audio and video online, said it and several partners will make a "significant series" of announcements Monday. The company declined to detail what would be discussed. RealNetworks rose 18 to 202.
Also on the tech front, Priceline.com (PCLN) shares soared 6-7/16 to 127-7/16 after the Internet retailer said its travel services unit Wednesday recorded its first single day of million-dollar sales for leisure airline tickets. The company also sold a record 5,000-plus tickets in a single 24-hour period, or about one ticket every 17 seconds. Also, for the first time, Priceline.com's travel unit sold more than 25,000 airline tickets in a single seven-day period.
And Informatica Corp (INFA)., which sells software to bring together information stored in various company databases, jumped 60 percent in its first day of trading following an initial stock sale. Shares rose 9-7/8 to 25-7/8 on a volume of more than 400,000 shares after trading began at 10:30 a.m. E.T. Thursday.
Feeling Adventurous
Feeling adventurous, investors also rewarded a maker of radar systems Thursday. Advanced Technical Products Inc. (ATPX) jumped 2-3/4 to 12-3/4. The maker of housings that protect aircraft radar systems said it agreed to be acquired by an undisclosed buyer for $14 per share in cash plus up to a possible $3 more per share, contingent on its 1999 earnings.
Proxim Inc. jumped 2-1/4 to 34-5/8 after Intel Corp., the world's largest computer-chip maker, said it took a 2.9 percent stake in Proxim (PROX) and will work with it to develop wireless home-networking products. Intel (INTC) said it bought 320,000 shares of Mountain View, Calif.-based Proxim, valued at $10.4 million at Wednesday's closing price. It also has a warrant to buy an additional 96,000 shares.
And the media was definitely the message on Wall Street Thursday as shares of CBS and CMP Media took to the airwaves. CBS shares rose 1-5/16 to 46-5/16 after the broadcaster reported first-quarter earnings that beat analysts' estimates. CBS (CBS) said Thursday first-quarter profits jumped 32 percent on continued strength in its radio operations and a turnaround in its television business.
CMP Media Inc. (CMPX) also got a boost after United News & Media Plc (UNEWY) Britain's No. 4 media company, said it will buy CMP for $920 million in cash.
CMP, a trade show operator and publisher of magazines like InformationWeek, will augment United by giving it access to a bigger piece of the fast-growing U.S. technology publishing market. As part of the CMP acquisition, United News also said it will sell shares in an online unit by the end of the year.
United News will pay $39 a share for CMP, a 15 percent premium to CMP's closing price Wednesday. CMP shares rose 4-9/16 to 38-7/16, while United News' American depositary receipts rose 1-1/4 to 23-1/2.
Scientic-Atlanta (SFA) stock climbed 4-13/16 to 39-13/16 after it was raised to "buy" from "hold" by analyst James E. Jungjohann at CIBC Oppenheimer. SCI Systems Inc. (SCI) was reiterated "buy" by analyst Michael H. Zimm, also at CIBC Oppenheimer. SCI Systems designs and manufactures electronic products.
Online publishing wasn't the only thing catching investors' eyes Thursday. Shares of Readers Digest Association Inc. (RDA) rose 1-1/2 to 33-1/2 after the Pleasantville, N.Y.-based publishing firm Wednesday reported earnings per share 6 cents above expectations. The company's net income was up 77 percent over a year ago for its third quarter, which ended March 31.
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