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Volatile mix on Wall St.
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August 31, 1999: 5:00 p.m. ET
Economic reports toss stocks in disarray; Dow down, Nasdaq up
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NEW YORK (CNNfn) - Wall Street tossed and turned Tuesday, pushed in opposite directions by contradictory economic reports that first triggered a wave of buying, then a midday sell-off, and finally a mixed ending for stocks.
The Dow Jones industrial average, which moved in and out of negative territory repeatedly during the trading session, lost 84.85 points to 10,829.28. On the New York Stock Exchange, market breadth was negative, with declines ahead of advances by 1,667 to 1,304 as 843 million shares traded.
The Nasdaq composite index rose 26.64 points, or almost one full percent, to 2,739.33 while the S&P 500 index shed 3.61 to 1,320.41.
Wall Street got spooked when the National Association of Purchasing Management index for August, originally due out Wednesday, was accidentally faxed to subscribers a day early. The index, a key measure of manufacturing activity, showed an increase to 54.2 in August from 53.4 in July.
The index's price component, a gauge of inflationary pressures, jumped 5.1 percentage points in August to 59.8, adding on to the markets' already heightened concern about a possible interest rate increase before the end of the year.
Earlier, stocks got a bout of strength from the release of the consumer confidence index for August, which registered its second straight monthly decline, but still came in above expectations. The Chicago Purchasing Management index also showed a decline in August. The index is considered an important precursor of the NAPM, but its positive effect on the market was erased by the early release of the stronger-than-expected national number.
The bond market also reversed its early gains, tumbling after the NAPM report's accidental release, then cutting down its losses at the end of the day. The bellwether 30-year Treasury bond fell 3/32 of a point in price, its yield ending the day unchanged from Monday's 6.06 percent.
The dollar fell against both the euro and the yen.
Volatile day for stocks
In the stock markets, investors quickly turned from selective buyers to almost indiscriminate sellers and back to bargain hunters again as the day's series of economic reports paraded.
Financial stocks were among the most volatile, taking a hit as the market's interest rate fears were resurrected. Among the Dow's financial components, American Express (AXP) shed 2-3/16 to 137-1/2 and J.P. Morgan (JPM) dropped 1-9/16 to 129-3/16.
But high-tech issues put on a brave face and managed to end the day with a substantial part of the sector posting gains.
Shares of Sun Microsystems (SUNW) rallied 3-7/8 to 79-1/2 after the company said it was buying Star Division Corp., a privately held maker of an office software suite that competes directly with Microsoft's Office product. Heating up the competition for office management software, Sun said it will distribute Star's suite free over the Internet.
Merrill Lynch added Sun Microsystems to its "focus one" list of recommended stocks.
Shares of Microsoft (MSFT) inched up 5/16 to 92-9/16.
In another deal involving two high-tech heavyweights, IBM (IBM) said it had signed a deal to supply Cisco Systems (CSCO) with $2 billion in computers, components and services over the next five years. Shares of IBM, a Dow component, rose 1-1/2 to 124-11/16, and the stock of Cisco Systems advanced 1-1/16 to 67-13/16.
Also in the news Tuesday, shares of office supply retailer Office Depot (ODP) inched up 1/8 to 10-5/8 after the company said late Monday its earnings in the second half of the year will fall well below expectations. The stock had fallen sharply in after-hours trading Monday.
Office Depot rival Staples (SPLS) shed 3/16 to 21-3/4 after PaineWebber downgraded both stocks in the morning.
Finally, airline stocks endured a down-day after Salomon Smith Barney lowered its earnings estimates for three of the sector's leaders -- Delta Air Lines (DAL), US Airways (U) and Southwest Airlines (LUV). Still, Salomon found gainers in the sector as well, raising its earnings projection for United Airlines parent UAL (UAL), and saying UAL, Northwest Airlines (NWAC) and America West (AWA) are likely to beat consensus projections for their third-quarter earnings.
The Dow transports index lost 44.05 points, or 1.4 percent, to 3,076.10.
(Click here for a look at today's CNNfn market movers.)
(Click here for a look at today's CNNfn technology stocks report.)
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