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E-tailers fuel Nasdaq
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November 26, 1999: 2:58 p.m. ET
Internet stocks pull Nasdaq to new record but broader market slips
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - U.S. stocks ended mixed Friday as strong gains in technology shares, particularly among Internet retailers, powered the Nasdaq to another record close in an abbreviated post-Thanksgiving trading session. However, U.S. blue chips and the broad-based S&P 500 suffered from a late selloff to end the day in negative territory.
The Nasdaq composite gained 27.31 points to 3,447.81, its 16th record close in 20 trading sessions. The Nasdaq climbed 2.3 percent this week, its gain for the year rising to 57.2 percent.
The Dow Jones industrial average slipped 19.26 points to 10,988.91. The blue chip index finished the week with a loss of 0.1 percent, cutting its gain for the year to 19.7 percent.
The S&P 500 index inched down 0.46 points to 1,416.62. The index finished the week with a loss of 0.4 percent, narrowing its gain for the year to 15.2 percent.
On the New York Stock Exchange, advances narrowly outnumbered declines 1,381 to 1,328 as trading volume reached a light 313 million shares.
Treasury prices fell, with the bellwether 30-year bond losing 9/32 of a point in price, raising its yield to 6.23 percent from 6.21 percent late Wednesday.
The dollar fell sharply against the yen and pushed the euro to a record low.
E-commerce bolsters techs
Internet retailers posted sharp gains in what is traditionally the biggest shopping day of the year-end holiday season, as investor enthusiasm for technology issues remained unabated.
"The story is technology and Internets. It's going to be an e-Christmas," said Ciaran O'Kelly, technology stock trader at Salomon Smith Barney.
The day's top gainers in e-commerce included Amazon.com (AMZN), jumping 5-7/8 to 93-1/8. Numerous analysts made positive comments Wednesday on the online retailer's stock.
Other winners were eToys (ETYS), gaining 2-1/4 to 66-5/8, and CDnow (CDNW), surging 1-3/4, or more than 11 percent, to 17.
Ashford.com (ASFD), a luxury products online retailer, soared 10-3/4, or more than 76 percent, to 24-7/8.
By contrast, traditional brick-and-mortar retailers -- the ones opening their doors for what they hope will be a massive wave of customers -- were little changed. Dow component Wal-Mart Stores (WMT), the nation's largest retailer, gained 1/8 to 58-1/16, Kmart (KM) was unchanged at 9-1/8 and Sears, Roebuck (S) added 3/8 31-1/16.
Elsewhere in technology, Microsoft (MSFT) -- another Dow component -- edged down 9/16 to 91-1/8 amid speculation the software giant is in talks with MediaOne Group (UMG) to buy a stake in Titus Communications, Japan's No. 2 cable television operator. But MediaOne, the nation's third-largest cable company, rose 2-15/16 to 80.
In addition, reports of a potential settlement in the government's antitrust case against the firm continued after the New York Times said Thursday the software company and government officials are being summoned to Chicago next Tuesday for the first round of settlement talks.
Shares of Microsoft rose earlier in the week after U.S. District Judge Thomas Penfield Jackson appointed Richard Posner, a federal appeals court judge, as mediator to handle "voluntary" negotiations between the two parties.
A near-term correction?
As the Nasdaq continued to post impressive gains, analysts remained bullish on the technology sector. O'Kelly expects to see good numbers in the fourth quarter of 1999 from technology in general, and Internet issues specifically.
Al Goldman, chief market strategist at AG Edwards and Sons, agreed. "We are in a market that is momentum driven with money chasing a few stocks, particularly Internets and high-techs," he said.
However, Goldman's near-term forecast was more bearish. He expects a "controlled correction" within the next couple of weeks in the Nasdaq.
Aside from technology, the telecom sector showed strength, extending Wednesday's gains.
Dow component AT&T (T) advanced 4-1/4 to 57-7/16 after reports said the nation's largest long-distance phone is considering an initial public offering as part of its plan to issue a tracking stock for its wireless telephone business. Estimates of the offering range between $8 billion to $10 billion, which could be the largest IPO offering to date in the U.S., the Wall Street Journal said Friday.
U.S. personal income surges
Investors seemed to shrug off the latest economic news, which showed personal income and spending continued to rise in October. The advance was partly discounted because of unusual factors.
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