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Earnings, deals help techs
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February 16, 2000: 7:51 p.m. ET
CheckFree soars on merger news, semiconductors mixed
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NEW YORK (CNNfn) - Strong earnings news and several high-profile deals helped buoy the technology sector Wednesday, as investors awaited the release of January's producer price index data and Congressional testimony from Federal Reserve Chairman Alan Greenspan, both of which are on tap for Thursday.
The tech-rich Nasdaq composite index ended the session 6.88 higher at 4,427.65, a 0.16 percent advance on the day. Meanwhile, the Dow Jones industrial average fell 156.68, or 1.5 percent, to 10,561.41, and the S&P 500 slid 14.38 to 1,387.67, a 1 percent decline on the day.
Among Wednesday's biggest Nasdaq gainers was electronic-payment and billing provider CheckFree Holdings (CKFR: Research, Estimates), which surged more than 46 percent on news that it will enter into a $1.2 billion merger with rival TransPoint.
Other high-tech outfits that posted sharp gains Wednesday included earnings winners Lycos (LCOS: Research, Estimates) and Applied Materials (AMAT: Research, Estimates), as well as Akamai (AKAM: Research, Estimates), which announced a deal with America Online (AOL: Research, Estimates).
The Checkfree-TransPoint merger, announced late Tuesday, sent Checkfree (CKFR: Research, Estimates) shares up 32 to 100-1/4. TransPoint is a joint venture between First Data Corp. (FDC: Research, Estimates), Microsoft Corp (MSFT: Research, Estimates) and Citigroup (C: Research, Estimates).
Under the terms of the deal, those three companies will hold a 23 percent stake in CheckFree after the merger, and Microsoft has agreed to pay CheckFree $120 million over the next five years in return for bill-paying services on its Web sites.
Shares of Microsoft, which is poised to release its Windows 2000 operating system on Thursday, lost 15/16 to 97-5/8, a drop of nearly 1 percent on the day. First Data shares edged up 3/8 to 48-5/8.
Applied Materials up on 1Q news
Applied Materials (AMAT: Research, Estimates), the largest supplier of equipment used to manufacture semiconductors, added 6-7/8, or 4 percent, to close at 173-3/8 after reporting better-than-expected first-quarter financial results.
On Tuesday, Applied Materials posted operating earnings of $328 million, or 80 cents per diluted share, compared with analysts' expectations of 77 cents per share. The company also announced plans for a 2-for-1 stock split.
Executives at Applied Materials also gave a bullish forecast for the current quarter, anticipating revenue of as much as $2.1 billion and earnings of $1.08 per share.
John Morgan, Applied Materials' chairman and chief executive, told CNNfn on Wednesday that the company used the slowdown in chip manufacturing last year to build up the capacity needed to accelerate revenue growth moving ahead. [319K WAV or 319K AIFF]
Several analysts chimed in on Wednesday as well. ABN AMRO reiterated its "buy" rating on the company and raised its 12-month price target to $250 from $160. Prudential analyst John Pitzer boosted his rating on the company to "strong buy" from "hold."
Other semiconductor manufacturing equipment makers headed higher Wednesday as well.
Photronics (PLAB: Research, Estimates) shares added 5-1/2 to 38-11/16, a rise of more than 16 percent on the day. Shares of Novellus (NVLS: Research, Estimates) ticked down 1/4, ending the session at 54-13/16. Asyst Technologies (ASYT: Research, Estimates) fell 9/16 to 42-9/16. Semitool (SMTL: Research, Estimates) shares advanced 3/8 to 38-1/8. And Cymer (CYMI: Research, Estimates) added 3-9/16 to 59-15/16.
Meanwhile, shares of semiconductor manufacturers posted mixed results.
PC Microprocessor giant Intel (INTC: Research, Estimates) slipped 4-13/16, or 4.3 percent, to 107-3/16. Intel rival Advanced Micro Devices (AMD: Research, Estimates) added 1/4 to 43-3/4, a 0.6 percent rise on the day.
Analog Devices (ADI: Research, Estimates) shares advanced 7-1/8, or 6 percent, to 127. The company on Wednesday reported fiscal first-quarter earnings of 50 cents per share, beating analysts' expectations by a nickel on sales that rose 63 percent, to $490 million. Looking ahead to the second quarter, executives forecast earnings 55 cents to 57 cents per share, and revenue of $535 million to $545 million
Maxim (MXIM: Research, Estimates) slipped 3-13/16 to 54-3/8, a 6.6 percent decline on the day. Linear Technology (LLTC: Research, Estimates) shares fell 3-1/4, or 3 percent, to 101-3/4. LSI Logic (LSI: Research, Estimates) jumped up 7-3/8, ending the session 8 percent higher at 103-7/8.
The Philadelphia Stock Exchange's semiconductor index edged down 0.31 to end the session 0.03 percent lower at 953.32.
Computer-equipment makers mixed ahead of H-P earnings
Shares of Hewlett-Packard (HWP: Research, Estimates) added 4-5/8 to 129-3/8, a 3.7 percent rise on the day. That advance came ahead of the company's fiscal first-quarter earnings report, which was scheduled for release after Wednesday's closing bell. Earnings were 80 cents a share before one time items, beating Wall Street analysts' composite projection of 78 cents per share.
Meanwhile, most other computer equipment makers headed south.
IBM (IBM: Research, Estimates) edged down 1-3/8 to 115-3/4, a 1.17 percent slide on the day. Compaq (CPQ: Research, Estimates) shares slid 1-5/8, or 6 percent, to 25-3/8. Gateway (GTW: Research, Estimates) shares fell 1-1/2 to 55-1/2, a 2.63 percent decline on the day. Apple (AAPL: Research, Estimates) slipped 4-7/8, or 4.1 percent, to 114-1/8. Micron Electronics (MUEI: Research, Estimates) shares edged down 1/2 to 12, a 4 percent decline on the day.
Heading higher were Dell (DELL: Research, Estimates), up 1/8, or 0.33 percent, at 38; and Unisys (UIS: Research, Estimates), which added 4 to 34-1/4, a 13.2 percent rise on the day.
Shares of computer networking-equipment giant Cisco Systems (CSCO: Research, Estimates), which it signed a deal to acquire privately-held Growth Networks for roughly $355 million in stock, barely retreated on Wednesday, ticking down 53/64 to 127-11/64, a 0.65 percent rise on the day. Meanwhile, Cisco competitor Lucent Technologies (LU: Research, Estimates) fell 1-7/16 to 52, and Nortel Networks (NT: Research, Estimates) rose 3-11/16 to 124-3/16.
Net stocks on the rise
Dot.coms headed mostly higher as well on Wednesday.
Online software vendor Beyond.com (BYND: Research, Estimates) posted some of the strongest gains, adding 29/32, or 16.9 percent, to 6-9/32. The company on Tuesday signed an agreement with CADopia.com to build and manage its e-commerce Web store, through which it will sell its computer-aided design software.
Shares of Internet media company CNET (CNET: Research, Estimates) also advanced sharply, adding 7-57/64, or 14.9 percent, to 61.
Web portal Lycos (LCOS: Research, Estimates) ran up 5.2 percent, or 3-9/16 to 72-5/8, after it beat analyst estimates for its second quarter. The company on Tuesday reported operating earnings of $3 million, or 3 cents per share, beating analysts' penny-per-share forecast. Revenue rose 120 percent from the year-earlier quarter to $68.6 million.
The most recent results marked Lycos' fourth consecutive quarter of profitability, which the company's chief executive Bob Davis said is in line with its overall strategy. [134K WAV or 134K AIFF]
Davis also said that the company is on track for another profitable quarter, noting that he is "comfortable" with analysts' estimates. Analysts polled by First Call are expecting Lycos to earn 3 cents per share during the current quarter.
Shares of Akamai (AKAM: Research, Estimates) also charged ahead Wednesday, adding 23-5/8, or 11 percent, to 22-1/2. The company, which provides services aimed at improving the speed and reliability of Web sites, on Wednesday unveiled a deal with AOL under which AOL will use Akamai's services across its network. Meanwhile, AOL fell 2-1/4, or 4.2 percent to 51-3/4. 
-- from staff and wire reports
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