Blue Chips Give Back Gains
U.S. stocks faded late Wednesday as benign comments from Alan Greenspan and a thick stack of shiny earnings reports weren't enough to keep sellers at bay.
The Dow Jones Industrial Average closed down 19.31 points, or 0.2 percent, to 9,335.91 after being up as much as 124.87 points.
Federal Reserve Chairman Greenspan, speaking to the House Ways and Means Committee, said financial markets "remain fragile" but have "stabilized significantly" since last fall. He also cautioned that the recent level of corporate profits might mean that the rise in U.S. stocks "will have difficulty in being sustained."
Yet Greenspan made it clear that Fed policy does not try to guide stock prices but is aimed at influencing U.S. economic growth.
Investors took Greenspan's remarks to mean the Fed is maintaining its wait-and-see approach to the idea of further interest-rate cuts.
Technology companies continued to tack up gleaming earnings reports. Microsoft (MSFT) demolished Wall Street estimates by recording 73 cents a share in fiscal second-quarter earnings, 14 cents above estimates of analysts surveyed by First Call. The stock advanced 6 7/8 to 162 1/2 and rose as much as 12 1/8 points.
Microsoft's earnings report initially spurred another round of mark-ups in bellwether computer-related issues, sending the Nasdaq composite to set a new record-high for the second day in a row.
International Business Machines lifted 2 to 194 1/4 ahead of its Thursday release of earnings. Hewlett-Packard put on 2 7/16 to 71 15/16, Dell Computer 3 3/16 to 85 5/16, and 3Com 2 1/4 to 48. But EMC retreated 1 5/8 to 100 1/2 and Intel sank 1 1/8 to 138 1/4 after being up as much as 4 5/16 points earlier.
Of note was the pick-up in liquidation of Internet-related shares during the final 75 minutes of trading. Amazon.com (AMZN) sagged 28 7/8 to 110 7/8. CIBC Oppenheimer analyst Henry Blodget, who came out with a $400-a-share price target in December, declined to come out with a revised price objective in a research report. Blodget set his price target before the stock split three-for-one.
DoubleClick (DCLK) gave back nearly a 25-point gain to close off 3/16 to 87 3/4. The provider of Internet advertising solutions reported a loss of 25 cents a share in the fourth quarter, a penny better than a First Call survey of analysts had called for.
In other cyber issues, Yahoo! lost 31 to 293, Excite sagged 13 3/8 to 96 5/8, Infoseek wilted 10 1/2 to 66 9/16, GeoCities gave up 10 to 65, eBay depreciated 16 1/8 to 213 3/4, and uBid was marked down 8 3/16 to 73 13/16.
Meanwhile, a series of robust profits readings boosted the semiconductor group. Texas Instruments (TXN) picked up 6 5/8 to 99 5/8. Fourth-quarter operating net amounted to 59 cents a share, a nickel richer than most analysts, according to First Call.
Xilinx (XLNX) forged ahead 7 1/8 to 82 1/8. The maker of programmable logic chips realized 46 cents a share of operating profit i its fiscal third quarter, 6 cents more than the consensus analyst forecast, according to First Call. Separately, the company's board okayed a two-for-one stock split. Prudential Securities raised its opinion of the shares to "strong buy"" from "accumulate."
Semiconductor equipment manufacturer Teradyne (TER) netted 14 cents a share in the fourth quarter, 2 cents richer than the average analyst estimate according to a survey by First Call. Teradyne rang up a profit of 54 cents in the same quarter of 1997. The stock advanced 6 1/8 to 62 1/8.
Sanmina (SANM) dropped inched ahead 3/16 to 71 15/16. The semiconductor manufacturer reported first-quarter operating earnings 45 cents a share, a penny more than the First Call consensus estimate.
Elsewhere in technology, disk drive stocks, one of the hottest market segments of late, traded mixed. Disk-drive maker Western Digital (WDC) announced a fiscal second-quarter loss of 93 cents a share. A survey of analysts by First Call indicated that most had expected 99 cents. In addition, the company said it will slash 750 jobs and take a third-quarter charge of $45 million in connection with the consolidation of its personal storage and enterprise storage divisions. Western said its inventories stand at the lowest level in 18 months. The stock subtracted 1 9/16 to 17 11/16.
The Standard & Poor's 500 Index rose 0.4 percent.
New York Stock Exchange winners trailed losers by 8 to 7. Fifty-two week highs totaled 105, while 52-week lows came to 49.
On the Big Board floor, turnover swelled 17 percent to 903 million shares.
The Nasdaq Composite advanced 0.3 percent. Advancing issues led decliners by 70 shares in the Nasdaq Stock Market. There were 207 52-week highs and 30 52-week lows. Volume totaled an exceptionally heavy 1.27 billion shares.
The Russell 2000 Index of small-company stocks sank 0.1 percent.
In the bond market, the 30-year Treasury fell 3/32, to yield 5.160 percent.
Market bellwether General Electric (GE) pulled back 1 1/4 to 100 3/16. Its fourth-quarter results of 80 cents a share matched the consensus figure of a First Call poll of research analysts. The conglomerate said it's "well-positioned" for a record year of results in 1999. Wall Street anticipates 14 percent earnings growth in 1999.
General Motors (GM) drove right past Wall Street projections with its fourth-quarter operating profit of $3.25 a share. Most analysts had eyed $2.65, according to First Call. The shares rose 1 1/8 to 89 1/8. Rival Ford appreciated 3/4 to 64 11/16.
Caterpillar (CAT) subtracted 3/4 to 45 3/16. The construction equipment manufacturer netted 83 cents a share in the fourth quarter, matching the figure of most Wall Street analysts as polled by First Call. Revenues grew 4 percent in the period.