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Markets Shrug Off Kosovo

U.S. blue-chip stocks, dragged down by earnings concerns, closed little changed Wednesday after prices showed scant reaction to news of NATO air strikes on Yugoslavia.

But technology stocks turned in the final two hours of action to record hearty gains, with bellwether names leading the charge.

The Dow Jones Industrial Average declined 4.99 points, or 0.1 percent, to 9,666.84.

The Nasdaq Composite rose 42.44 points, or 1.8 percent, 2,365.28.

"I think today's activity was related to a combination of Kosovo and nervousness over earnings," said Buzzy Geduld, president of Herzog Heine Geduld. "Anytime there's uncertainty, it's never good for the market."

"It's my opinion that Kosovo is not near as critical to the market as prospects for earnings and revenues in the computer areas like computer manufacturing and chip manufacturing," said Edward Wedbush, president of Wedbush Morgan Securities.

"All of these international events over the last 10 years have not had much impact on the market," Wedbush continued. "If it has the prospect of getting into something way beyond what the military guys think it would, then it would impact the market."

Things were quiet on the earnings front Wednesday; a series of earnings warnings and analyst downgrades have dented technology stocks and raised investors' anxiety levels in recent weeks.

Data storage kingpin EMC (EMC), a stellar performer since the Oct. 8 market lows, put on 5 to 118 7/8. It penned a three-year pact with International Business Machines (IBM), whose shares rose 4 1/8 to 169 1/2. IBM will supply EMC with computer equipment. Eventually, the companies plan to exchange patented technology.

Read-Rite (RDRT) said it expects sales for the second quarter to be about 10 percent leaner than the first quarter's $230.2 million. In addition, the maker of disk drive components said it will report a loss for the period. Wall Street had expected a profit of 7 cents a share, a First Call Corp. poll of analysts had indicated. Read-Rite had earned 2 cents in the first period. The company will unveil complete results at the close of trading on April 14. The stock fell 1 5/8 to 6 1/8.

EMC's decision to link with IBM and Read-Rite's profits warning weighed on shares of data storage stocks. Seagate Technology surrendered 2 1/8 to 26, and Hutchinson Technology retreated 1 3/16 to 23 15/16.

A sprinkling of bellwether technology issues cranked out multiple point gains. Cisco Systems rose 4 1/8 to 104 7/16, Microsoft 4 11/16 to 171 1/4, Intel 4 11/16 to 119 1/4, Sun Microsystems 3 7/16 to 113 5/16, and Dell Computer 2 13/16 to 38 1/2.

At the other end of the technology spectrum, a smattering of Internet names picked up gains after Tuesday's shabby outing. DoubleClick was ahead 12 7/8 to 179 7/8 and CMGI picked up 12 3/8 to 176 3/8.

LM Ericsson (ERICY) eased 1 1/2 to 21 1/16 after the company indicated first-half results wouldn't meet most forecass. Morgan Stanley Dean Witter lowered its opinion on the Swedish telecommunications equipment manufacturer to "underperform" from "neutral."

For the second day, Internet stocks brought up the rear of the market. But that didn't stop the latest Web IPO from taking off. MiningCo.com (MINE) vaulted 22 1/2 points, or 90 percent, to 47 1/2 after the online provider of news and information priced 3 million shares at $25 each.

America Online (AOL) gave back 3 7/8 to 117 1/8. The Internet portal and content provider will lay off up to 500 Netscape Communications workers and up to 500 of its own workers as it absorbs the company it acquired for $10 billion.

Bottomline Technologies (EPAY) rallied 19 to 71 1/2. BancBoston Robertson Stephens repeated its "buy" recommendation on the provider of business-to-business payment authorization software. It sees earnings of 38 cents a share in 1999 and 51 cents in 2000.

Goldman Sachs market strategist Abby Joseph Cohen hiked her 12-month price target on the Dow to 10,300 from 9,850. Cohen also lifted her objective for the S&P 500 index to 1,325 from a range of 1,275 to 1,300.

In Wednesday's market indicators:

  • The Standard & Poor's 500 Index rose 0.5 percent.
  • New York Stock Exchange losers outweighed winners by 15 to 14.
  • On the Big Board floor, turnover shrank 6 percent to 762 million shares.
  • Declining issues bettered risers by 21 to 19 in the Nasdaq Stock Market.
  • The Russell 2000 Index of small-capitalization stocks climbed 0.3 percent.

    In the bond market, Treasurys showed no reaction to the bombings. The 30-year Treasury rose 7/32, to yield 5.529 percent.


Among the companies in the news:
  • 3Com (COMS) released fiscal third-quarter operating results of 24 cents a share, a penny richer than a First Call Corp. analyst survey had forecast. The company also laid plans to buy back as many as 10 million of its common shares. Shares of the computer networker advanced 13/16 to 24 7/16.
  • Micron Technology (MU) advanced 2 7/8 to 53 1/2. ABN AMRO analyst David Wu started coverage of the memory chip manufacturer with a "buy" recommendation, a 12-month price target of $100 and an 18-month price objective of $140.
  • Just For Feet (FEET) netted fiscal fourth-quarter net of 9 cents a share, in line with what most analysts had projected according to First Call Corp. It earned 20 cents in the year-earlier period. The retailer of athletic and outdoor footwear said results were impacted by unseasonably warm weather in November and much of December. The stock rose 1/16 to 10 7/16.
  • Arrow International (ARRO) checked in with fiscal second-quarter operating profits of 47 cents. That met most analysts' expectations per First Call Corp. The manufacturer of disposable catheters said August 1999 fiscal year operating results will likely be at the lower end of a range of $1.90 to $1.93. According to First Call Corp. most analysts look for $1.94. The shares advanced 15/16 to 24 1/4.
  • H.B. Fuller (FULL) gained 7 7/8 to 55 7/8. The manufacturer of adhesives, sealants, and paints earned 67 cents a share on an operating basis in the first quarter. That was 14 cents ahead of most estimates according to First Call Corp.
  • Smallworldwide (SWLDY) decayed 4 3/16 to 5 15/16. The British software concern, blaming a substantial shortfall in anticipated license revenues in Germany, sees a fiscal third-quarter loss of 75 cents to 95 cents a share. Per First Call Corp., most analysts had expected a profit of a dime.
  • Revlon (REV) lifted 5 3/16 to 22 1/4 on takeover speculation after climbing 3 5/16 Tuesday.
  • CBS Corp. (CBS) rose 1 3/8 to 39 3/8. Late in the session, Chief Executive Mel Karmazin said CBS is "performing extraordinarily well" in all of its units and said the media concern is committed to being the largest player in the Internet business. CBS Corp. holds a significant stake in CBS.MarketWatch.com.