Anxiety Abounds

  • September 27, 2000
  • Daniel Beighley

Pre-announcement anxieties continued to weigh on stocks Wednesday, as an
earnings warning from Priceline.com triggered a big selloff in the Internet
sector that helped drag the Nasdaq down 0.9%. The hangover from Kodak’s warning
continued to haunt the blue chips as well, but the Dow and S&P 500 did
manage to battle back from mid-day declines to finish flat.

In economic news, durable goods orders showed a 2.9% increase for August, which was
higher than the 2.4% increase analysts had expected. July’s figure was revised
downward from a 12.4% decline to a 13.1% decline, and that may have  helped
offset any concern that September’s number was too strong.

Nasdaq trading volume rose 7% above Tuesday’s level to a hefty 1.93 billion
shares, while NYSE volume increased by about 5% to 1.16 billion shares. 

“I think the market is still very queasy about what earnings prospects
are going to be going forward, and I still think there is some uneasiness about
whether or not oil prices will come in,” said Louis Parks, Senior Managing
Director, Raymond James Financial.

With earnings concerns being the primary driver, portfolio managers are going
to probably tweak their portfolios to make some adjustments but not make too
many tremendous additions or deletions right now. from the portfolios. So, I
think we’re just going to see some status-quo sideways movement,” he added.

According to preliminary numbers, the Nasdaq fell 32.78 to 3656.32, the Dow
lost 2.96 to 10,628.36, and the S&P 500 eased less than a point to 1426.57.

Top-performing sectors included gold and silver
(
$XAU.X |
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PowerRating), up 3.9%, integrated oils
(
$XOI.X |
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PowerRating), up
2.1%, and oil services
(
$OSX.X |
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PowerRating), up 1.7%.

Sectors under the most pressure included Internets
(
$GIN.X |
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PowerRating), down
5.6%,
Japanese stocks
(
$JPN.X |
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PowerRating), down 1.7%, and broker/dealers
(
$XBD.X |
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PowerRating),
down 1.7%.

Priceline.com
(
PCLN |
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PowerRating) plunged 7 7/8 to 10 3/4 after saying it would not
meet analysts’ expectations due to slowing online sales. The Priceline news
spooked the Internet sector, sending it into a nosedive.

Yahoo!
(
YHOO |
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PowerRating) dropped 12 1/16 to 90 1/32 and was one of the big losers
in the Goldman Sachs Internet index. Also hammered were CMGI
(
CMGI |
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PowerRating), down
13%, PSINet
(
PSIX |
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PowerRating), down 10%, and eBay
(
EBAY |
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PowerRating), down 9%.

Eastman Kodak
(
EK |
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PowerRating) continued lower following its 25% Tuesday plunge after its earnings warning. Kodak
fell 2 1/4 to 42 7/16 and was one of the bigger losers in the Dow. Also weak
were Honeywell
(
HON |
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PowerRating), down 2.7%, Microsoft
(
MSFT |
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PowerRating), down 3.1%, and Caterpillar
(
CAT |
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PowerRating), down 6.0%.

Dow winners included Hewlett Packard
(
HWP |
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PowerRating), up 4.0%, Phillip Morris
(
MO |
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PowerRating), up
3.7%, Merck
(
MRK |
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PowerRating), up 3.6%, and Exxon Mobil
(
XOM |
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PowerRating), up 3.0%.

Looking ahead, the second quarter GDP numbers will be released Thursday at
8:30 AM ET, and analysts look for a figure showing a 5.3% growth rate.

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