Wall Street Stocks Move Higher

AP Online, Jan 27, 2000 11:18 hrs

NEW YORK (AP) - Stocks moved sharply higher today as investors brushed off a profit warning from Dell Computer and bought a wide range of technology names, helping the Nasdaq composite to rebound from Wednesday's slump.

In morning trading on Wall Street, the Dow Jones industrial average was up 118.51 at 11,151.50.

Broader stock indicators were also higher. The Standard & Poor's 500 index was up 13.33 at 1,417.42, and the Nasdaq composite index was up 59.56 at 4,129.47, bouncing back from Wednesday's 97-point decline.

Stocks advanced despite a profit warning from one of the technology sector's most reliable performers.

Dell slipped 9/16 to 39 13/16. Late Wednesday, the company said it will miss analysts' profit and sales estimates this quarter due to parts shortages and slower customer demand. Dell cited Year 2000 computer concerns for the shortfall.

Today, however, Wall Street brokerages including Merrill Lynch and Chase Hambrecht & Quist stepped in to defend the company, raising their recommendations on the stock.

``That's a sign of a real bull market,'' said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons in St. Louis, Mo. ``Dell released a very disappointing announcement, yet investors are able to look beyond the valleys to the good news ahead.''

Other technology companies posted sharp gains. Conexant, which will be added to the S&P 500 after the close of trading Friday, rose 11 5/8 to 85 15/16. Companies often get at least a short-term boost when they are added to an index, as mutual fund managers who try to mirror an index's performance buy shares of the newly added company.

Kellogg rose 7/16 to 25 1/4 after saying fourth-quarter profits rose 47 percent from last year as the company cut down on inefficient promotional efforts. Some investors were troubled, however, by a decline in cereal sales.

Advancing issues outnumbered decliners by a 4-to-3 margin on the New York Stock Exchange, where volume came to 342.88 million shares, on par with Wednesday's pace.

The Russell 2000 index of smaller companies rose 4.52 to 525.56.

-- Possible Impact (posim@hotmail.com), January 27, 2000

Answers

This reminds me of those wild parties you went to in college that gets louder and wilder as everyone gets more and more drunk. The band keeps turning up the volume as everything melds into a wild abandon...

-- Ed (Edt@hotmail.com), January 27, 2000.

``That's a sign of a real bull market,'' said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons in St. Louis, Mo. ``Dell released a very disappointing announcement, yet investors are able to look beyond the valleys to the good news ahead.''

I knew I did,t have any SMARTS. So where do you find fellows like this?

-- Tommy Rogers (Been there@Just a Thought.com), January 27, 2000.

Consensus on Dell seems to be that everyone and their third cousin knew about the earnings problems weeks ago and had taken appropriate action, so only smaller "retail" investors were left to react to the news.

Alfred E. Goldman (who is doing a pretty fair impression of Alfred E. Newman, it appears) needs to have a look at the latest Intraday numbers:

1:00PM EST: DOW -27.30; NASDAQ -27.02; S&P500 -7.62. Matkets peaked around 11AM and have been declining ever since.

Mr. Goldman did not comment on the fact that this market has gone steadily DOWN during a week with lots and lots of good earnings news. Three months ago, equities went up when there was even the hint of good news. That change in behavior is quite significant.

-- DeeEmBee (macbeth1@pacbell.net), January 27, 2000.

Fascinating. Someone (or something, i.e., a buy program) jumped in right at 1PM and all three indices bounced up like a superball. Of course, a drop of 1.6% in 45 minutes would probably attract a few buyers, but whatever it was that moved everything up a full 2% right at 1PM must have been big!

-- DeeEmBee (macbeth1@pacbell.net), January 27, 2000.

Sorry, that was a typo. It was a 0.2% jump, not 2%. A 0.2% move in 15 minutes is still a whole mess o' money, but a full 2% move in a major index in that small a timeframe is almost unimaginable.

However, with this volatile a market, who knows?

-- DeeEmBee (macbeth1@pacbell.net), January 27, 2000.