Stocks Wilt During Quiet Session as Early Gains Evaporate
Stocks drifted lower in a quiet session Thursday, with most market averages slipping back from the record highs set Wednesday. Early gains evaporated as demand waned in the last full session of 1999.
The Dow Jones industrial average fell 31.80 points to close at 11,452.86. Earlier, the Dow was up as much as 84 points.
Broader stock indicators were mostly weak. The Nasdaq composite index fell 4.59 points to 4,036.87. The Standard & Poor’s 500 edged up 1.01 points to 1,464.47, another record. The Russell 2,000 index of smaller companies, which set a record high Wednesday, dipped 0.43 point to 496.59.
For most of the session, stocks appeared poised to extend the rally that pushed the Nasdaq to its first close above 4,000 Wednesday and brought other market measures to new records as well.
But volume dried up in early afternoon as some Wall Street professionals wrapped up their workweeks early. Most financial markets, including the stock market, will conduct a half day of trading today, closing at 10 a.m. PST for New Year’s Eve.
Traders said holiday volume is especially light this year. Any trades made Thursday or today will be settled next week, and many investors have opted to stay out of the market until the impact of Y2K computer conversions is clear.
“There’s a great deal of volatility and odd market activity at this time of the year,” said Charles G. Crane, chief market strategist at Key Asset Management. “These sessions are not particularly meaningful in predicting the course of the market.”
Most activity Thursday arose from investors’ continued enthusiasm for tech companies, which have dominated the market all year and helped the Nasdaq composite to the best-ever annual performance for a U.S. stock index. At the close of trading, the Nasdaq was up 84% for the year, compared with a 25% return by the Dow Jones industrials.
Qualcomm, which soared 31% on Wednesday after PaineWebber analyst Walter Piecyk said its shares should reach $1,000 within a year, had another wild session Thursday. Shares rose as high as $740.13 in early trading, then dipped to a loss of $12, closing at $647.
A 4-for-1 split of Qualcomm stock took effect at the close of trading Thursday, in effect making Piecyk’s eye-catching price target $250 per share.
Agilent Technologies, the company spun off from Hewlett-Packard earlier this year, became the latest beneficiary of an analyst’s rosy projections. Agilent rose $7.25 to $79.25 after Lehman Bros. raised its 12-month price target to $90. H-P rose $1.63 to $115.25.
Two prominent Internet retailers--Amazon.com and Priceline.com--slumped. Amazon fell $4.44 to $79.06 and Priceline slipped $3.81 to $46.75.
Advancing issues outnumbered decliners by a 9-7 ratio on the New York Stock Exchange.
A mild bond rally sent the benchmark 30-year Treasury yield to 6.42%, from 6.44% the day before.
Among the equity highlights:
* Another analyst pop went to Yahoo, which gained $12.38 to $416.06 after the leading Internet search directory was reiterated “buy” at Argus Research, with a $550 price target.
* Commtouch Software surged $11.63 to $49.13 after Microsoft bought a 4.7% stake in the e-mail software and services provider for $20 million.
* Young & Rubicam jumped $10.44 to $73 after Standard & Poor’s said the advertising company will replace General Instrument in the S&P; 500 after trading Jan. 5. General Instrument rose $1.13 to $84.50.
FYI, a provider of document and information outsourcing services, rose $3.25 to $34.88. It will replace TJ International in the S&P; small-cap 600 index the same day. TJ dipped 6 cents to $41.88.
* Small and mid-size biotech shares extended recent gains. Affymetrix rose $4.56 to $184.75, Human Genome Sciences jumped $10.56 to $159.56, and Immunex rallied $9 to $116.
Market Roundup, C10
