Dell Leads Techs Lower; Dow Slides Under 9,900
Dow 10,000 got a little farther away on Monday as technology stocks sank again, dragging the entire market lower.
In commodity markets, crude oil rose almost 2% to $15.50 a barrel ahead of the Organization of Petroleum Exporting Countries’ meeting today in Vienna to ratify an output-reduction agreement.
On Wall Street the Dow Jones industrials eased 13.04 points to 9,890.51 in a lackluster session for blue chips overall.
The Nasdaq composite, meanwhile, slid 1.1% as Dell Computer tumbled $2.38 to $37.88 on fresh worries about its first-quarter sales and earnings. Dell stock now is down 31% from its recent peak.
As on Friday--when the Dow initially surged past the historic 10,000 mark only to tumble in late trading--its two tech stocks were a big drag. IBM lost $1.56 to $167 and Hewlett-Packard fell $1.69 to $69.
They followed Dell lower. Shares of the world’s biggest direct seller of personal computers fell after Donaldson Lufkin & Jenrette Securities analyst Kevin McCarthy cut his estimates for the company’s first-quarter results. He lowered his earnings estimate to 15 cents a share from 17 cents.
On Friday, a Morgan Stanley analyst cut his price target for IBM shares because of expectations of slowing growth.
Other tech issues hurt in recent weeks by growth concerns include Compaq and Oracle. They fell further on Monday, with Compaq down 63 cents to $30.13 and Oracle off 38 cents to $27.19.
With the tech sector in the doldrums, Wall Street has been waiting for other groups to take a “leadership” role. Bank stocks, which have been rallying, were mixed on Monday.
The market overall was stuck in the mud. Losers outnumbered winners by 17 to 12 on the New York Stock Exchange in slow trading.
“People are a little nervous that the market has moved too fast too soon, and maybe a little consolidation would be healthy before moving upward again,” said Leonard Hefter, manager of Jefferies & Co. in Dallas.
Among the day’s highlights:
* Dow stocks moving higher included J.P. Morgan, up $3.31 to $126.44 on renewed takeover rumors; Boeing, up 88 cents to $34.88; Exxon, up 69 cents to $73.75; and Philip Morris, up 94 cents to $41.81.
* While many big-name tech shares were weak, many Internet shares roared ahead.
America Online leaped $10.75 to a record $130 after ING Baring Furman Selz analysts Frederick Moran and David Levy predicted the company will have 20 million subscribers by mid-1999, allowing it to dominate Internet service. They reiterated their “strong buy” recommendation, and said they expect the stock to reach $180 in nine months.
Other hot Net shares included Excite, up $6.94 to $128.69; Go2Net, up $33.81 to $151.06; and Xoom.com, up $4.63 to $72.13.
But Friday’s hot new stocks--IVillage and Cheap Tickets--fell back. IVillage dropped $9.38 to $70.75 and Cheap Tickets lost $4.63 to $26.63.
Another Net stock falling sharply was Network Solutions, down $43.25 to $244.75 after trading at a record $307.50. The company said it knew of no reason for the drop.
* Cable TV shares rose after Comcast agreed to buy MediaOne Group. MediaOne soared $7.75 to $68.50, TCA Cable TV rose $3 to $46.38 and Adelphia gained $2.88 to $61.50.
* Oil stocks rose ahead of the OPEC meeting, with Chevron up 88 cents to $88.38 and Halliburton up $1.38 to $38.25.
OPEC will be voting on an agreement with non-OPEC producers for a 2-million-barrel-a-day cut in output, made after prices fell to 12-year lows in December. Including cuts pledged last June, producers will be trimming the daily supply by more than 5 million barrels, or about 7%.
“We have new OPEC cuts and the whole equation looks better for prices,” said Michael Fitzpatrick, a trader at Fimat USA Inc. in New York.
Even though producers last year pledged cuts totaling 3.23 million barrels a day, compliance with the agreements slipped and demand from Asia fell, sending prices to the December lows.
Market Roundup, C15
Buying the Dow, C6
