Wall Street returned to form Friday as a day-long rally carried the market comfortably into the weekend. Bargain hunting was the order of the day, with investors combing through the debris from this week's sell-offs and cautiously replenishing their portfolios.
Tech and Internet stocks set the pace after coming way down in price. Traders decided to conveniently forget their previous worries about too-high valuations. The market, as we all know, has a very short attention span.
The Dow Jones Industrial Average rose 41.32 points to close at 9339.95, and the Nasdaq Composite Index was up 22.89 at 2283.44. The S&P 500 advanced 1.88 to 1239.16.
Investors are now looking ahead to Fed chief Alan Greenspan's appearance before Congress next Tuesday, and will be listening carefully for any clues, cryptic or otherwise, as to the course of interest rates. The smart money is on a rate hike being announced when the Fed meets in March.
Perhaps in anticipation of some dark tidings from the G-man, stocks retreated from their earlier highs in the late afternoon, finishing the week on a somewhat ambiguous note.
Net shares found their footing after CIBC Oppenheimer analyst Henry Blodget said it "may be time to buy" industry leaders like Yahoo (YHOO) and Amazon.com (AMZN), both of which have come down in price by almost half in the past month. Yahoo gained US$6.50 to $135.38, and Amazon was 14 percent higher at $101.88.
"They're still not cheap stocks," said Arthur Newman, an analyst with Gerard Klauer Mattison. "But at least the market leaders are the ones that will survive. In another year, there aren't going to be as many Internet companies around.
"The market is rebounding and techs are stronger," he added. "We'll have to see whether it continues."
Speaking of uncertainties, Lycos (LCOS) climbed $3.25 to $87.50 amid anonymously sourced stories that the portal's acquisition of Wired Digital, parent of Wired News, still has the backing of managers at both companies. Speculation mounted this week that the tie-up was in trouble following reports that a spat among Wired shareholders may scuttle the deal.
Meanwhile, it's anyone's guess as to how Lycos' merger with USA Networks (USAI) is progressing. Both sides have become suddenly quiet after being quite vocal about the merits of the arrangement. Could it be that a higher premium for Lycos shareholders is under negotiation?
Out of nowhere, Steven Spielberg popped up with the purchase of a 5.8-percent stake in Ticketmaster Online-CitySearch (TMCS), one of USA Networks' electronic-retailing properties to be merged with Lycos. Considering how many movie tickets Spielberg sells, he probably figures he's entitled to a bigger slice of the box-office pie. Ticketmaster rose $1.63 to $36, and USA was up 56 cents at $38.
A pair of well-timed IPOs: WebTrends (WEBT), maker of software to manage corporate sites, more than doubled to $27.06 after debuting with 3.5 million shares initially priced at $13 each. And Vignette (VIGN), which produces e-commerce software, jumped 125 percent to $42.69 after arriving with 4 million shares priced at $19 apiece.
Merrill Lynch (MER) looks like it's finally getting with the program. The biggest US brokerage rose $2.50 to $72.38 after saying it will buy investment firm DE Shaw's online-trading operations. Merrill said it plans to begin offering online trading to a portion of its almost 5 million clients by the end of March.
Educational software maker Advantage Learning System (ALSI) jumped 12 percent to $67.88 after posting fourth-quarter profit of 27 cents a share, topping estimates by 4 cents. The company said its customer base grew to approximately 41,400 schools, or more than a third of all US schools.
And how are things in Japan? Not so good. Electronics giant NEC (NIPNY) said it will see an almost $1.3 billion group net loss for the current fiscal year, and will slash its workforce by 15,000. In keeping with custom, the company's president, Hisashi Kaneko, will resign to take responsibility for NEC's performance, but will still receive a paycheck as an "adviser." NEC slipped 13 cents to $44.
In telecom, CoreComm (COMMF) climbed 27 percent to $33.25 as it agreed to buy the bulk of USN Communications' assets for as much as $85 million in ready cash. USN is now cleaning house after filing for bankruptcy protection from creditors. Meanwhile, satellite communications provider Comsat (CQ) advanced $1.50 to $29 after Salomon Smith Barney raised its rating for the company's stock to "buy" from "outperform."
A gloomy day for DaimlerChrysler (DCX). The automaker fell $2.56 to $93.94 after being told by a Philadelphia court to pay $58.5 million in damages in a case where a woman said she was burned by gases from a deploying airbag. Daimler will try to have the decision overturned or will file an appeal. ("Ten years ago, we would have received as thank-you note from a customer for the airbag having saved her life," a company lawyer was quoted as saying. "Today, we get slapped with a multimillion-dollar verdict.")
Polaroid -- boy, we haven't heard from these guys in a while -- vaulted 15 percent to $21.88 following a highly speculative report in Business Week that the company may be seeking a merger partner. Polaroid (PRD) could be worth as much as $40 a share, the magazine said.
Lastly, Pfizer (PFE) had the near-term rating for its stock downgraded by Merrill Lynch to "accumulate" from "buy." The Viagra maker sagged $2.81 to $128.31.
Sorry. Couldn't resist.
