Maybe next week.
Although the Dow Jones Industrial Average started strong, jumping more than 50 points early Friday to a high of 9958.77, it soon lost momentum and investors watched in frustration as the milestone 10,000 mark slipped further out of reach. A profit warning from Caterpillar, coupled with more earnings disappointments from the tech camp, caused the Dow to close 21.09 lower at 9876.35.
"Ten thousand is a significant barrier," said George Koo, associate director of Burnham Securities. If history is any judge, he added, the Dow first will have to establish a toehold at 9900 before taking a serious stab at 10,000.
"At every century mark, the market reaches the point and then sells off," Koo observed. "Then you have investors looking for bargains a few days later." And the process begins anew.
The Wired Index shed 4.15 points to 617.10, and the Nasdaq Composite Index was down 30.70 at 2381.55. The S&P 500 was 3.09 lower at 1294.59.
The Dow's party was crashed in the morning by component Caterpillar (CAT), which fell 12 percent to US$44.69 after warning that its first-quarter earnings probably will be about half what analysts had been expecting, which was 84 cents a share. The heavy-machinery maker said its bottom line had been bulldozed by a slowdown in overseas sales.
Then came grim tidings from the tech crowd. Oracle (ORCL) reported quarterly income of 20 cents a share, topping estimates by a penny, but spooked investors with lower than expected revenue. A half-dozen brokerages promptly downgraded the company's stock, sending Oracle's share price tumbling 23 percent to $28.56.
Fueling traders' anxiety, National Semiconductor (NSM) dropped 56 cents to $10.13 as it reported a quarterly loss of 16 cents a share -- not quite as bad as analysts had been expecting -- and said it's taking a cautious stance regarding future earnings due to shaky personal-computer sales. Needham & Co., for one, was pleased with Nat Semi's performance, upgrading the chipmaker's stock to "strong buy" from "buy."
Other computer-related shares were mixed. Dell Computer (DELL) rose 31 cents to $42.19, while International Business Machines (IBM) was down $3.75 at $179.13. Compaq Computer (CPQ) was down 6 cents at $30.19, and Intel (INTC) was 13 cents higher at $118.25.
"You'll see a ripple effect in tech," Burnham's Koo said. "Investors will shy away from the sector if they think it's the top."
Meanwhile, Microsoft (MSFT) was attracting attention amid reports that the company is set to announce a reorganization that will break it into four divisions centered on customer needs instead of product lines. Microsoft's shares slid $1.25 to $160.19 as the company said product revenue for the current quarter would come up short by about $400 million as it offers coupons for free upgrades from Office 97 to Office 2000.
Venture-capital firm CMGI (CMGI) fell 10 percent to $164 after reporting a quarterly loss of about 40 cents a share, excluding gains from recent stock sales. This was considerably worse than the anticipated 22 cent setback.
But investors seemed more interested in CMGI's intentions concerning Lycos (LCOS). CMGI chief exec David Wetherell insisted once again that the terms of Lycos' merger with USA Networks are "inadequate" for the portal's shareholders (among which CMGI is the biggest), and the Boston Globe reported that an alternative suitor may step forward "within several days."
For its part, Lycos, soon-to-be parent of Wired News, was 9.5 percent lower at $98.63 as another class-action lawsuit was filed against the company charging that it misled investors by saying it was "committed to an independent strategy" when in fact it was negotiating a tie-up with USA Networks. The suit seeks an unspecified amount in damages.
Prodigy Communications (PRGY) gained $2.25 to $43 after revealing that its fourth-quarter loss had narrowed to 38 cents a share from $2.14 a year ago. The Internet service provider, which went public last month, said revenues were up 174 percent.
Sharper Image (SHRP) climbed 31 cents to $11.63 as the retailer of gadgets and toys reported that its online sales were up 380 percent in the first 10 days of March, and that total sales increased 27 percent. CEO Richard Thalheimer said the month's top-selling items included a super-silent air purifier and a hand-held remover of carpet stains.
Bottomline Technologies (EPAY), an electronic banking firm, surged 54 percent to $57.86 as BT Alex. Brown and BancBoston Robertson Stephens began coverage of the company with "buy" ratings. Bottomline went public last month, selling 3.4 million shares at an initial price of $13 each.
Profiles in Courage: Nike (NKE) said it would open its overseas factories for inspection by human-rights groups, but only if its competitors agreed to do likewise. Apparently Nike doesn't want to be the only sneaker maker found to be a less-than-scrupulous employer of Third World labor. The company's shares advanced 13 cents to $55.81.
Disney (DIS) was $1.38 higher at $36.06 as Deutsche Bank Securities and BT Alex. Brown upgraded the company's stock to "buy." Both brokers saw Team Mickey's shares reaching about $40 within the next year.
Lastly, Gap (GPS) CEO Millard Drexler is good, but is he that good? The khaki king received a $47.1 million pay package last year, according to the San Francisco Chronicle, well above the $5.2 million he pulled down in 1997. Sure, Gap saw record earnings in the fourth quarter and in fiscal '98, but does that really merit an annual raise of more than $40 million?
Gap's stock was down $2.25 at $66.50.
