The Dow Jones Industrial Average cracked the 10,000 barrier Tuesday, took a quick look around, and promptly turned tail and fled.
After hitting 10,001.78 early in the session -- surpassing 10,000 for the first time in its 114-year history -- the Dow closed down 28.30 points at 9930.47. The rest of the market followed the blue-chip index back to more familiar territory, trading in a fairly narrow range for the remainder of the day.
The Wired Index dropped 0.85 points to 627.95, while the Nasdaq Composite Index was 7.83 higher at 2439.27. The S&P 500 shed 0.90 to 1306.36.
Share prices firmed up a bit in the late afternoon after Abby Joseph Cohen, Goldman Sachs' influential market guru, told Reuters that current market valuations are justified by the relative strength of the US economy. "The bull market is not over," she declared. But the market wasn't entirely convinced, and soon turned choppy once again.
In any case, most traders were glad to have the 10,000 milestone out of the way. Such intense focus on the handful of stocks comprising the Dow industrials was distracting attention from broader trends, such as the earnings outlook for tech shares and continued economic turbulence abroad.
"It's just psychological," Les Childress, president of Childress Investment Research, said of the mystique of 10,000. He added that the market will have to work harder if it is to remain atop that magic number. "We've stretched valuations pretty far."
But not everyone was so dismissive of the event. "This puts a lot of shine back on Wall Street," said Arthur Hogan, chief market analyst at Jefferies & Co. "Everything was all Bill and Monica and Asian meltdown. This puts a warm, fuzzy glow on everything."
It didn't take long for the moment to arrive. The Dow jumped more than 40 points in the first 15 minutes of trading, and cheers broke out on the floor of the New York Stock Exchange as all those zeroes lit up the big board for the first time.
Then it was back to business as usual. For the day traders, this meant doing their usual number on FlashNet Communications (FLAS), which more than doubled to US$43.63 on its first day of trading. The Internet service provider debuted with 3 million shares at an initial price of $17 each.
No surprise here. FlashNet was among several Net-related companies with IPOs slated for this week or next, and its arrival had been eagerly awaited by those who enjoy making fodder of Internet stocks. Renaissance Capital tapped FlashNet as its "IPO of the week," noting that "the company is cheap on a subscriber basis and is a possible takeover candidate."
Meanwhile, iVillage jacked up the selling price for its IPO by 77 percent. The online women's network told the Securities and Exchange Commission it now will sell 3.65 million shares for up to $24 apiece, raising more than $80 million. Previously, iVillage had planned to go public at no more than $14 a share.
Lycos (LCOS), soon-to-be parent of Wired News, slipped 25 cents to $105.50 after announcing it doesn't expect any changes in its merger with USA Networks, and likely will file a proxy statement with the SEC within a week. Lycos' biggest shareholder, investment firm CMGI, has been maneuvering to scuttle the deal.
Online computer retailer Cyberian Outpost (COOL) climbed 16 percent to $21.38 after launching a new auction service, OutpostAuctions.com. And Go2Net (GNET) was up 11 percent at $126 on continued enthusiasm over Paul Allen's Vulcan Ventures purchasing a controlling stake in the firm.
A clothing merchant called Today's Man (TMAN) jumped 71 percent to $2.03 after saying it will develop a site to hawk its wares via the Net. Qwest Communications International (QWST), which will assist in building the online outlet, was down 19 cents at $74.38.
And there's Netoy.com (NTOY), an online toy retailer, surging 146 percent to $14.75 after announcing it will add Gund teddy bears -- a favorite among bear aficionados -- to its cyber-shelves. Netoy.com debuted Monday on the OTC Bulletin Board, ambitiously declaring that it intends to become "the leading retailer of children's products on the Internet."
Fedmeister Alan Greenspan did little to bolster investors' confidence. In a speech mostly focused on the US agricultural sector, Mr. G noted that "after eight years of economic expansion, the economy appears stretched in a number of dimensions, implying considerable upside and downside risks."
While that insight was sufficiently ambiguous as to not ruffle the market's feathers much, it seemed to imply that Greenspan remains worried about US economic growth, which could mean an eventual hike in interest rates. "Stretched" seems to be the big word with the G-man of late.
AMR (AMR), parent of American Airlines lost 75 cents to $61 after warning that its 1999 earnings will reflect a sick-out by pilots last month that resulted in cancellation of more than 6,600 flights. The company said it will try to offset the setback by reducing capital spending.
On the other hand, 800 Travel Systems (IFLY), which specializes in discount airline tickets, soared 48 percent to $7.69 after posting quarterly profit of 2 cents a share, compared with a loss of 3 cents a year ago. The company said its new Web site logged more than a million hits in its first month of operation.
Energy giant Enron (ENE) slipped $1.06 to $66.94 after saying its water-services subsidiary, Azurix, has filed to go public. Azurix is aiming to raise $750 million to fund operations and new acquisitions.
Lastly, discount broker Charles Schwab (SCH) gained $1 to $88.94 after telling investors it expects to post record first-quarter profits thanks to a continuing boom in online trading. Separately, Schwab said it gave its president, David Pottruck, a 38 percent raise to $7 million last year so his take-home pay would be in line with that of the firm's namesake chairman.
All well and good. But check out Philip Morris (MO) over there, giving CEO Geoffrey Bible a bonus of $3.5 million for his part in helping the tobacco industry duck further litigation by reaching a $206 billion settlement with 46 states. This comes in addition to Bible's normal $1.5 million salary.
Not bad for running a company that systematically kills its customers. Philip Morris' stock lost 13 cents to $38.50.
