Whoomp -- there it is.
The Dow Jones Industrial Average closed above the 10K mark for the first time ever Monday, boosted by some heavy-duty merger action, plus high hopes that the Fed will leave interest rates alone when Greenspan & Co. gather on Tuesday.
Internet stocks, meanwhile, took their cue from Amazon.com, which won applause from investors with its decision to go head to head with eBay in the online auction game.
The Dow rose 184.54 points to close at a record 10006.78, and the Wired Index was 18.70 higher at 635.02. The Nasdaq Composite Index gained 72.78 to 2491.95, and the S&P 500 was up 27.20 at 1310.
Share prices surged from the outset on word that BP Amoco (BPA) is in talks to purchase Atlantic Richfield (ARC) for approximately US$25 billion. The deal, if it goes through, would give the merged company about the same oil-production capacity as a combined Exxon and Mobil. BP advanced $4.50 to $104.94, and Arco was up 13 percent at $74.19.
Another marriage-in-the-works involves CBS (CBS) negotiating a buyout of King World Productions (KWP), the force behind such highbrow fare as Jeopardy. The deal could be worth as much as $3 billion. CBS rose 44 cents to $40.38, and King World was $1.06 higher at $31.
And in the tech arena, software developer Platinum Technology International (PLAT) rocketed 144 percent to $24.06 on news that it will be purchased for more than $3.5 billion by Computer Associates. The tie-up creates a formidable presence in the field of systems-management programs. Computer Associates (CA) was up $3 at $36.94.
Many observers think a modest pullback is likely now that a five-digit close has been achieved. Don't be surprised if more than a few traders cash in on their winnings over the next day or two before once again sending share prices through the roof.
Netwise, Amazon.com (AMZN) gained $10.56 to $149.63 on news that it will get into the auction business in a big way. The Wall Street Journal quoted CEO Jeff Bezos as saying in an as-yet unreleased letter that the auction service will allow users to "buy and sell virtually anything at Amazon.com -- rare books and signed first editions, rare music, vintage toys, antiques, sports memorabilia, and collectibles of all kinds."
In other words, it'll do exactly what eBay and a growing army of other auction sites do. The only difference, and it's a significant one, is that the service will be offered to an established customer base already running into the millions.
"How much auction can we stand?" wondered Tim Klein, an analyst with US Bancorp Piper Jaffray. At the same time, he pointed out that an online auction capability is now a necessary "commerce utility" for high-traffic Web sites, just like chat and email offerings. "People are coming to expect it," Klein said.
According to the Journal, Amazon already has signed up at least 117 companies that will flog goodies to bidders, and no doubt plenty more are in the wings. All this, needless to say, was a poke in the ribs for eBay (EBAY), which fell $6.72 to $147.78.
But Klein isn't sure that the people who purchase books and CDs at Amazon are the same ones that dicker over knickknacks at eBay. "Buying books and selling Beanie Babies are the not the same thing," he said. Although Net users eventually "might get auctioned out," Klein still thinks there's plenty of room for competing services.
More action on the IPO front: An outfit called Critical Path (CPTH), which provides email services for businesses, soared 174 percent to $65.88 on its first day of trading. The company debuted with 4.5 million shares initially priced at $24 a pop.
Anyone notice that the starting price for Internet stocks has just about doubled in recent months? It's nice at least that the companies themselves, and not the day traders, are getting a bigger piece of the pie. Net IPOs are way too risky for the average individual investor, in this column's humble opinion, but if anyone cashes in, it should be the people behind the enterprise, and not a bunch of hyperactive guys sitting in a darkened room throwing shares back and forth.
Speaking of which, ZiaSun Technologies (ZSUN) climbed 50 percent to $17.25 after issuing a press release declaring it plans "to provide an email service free to every Web site on the Internet," based on its PINmail system. ZiaSun, when not planning global conquest, runs a holding company for various Net-based firms.
What's to become of Microsoft (MSFT)? The jury's still out on that one, but traders are already guessing that a settlement in the company's antitrust trial isn't out of the question. That is, unless Redmond balks at an expected proposal that it relinquish control of its Windows operating system.
Microsoft's stock rose $3.13 to $92.19, lifted in part by a two-for-one split taking effect, and by confirmation that the company will reorganize into five major business divisions. "This new structure is part of the reinvention of Microsoft," its president, Steve Ballmer, said. They'll probably have to reinvent themselves a bit more to make regulators happy, though.
Computer makers were back in favor, not least because Goldman Sachs' Abby Joseph Cohen was quoted over the weekend as saying that International Business Machines (IBM) and Dell Computer (DELL) both look undervalued. While not everyone will agree with this assessment, it was sufficient to push IBM $5.19 higher to $177.56, and to drive Dell up $1.56 to $39.44.
Lucent Technologies (LU) climbed $7.94 to $110 as it landed a $1 billion order from AT&T to provide cellular-network gear. The equipment will be used to build out AT&T's rapidly growing wireless resources.
Lastly, Computer Literacy (CMPL), an established, dignified online retailer of technical manuals, surged 36 percent to $28.25 after changing its name to Fatbrain.com.
It took them six months to come up with that, by the way.
