As expected, the Dow Jones Industrial Average quickly turned tail and fled Tuesday after its first-ever close above the 10,000 level.
This was due in part to winded investors pausing to catch their breath, as market watchers like to say, and to Dow component Coca-Cola taking much of the fizz out of Wall Street's bubbly enthusiasm.
Traders also are playing it safe as Greenspan & Co. meet to discuss the economy, inflation, interest rates, and other such minor matters. Hardly anyone thinks a rate hike is in the works, but you never know.
The Dow fell 40.79 points to 9965.99 in mid-afternoon trading, and the Wired Index was 6.13 higher at 641.29. The Nasdaq Composite Index rose 10.31 to 2503.15, and the S&P 500 was down 1.69 at 1308.48.
"The market always pulls back in situations like this," said Ulric Weil, an analyst with Friedman, Billings, Ramsey. "When we had Coke's announcement after the close on Monday, it was obvious the market would go down."
Coke (KO) graciously waited until the blue-chip index had logged its milestone five-digit finish before warning that worldwide sales may decline as much as 2 percent in the first quarter, due mostly to weak demand in Europe and Latin America. Goldman Sachs promptly cut Coke from its recommended list, and the company's stock shed US$2.13 to $62.69.
Would the Dow have remained atop 10K if Coke had revealed its bad tidings earlier in the day? Probably not.
Tech shares, meanwhile, remain on the march. America Online (AOL) paced the pack, advancing $13.50 to $145.88 as it detailed its burgeoning e-commerce alliance with Sun Microsystems (SUNW). Now that AOL's acquisition of Netscape Communications is complete, it will join Sun in developing software that will help other companies sell their wares online.
New products will include applications for messaging and email, and for online billing. They're slated to start shipping early next year, and will almost surely, and not coincidentally, steer as much business as possible in the direction of both Sun and AOL. Sun's shares were up $1.25 at $125.75 on the news.
For its part, Amazon.com (AMZN) jumped $12.50 to $162.13 as it took the wraps off a new auction service. Pacific Crest Securities raised its rating for the company's stock to "strong buy" from "buy," and observed that Amazon is on track to resemble a "Wal-Mart of the Web in less than 10 years." Analyst Steve Weinstein predicted that Amazon's share price could rise as much as 800 percent in that time.
Who knows? The company might even turn a profit as well.
EBay (EBAY) didn't take the unveiling of Amazon's auction channel very well. The online auction leader slid $5.66 to $142.13 as investors wondered how it will respond to the growing number of rivals fighting for a piece of the action.
AboveNet Communications (ABOV), meanwhile, surged 32 percent to $107 after announcing a two-for-one stock split. The company, which provides Internet connectivity for e-commerce outfits, said the split will affect all shareholders of record as of 14 April. AboveNet went public last December at an initial price of $13 a share.
