Wall Street was sharply higher in mid-afternoon trading Monday as investors returned from the long holiday weekend and embraced the latest economic stats out of Washington.
A Labor Department report issued Friday, when the market was closed, showed that job growth in February was fairly low. While this might not be the best of news to those without work, it suggests that the US economy isn't set to boil over, and that the Fed thus will be less inclined to raise interest rates as a means of turning down the heat.
The Dow Jones Industrial Average gained 171.49 points to 10,004, and the Wired Index was 17.96 higher at 658.81. The Nasdaq Composite Index rose 53.23 to 2546.60, and the S&P 500 was up 22.98 at 1316.70.
While the overall market looks sunny, an icy wind is blowing through the software sector. A slew of profit warnings from mostly second-tier companies shows that the Y2K-related sales slump experienced by big guys like PeopleSoft and SAP has spread to more niche-oriented players.
"My thinking had been that you wouldn't see anything hit the smaller companies until the second half of the year," said Frank Sparacino, an analyst with Barrington Research. "Now it looks like things are going to be much worse for a lot of them."
Among the biggest losers was Aspect Development (ASDV), a maker of manufacturing-procurement applications, which tumbled 65 percent to US$7.81 after saying its first-quarter earnings will be "significantly" below estimates. The company's stock was promptly downgraded by several brokerages.
Axent Technologies (AXNT), a maker of computer-security programs, plunged 57 percent to $8.69 as it warned of an expected quarterly loss due to a slowdown in orders. Analysts had been looking for profit of 18 cents a share
Database-software developer Object Design (ODIS) fell 44 percent to $3.03, manufacturing-program maker Aspen Technology (AZPN) dropped 21 percent to $10.44, and mainframe-application provider Software AG Systems (AGS) shed 31 percent to $5.06 after each issued similarly glum forecasts. Infinium Software (INFM) was the only one of the pack to limit the damage, declining a relatively modest 19 cents to $4.19.
Corporate clients are refraining from big-ticket software purchases until safely past the Y2K threshold. While most software makers insist their products are now up to code to handle the glitch, few customers see much benefit in rolling the dice with just months to go until the moment of truth.
Netwise, electronic brokers received a shot in the arm after Credit Suisse First Boston said online trades surged as much as 35 percent in the first quarter. ETrade Group (EGRP) climbed 13 percent to $68.88, and Ameritrade (AMTD) was up 25 percent at $78. Charles Schwab (SCH) advanced $5.50 to $99.75.
People aren't just trading online -- they're banking there as well. Net.B@nk (NTBK) rose 24 percent to $94.25 as it announced that a record 8,000 new accounts were opened in the first quarter, bringing the electronic institution's total number of customers to almost 25,000.
Of course, it's tough to walk away with free pens and stuff when you bank on the Net, but you do get better deposit rates and free checking because of the low overhead.
