Oh, to hell with the president. Let's buy stocks.
After five days of declines, Wall Street rebounded Tuesday as investors overcame their apprehension about Bill Clinton's political demise and seized the opportunity to snatch up a few bargains. Internet shares were at the top of everyone's shopping list as the latest in a series of new Net offerings went through the roof.
The Wired Index rose 11.47 points to close at 464.05, and the Dow Jones Industrial Average gained 127.70 to 8823.30. The Nasdaq Composite Index jumped 45.41 to 2012.33, and the S&P 500 was up 21.60 at 1162.80.
Although Caterpillar (CAT) rattled investors' nerves at the outset with a warning that its fourth-quarter earnings will be way short of expectations, General Electric (GE) balanced things out with assurances that it still expects to come through with an anticipated 1999 profit of US$3.19 a diluted share, up 14 percent from its estimated 1998 earnings of $2.80.
Another positive sign came from the Labor Department, which reported that the consumer price index rose 0.2 percent in November, fully in line with economists' predictions. In other words, inflation remains well under control.
But perhaps the single biggest contributor to the rally was a brief, soothing respite from the cockfight in Washington. As Clinton returns from abroad to face the music and members of Congress jockey for position in the mud, investors took advantage of the no-news-is-good-news interval to conduct a little business.
"The bargain hunters know there's nothing about the impeachment process being debated today," said Les Childress, president of Childress Investment Research. "It's safe to start buying."
Much of that buying centered on InfoSpace.com (INSP), a provider of directories and stock quotes for other sites, which debuted on the market with 5 million shares initially priced at $15 apiece. By the closing bell, the stock had soared $5, or 33 percent, to $20. Why does this come as no surprise?
"Internet stocks decoupled from the market a long time ago," Childress said. "If any group of stocks is going to go up, it's them."
Sure enough, America Online (AOL) advanced $3.56 to $92.81 on word that it has formed a joint venture with Cisneros Group, a South American media conglomerate, to develop Net services for the region. Brazil, Mexico, and Argentina will be the first markets targeted by the venture.
Infoseek (SEEK) jumped $6.31, or 15 percent, to $47.50 after Merrill Lynch upgraded the company's shares to near-term "accumulate" from "neutral." Analyst Jonathan Cohen took a look at the Go Network, Infoseek's newly unveiled online partnership with Disney, and liked what he saw. He said the portal "could represent a legitimate rival to larger search and navigation companies."
Not that those companies appear fazed by the new kid on the block. Yahoo (YHOO) rose $6.75 to $198, and Excite (XCIT) was $1.44 higher at $50.50. Meanwhile, Amazon.com (AMZN) vaulted $20.50 to a record $242.75, and Network Solutions (NSOL) climbed $8.56 to $115.56 after inking a pact with Yahoo to extend the reach of its domain-name registration service.
In tech, Sun Microsystems (SUNW) advanced $3.88 to $80.13 as it announced a tie-up with Japan's Matsushita Electric Industrial -- maker of National and Panasonic goodies -- to develop Java-based software for digital appliances. The idea is to network all the gadgets in a wired home so that, in essence, your PC can toast your bagel.
Other top tech shares were stronger. Dell Computer (DELL) rose 81 cents to $65.56, and IBM (IBM) was $2.31 higher at $165.19. Intel (INTC) gained $4.19 to $115.75, and Cisco Systems (CSCO) was up $3.38 at $83.75.
Investors gave a warm reception to reports that MCI WorldCom (WCOM) is in talks with Electronic Data Systems (EDS) to form a joint venture providing voice and data services to global business customers. MCI gained $1.19 to $63.38, and EDS was up $1.88 at $45.
In finance, Citigroup (C) advanced $2.69 to $48.75 after announcing it will cut 10,600 jobs and take a $900 million restructuring charge to cut costs. More than a third of the layoffs will involve the company's US operations.
Since a whole lot of people are going to have more time on their hands, it's no wonder that MovieFone (MOFN) is predicting that usage of its telephone and online ticketing service looks to be 30 percent higher this year. The company's stock surged $1.94, or 16 percent, to $13.75 as it expanded its relationship with leading theater owners.
Lastly, Burlington Coat Factory (BCF) shed 81 cents to $13.13 after revealing that hundreds of winter parkas sold by its stores were trimmed with dog fur from China. The company, which is recalling the garments, said it had been tricked by an Asian vendor and that it thought the coats actually contained coyote fur.
Honest mistake.
