Wall Street was mixed Friday as profit warnings continued to weigh heavily on Blue Chips, while some upbeat earnings reports from the tech side renewed interest in computer-related stocks. Internet shares received a boost from a report confirming that, yes, unprecedented numbers are shopping online this holiday season.
Meanwhile, discount broker Charles Schwab rattled its e-customers by making some new share offerings off-limits to online trades. The company said it's responding to the dizzying volatility in IPO prices, especially among high-flying Internet companies.
The Wired Index rose 2.33 points to close at 472.21, while the Dow Jones Industrial Average was 25.23 lower at 8816.35. The Nasdaq Composite Index gained 13.35 to 2029.31, and the S&P 500 was up 1.41 at 1166.43.
Schwab's online customers were startled late Thursday when they received a message informing them that the day's IPOs -- Infinity Broadcasting, Internet America, and AboveNet Communications -- had been placed on a no-trade list. Moreover, next week's expected Infospace offering is a no-no as well for Net traders.
Scott Appleby, an analyst at ABN AMRO, was surprised that Schwab would curtail online trading in IPOs just because prices might differ between time of order and time of the actual purchase or sale. "Why aren't they just educating people about how the system works?" he asked.
Dan Hubbard, a Schwab spokesman, replied that this is exactly what the company is doing, but it wants to do so on an individual basis. Customers still are free to trade in most IPOs, he said, but they'll have to do it either in person or by telephone, so a Schwab representative can patiently explain all this monkey business about price discrepancies.
"This enables our customers to understand these types of orders, how they work," Hubbard insisted. "By and large, the feedback we've had is that customers appreciate this."
Seems like Schwab (SCH) has become the America Online of the financial world. At least investors in the brokerage itself think the move a positive development. Schwab's stock advanced US$2.75 to $59.06.
In tech, Oracle (ORCL) rose $2.31 to $37.25 after topping analysts' expectations with a 46-percent increase in net income. The world's biggest database software developer reported quarterly profit of 28 cents a diluted share, 4 cents higher than the Street's consensus estimate.
National Semiconductor (NSM) gained 75 cents to $15.38 with its own earnings announcement, although the positive news here was that the company's loss was smaller than anticipated. The chipmaker said its loss in the latest quarter amounted to 29 cents a diluted share, not including the usual charges that throw off the curve. Analysts had been expecting a setback of 49 cents.
High hopes for the semiconductor business drove industry leader Intel (INTC) up $1.81 to $116.44. Dell Computer (DELL) slipped 13 cents to $67.19, while International Business Machines (IBM) was $2.50 higher at $167.50.
On the Internet front, a new survey by Marketing Corp. of America -- now there's a bunch of guys who sound unbiased -- reveals that about 10 percent of respondents said they made online purchases in the week after Thanksgiving. Stack that up against the mere 1 percent who said as much a year ago, and it's clear the rosy forecasts for e-commerce appear to be panning out.
Not surprisingly, then, Amazon.com (AMZN) rose $9.88 to $223, and eBay (EBAY) was up $5.88 at $192. AOL (AOL) advanced $1.69 to $91.69, and Yahoo (YHOO) was $2.94 higher at $195.69.
Thursday's trio of new share offerings were mixed on their second day out of the gate. Internet America (GEEK) was unchanged at $14.88, while AboveNet (ABOV) fell $2.44, or 15 percent, to $14.31. Infinity (INF) was 19 cents higher at $23.25.
Coca-Cola (KO) fell $3.25 to $62.81 after warning that its fourth-quarter earnings won't make the grade, becoming the latest Blue Chip to dump cold water on analysts' expectations. The announcement followed news that Coke will spend almost $2 billion to acquire Cadbury Schweppes' soft drink brands, but only outside the US market. Do they drink Dr. Pepper in Bangladesh?
In telecom, Ciena (CIEN) declined $1.75, or 10 percent, to $15.63 after warning that increased spending will limit profitability in the first half of next year. And wireless management-systems designer Telxon (TLXN) plunged $12.25, or 45 percent, to $15.00 as it "restated" its fiscal second-quarter performance to show a loss instead of profit in light of some accounting changes.
MCI WorldCom (WCOM) confirmed reports that the company will place pink slips in the Christmas stockings of about 2,000 workers as part of plans to trim some $2.5 billion in overhead. Investors applauded the move, sending MCI's stock up $1.63 to $64.38.
Lastly, Microsoft (MSFT) climbed $2.44 to $134 on reports that it is looking to invest millions in nearly a dozen Silicon Valley venture capital outfits. Such a move, naturally, would give Gates & Co. the inside track on emerging technologies, which, if you're a Microsoft shareholder is a very good thing. If you're not, well ...
