An Internet share offering went through the roof again Wednesday. So what else is new?
Otherwise, Wall Street put in a mixed performance as traders mulled corporate earnings prospects on the far side of the holiday consumption-fest. President Clinton's little situation caused a small measure of anxiety -- is Henry Hyde the Anti-Greenspan? -- and there was some worry as well about Brazil dropping the ball in its economic-recovery efforts.
Additionally, the Fed's so-called Beige Book showed that the US economy looked relatively strong in November, making another cut in interest rates less likely when the central bank holds its final meeting of the year on 22 December.
A solid showing by tech stocks helped the Wired Index rise 1.19 points to close at a record 481.45, while the Dow Jones Industrial Average ended 18.79 lower at 9009.19. The Nasdaq Composite also set a record, gaining 16.57 to 2050.42, and the S&P 500 was up 2.11 at 1183.49.
Online community builder Xoom.com (XMCM) came roaring out of the gate on its first day of trading. Four million shares debuted at an initial price of US$14 apiece. To absolutely no one's surprise, the stock promptly caught fire as institutional heavyweights and nimble-fingered day traders began buying in (and quickly cashing out) to score some easy money.
By the closing bell, Xoom had soared $20.44, or 146 percent, to $34.44. This gives the company, which lost almost $7 million over the first nine months of the year, a market value of $450.6 million.
Paul Merenbloom, an analyst at Prudential Securities, had no trouble putting a finger on investor sentiment: "If it ends in .com, it must be cool."
For those who missed the party, not to fret. Other Net-related IPOs on the horizon include content aggregator Infospace.com, service provider Internet America, connectivity specialist AboveNet Communications and healthcare-transaction processor Claimsnet.com. That's two outfits with a .com in their name, and two with "Internet" or "Net." In case anyone gets confused.
Among the old guard, Lycos (LCOS) advanced $3.38 to $61.25 after becoming the first portal to also become an e-tailer in its own right. The company's Lycos Store is attempting to break the usual mold by offering goodies directly to consumers, as opposed to steering shoppers to a partner's site and scraping a commission off any sale. Lycos is currently in the process of acquiring Wired News.
"I don't think they're just rolling the dice," Merenbloom said. "They're looking at a new opportunity to generate traffic for their network. The question is how adept they'll be at sales."
If Lycos pulls it off, expect just about every other portal player to get in on the action. In real-world terms, what we're seeing is department stores being added to the Web's ubiquitous cyber-malls.
Also from the e-commerce front, Amazon.com (AMZN) surged $12.19 to $216.25 after taking the wraps off a new online shopping service. America Online (AOL) was up $2.38 at $92.75 on news that Bell Atlantic and GTE will pony up about $31 million to have their phone directories featured on AOL's service.
Broadcast.com (BCST) climbed $15, or 27 percent, to $69.75 after inking a pact with the Nasdaq exchange to provide listed companies with an online forum for quarterly earnings conference calls. Meanwhile, ETrade Group (EGRP) rose 81 cents to $27.44 as it began offering bond trading at its Web site.
Some heavy-duty merger activity from the Old Country: Britain's Zeneca Group (ZEN) said it will link up with Sweden's Astra AB (A) in a $35 billion deal that would create a new European pharmaceutical giant. Investors weren't so sure. Zeneca inched just 19 cents higher to $45.19, and Astra was down $1.06 at $20.81.
Similarly, Cadence Design Systems (CDN) slid 81 cents to $29.19 after announcing its acquisition of Quickturn Design Systems (QKTN) for $253 million in stock. But Quickturn, which fought off a hostile takeover attempt by Mentor Graphics, advanced $1.63 to $13.81.
Elsewhere in tech, Dell Computer (DELL) gained $1.50 to $68.13, while Intel (INTC) was down 88 cents at $119.19. Microsoft (MSFT) advanced $2.44 to $133.63, and Cisco Systems (CSCO) ended 94 cents higher at $80.75.
In telecom, AT&T (T) rose another $4 to $71 following word that it will buy the global communications network of International Business Machines (IBM) for $5 billion. The deal includes AT&T and Big Blue turning to one another for a variety of services. IBM was $1.25 higher at $169.44.
Lucent Technologies (LU) gained 38 cents to $99.38 as it landed $90 million worth of networking contracts in Europe and Asia. The new business will take Lucent to the Netherlands, Spain, South Korea, and China.
Among financials, JP Morgan (JPM) fell $2.38 to $104.19 after saying its fourth-quarter earnings will be about half the $1.03 a share expected by analysts. America's fourth-largest bank blamed "weak results in proprietary activities" for the setback.
On the other hand, Wal-Mart Stores (WMT) is doing just fine in the proprietary activities department, rising 88 cents to $76.75 on word that it is expanding in Europe. The world's largest retailer is purchasing 74 stores from Germany's Spar Handels AG for an undisclosed price -- a move expected to double Wal-Mart's annual revenue in the country to about $3 billion.
Finally, Israeli lingerie maker Tefron (TFR) plunged $4.63, or 40 percent, to $7 as Credit Suisse First Boston downgraded the company's stock to "hold" from "buy." Earlier, Tefron warned that its fourth-quarter earnings won't meet analysts' expectations of 27 cents a share. It said lax quality control had resulted in "nonconforming garments" being shipped to a customer.
Nonconforming lingerie? Sounds intriguing.
