The markets climbed out of bed on the right side of a relief rally today,
sparked by news of soft April CPI numbers, showing a 0.2% increase. That
was in-line with consensus views, but then came the real circus sideshow in
late-afternoon trade. The Federal Reserve edged interest rates by a half
point, something traders had already factored into the market. It was the
post-game comments that left fence-sitters undecided.
The markets read the statements to mean the Fed remained on inflation
watch, with a bias toward additional rate increases. For the remainder of
the trading day, investors digested the news and started factoring in
further tightening by the Fed.
Blue chips ebbed and flowed around the Fed move but held onto strong gains
that saw Dow 11k within a stone’s throw, rocketing 126.79 to 10,934.57.
Tech stocks had some giddy-up as the Nasdaq rolled 109.92 to 3,717.57.
Nothing like a little news of a Saudi prince investing a billion dollars
into beaten down tech stocks to send the sector higher. Alwaleed bin Talal
announced a basket of bargain Internets in his portfolio, and shares in
those companies took off sending the ISDEX up 4.08% on the day.
E-tailing giant Amazon.com leapt 3 to 59-1/16.
Investors bid online auctioneer eBay higher by
7-3/8 to 134-7/8, while InfoSpace rallied 2 to
60. DoubleClick moved into positive territory,
up 5-1/16 to 59-13/16, while B2B incubator Internet Capital Group
soared 5-7/16 to 35-9/16.
Abby Joseph Cohen spent most of the morning cheerleading tech stocks with
bullish comments. The Goldman Sach’s investment committee co-chairwoman
said she sees continued gains through the remainder of the year but more
grounded to reality.
Lycos smartly sealed a $12.5 billion merger deal
with Spanish ISP Terra Networks after the bell.
The price looked right for the portal firm, and investors cheered news of
the deal. The combined concern would create the fourth largest Web company
in the world. Shares roared to levels not seen since earlier this year, up
11 to 72-5/8. In after-hours, Lycos shares continued to inch forward, up 7/8.
Shares of Corel tacked on 19/32 to 6, following
news of the Linux issue’s scrapped plans to merge with Inprise
. Corel shares have taken a bath in the months since the
deal was first announced, shredding the offering price by more than a
billion dollars. Despite facing nearly $30 million in termination fees,
both companies split amicably to avoid the charges.
Commerce One tacked on 2-5/8 to 49-1/4, after
the B2B company announced a joint venture with QAD . The alliance will offer access and integration to mid-market
and multinational manufacturers in QAD’s target markets using Commerce
One’s e-procurement applications.
Shares of Critical Path received a boost,
jumping 7-15/16 to 46-15/16, after Donaldson, Lufkin & Jenrette initiated
coverage on the e-postmaster general with a “buy” rating and a $70 target
price.
