Stock Watch – Investors Take Breather
Posted: 07/2000
Investors Take Breather
Light volume characterized the market at the end of our session as investors waited on the sidelines until after the Federal Reserve’s policy meeting, with techs and other stocks battered despite some positive earnings reports. But stocks rebounded on the last day of our session (May 15) with Wall Street indicating that the Fed’s anticipated rate hike of 50 basis points already is discounted. The rally, led by banks and the tobacco industry, pushed the market ahead, although activity was sluggish. “I think that there are some investors who continue to see good values out there,” said George Rodriguez, senior vice president at Guzman & Co.
(www.guzman.com). “There’s the thought that even if the Fed comes in with a half percentage point hike, the market is already trading with that built in.”
The Dow Jones Industrial Average climbed 405.83 points, or 3.90 percent, and ended at 10807.78. The PHONE+ Stock Index also rebounded, adding 86.99 points, or 1.93 percent, and ending at 4602.37. Advancing issues overpowered declining issues 80 to 62.
Shares of Metromedia Fiber Network Inc.
(www.mmfn.com) charged ahead after the company reported a smaller loss in its first quarter than expected. Metromedia lost $85.2 million, or $0.16 per share, against a net loss of $5.8 million, or $0.02 per share. This compares with a loss of $0.25 per share anticipated by analysts that were surveyed by First Call/Thomson Financial
(www.firstcall.com). Metromedia cited costs associated with the acquisition of AboveNet Communications Inc.
(www.above.net) to accounting changes, and to the costs of additional debt. Metromedia increased 7.50 points, or 30.61 percent, and closed at $32. The company was our top percentage gainer.
Powertel Inc.
(www.powertel.com) powered forward after the company reported a narrowing of its net loss. The company announced a net loss after preferred dividends of $52.9 million, or $1.74 per share, compared with a net loss of $63.8 million, or $2.33 per share in the previous year’s quarter. Powertel President and CEO Allen Smith said, “Not only did Powertel become one of the first PCS carriers to achieve positive operating cash flow, but we did it while adding a record number of net new PCS subscribers in the quarter.” Powertel added 8.84 points, or 15.16 percent, and closed at $67.19. The company was our top dollar gainer.
Shares of RCN Corp.
(www.rcn.com) tumbled after the company’s first-quarter loss nearly doubled. RCN’s net loss reached $138.1 million, or $1.95 per share, vs. $67.8 million, or $1.03 per share, earned in the same quarter a year ago. Analysts surveyed by First Call/Thomson Financial expected RCN to lose $2.15 per share. Although the company’s revenues increased, the company spent more to increase its fiber optic network. RCN lost 15.44 points, or 38.18 percent, and ended the month at $25. The company was our top dollar loser.
