February 11, 2000

Fed move doesn’t slow techs; county stock index off a notch

In a widely expected move, the Federal Reserve hiked interest rates a quarter point following the two-day meeting of the Federal Open Market Committee, and indicated that rates might be raised in the future if the economy remains hot. Although the Dow Jones Industrial Average fell on the news, the technology sector looked the other way and moved higher. The financial sector, always sensitive to interest rates hikes, also faltered. Wall Street, however, expressed confidence that tech companies will continue to grow. “The Fed only raising rates by a quarter of a percentage point and saying inflation needs to be watched lead to uncertainty about how much they will raise rates in the future,´ said Brean Murray & Co. senior equity trader Peter Coolidge. “What the market doesn’t like is uncertainty. The Nasdaq, however, seems to be shrugging off that concern.” The Dow slipped to 11003.20, a loss of 486.16 points, or 4.23 percent on our trading session that ended Feb. 2. The Boulder County Business Stock Index also stumbled, decreasing 47.21 points, or 1 percent, and ending at 4653.66. Declining issues edged past advancing issues 38 to 32.
News that Sony Corp. intends to sell electronic goods directly to consumers on its Web site boosted the company’s stock this month by 36.04 points, or 15.11 percent. The change will mark the first time a Japanese company has used the Internet to sell its products directly to the public. A new firm funded by Sony and Sony Marketing (Japan) will accept orders and be involved in product development and inventory management. The company estimates that after two years or so, Sony’s Internet sales will exceed $95.2 million. Sony ended at $259.44, and was our top dollar gainer.
Although Amgen reported an 18 percent gain in earnings for the fourth quarter due to its strong anemia and cancer drugs, the company’s warning that sales could slow this year sent its stock for a tumble, and it lost 8.31 points, or 11.55 percent, to close out the month at $63.69. The company said drug wholesalers stockpiled ahead of Y2K, and that spending will increase in research and development. Earnings for the quarter rose to $282 million, or 26 cents per share, up from $239 million, or 22 cents per share last year. Analysts surveyed by First Call/Thomson Financial had predicted earnings of 25 cents per share.
Despite announcing fourth-quarter earnings that substantially eclipsed Wall Street estimates, shares of Ball Corp. fell by 6.38 points, or 15.29 percent this session. Ball said that fourth-quarter net income came in at $18.8 million, or 59 cents per share, vs. a loss of $18.6 million or 61 cents per share in the year-ago quarter. Consensus average from analysts polled by First Call/Thomson Financial was 54 cents per share.
The company said that sales fell due to fewer shipping days than the same quarter last year, but expenses were down due to reorganization and lower interest payments on debt. Ball closed at $41.69.

In a widely expected move, the Federal Reserve hiked interest rates a quarter point following the two-day meeting of the Federal Open Market Committee, and indicated that rates might be raised in the future if the economy remains hot. Although the Dow Jones Industrial Average fell on the news, the technology sector looked the other way and moved higher. The financial sector, always sensitive to interest rates hikes, also faltered. Wall Street, however, expressed confidence that tech companies will continue to grow. “The Fed only raising rates by a quarter of a percentage point and saying inflation needs to be…

Categories:
Sign up for BizWest Daily Alerts