Street sees mixed day of trading
Wall Street rallies early in the wake of a megamerger, but interest rate concerns eventually knock some of the kick out of the bulls.
After charging more than 134 points, the Dow Jones Industrial Average ended up a modest 36 points, at 9091.52. The Nasdaq, which gained more than 13 points early on, ended the day off more than 16 points, at 1848.07.
Enthusiasm around the $62 billion buyout of Ameritech by SBC Communications, pushed shares of big-name computer makers into new ground, but later in the day, investors started looking past the merger and toward upcoming economic indicators to be announced later this week.
For example, inflation data is due this week with the Producer Price Index for April on being released on Wednesday and the Consumer Price Index due to come out on Thursday.
Despite the late-day retreat, Dell Computer, IBM, and Hewlett-Packard all touched all-time highs in late trading, amid gains in many bellwether issues.
Dell closed at 90.38, after climbing as high as 94.94 earlier. IBM ended 119.31, after reaching 122.75. Hewlett-Packard finished the day at 76.69. Earlier, it touched a high of 78.5.
Salomon Smith Barney analyst John Jones raised target prices on server and enterprise hardware computer companies amid strong fundamentals.
In a research note, Jones said that, despite weakness in Asia, the group "is finally experiencing a [price to earnings multiple] expansion..."
He raised Hewlett-Packard's target price to a range of $87 to $95 per share, adding that HP had "the strongest fundamentals of the group."
Jones also raised IBM's target price to $148 to 153 a share, from $145 a share.
Jabil Circuit and HP said today that they have signed a memorandum of understanding for Jabil to buy the manufacturing assets of HP's LaserJet Solutions Group Formatter Manufacturing Organization. Jabil said in a statement that it will acquire the printed-circuit assembly assets of the operations in Boise, Idaho, and Bergamo, Italy, and offer employment to the 600 employees of those operations.
The transaction is intended to close by August 31, Jabil said.
As for Dell, the company entered agreements today under which it named global service partners for its computer business. Those partners include Unisys and Wang Global. Under the three-way agreement, Dell will use Unisys and Wang to handle systems management, network design and security, and other corporate computing services for the company's global customers.
Reuters contributed to this report.