Wall Street's first-quarter roller coaster ride, mostly driven by the volatility of technology stocks, left the Dow Jones Industrial Average steaming downward at the close of the quarter, while the TWICE Index of consumer electronics stocks finished the three months ahead, albeit on a similar downward path.
Investors breathed a sigh at the end of a quarter marked by wild swings and widespread shedding of tech stocks. Techs ruled until the end of the quarter, when much of the money taken off the tech table moved to the Dow and into other stocks where there is perceived value, including the retail sector.
After the quarter-long punishment, however, the Dow was not able to make it into positive territory and ended down 575.2 points, to close at 10921.9, a 5% decline.
In contrast, the TWICE Index added 417.4 points to its totals and ended at 8454.60, up 5.2%. Of the stocks tracked in the TWICE Index, advancing issues edged past declining issues 45 to 40.
The retail sector was the most active, and superstores led the pack.
Shares of Best Buy soared in the quarter, increasing 71.1% and closing at $86. The company announced a 51% jump in its fourth-quarter profits, hitting a record $163.8 million, compared to $108.8 million for the same period in 1999.
Digital equipment was a significant contributor to Best Buy's success. "The digital era will provide the company with significant growth opportunities," said president/CEO Richard Schulze. "The expectations we set at the beginning of the year were surpassed quarter on quarter, as we capitalized on consumers' migration to digital technology."
Circuit City also benefited from money heading into the retail sector, gaining 35.09%, in part due to the success of Netpliance's Internet computer. Circuit City is Netpliance's sole retailer, and sales skyrocketed after a few modifications were posted on a website in March to explain how the $199 Netpliance product could be transformed into a fully functional computer.
The company said its fourth-quarter results will surpass analysts' estimates for earnings. "Given the strong sales trends throughout the quarter, we expect that the earnings per share from our Circuit City business will increase," said chairman/CEO Richard Sharp. Circuit City ended at $60.88.
On the other end of the retail performance spectrum, shares of Costco fell 42.4% , closing at $52.56. The drop comes despite a same-store sales increase of 14% in Costco's second fiscal quarter, after a 10% increase in the same quarter a year ago.
Costco also said that revenues increased across the board. For the second fiscal quarter, net income gained 19%, to $181.6 million, compared to $152 million in the same quarter last year. The quarter's results were in line with analysts' expectations.
Office Max rose 19.5% during the quarter, ending at $6.50. The company's fourth-quarter profit came in line with analysts' expectations but substantially ahead of the quarter's net loss last year. Sales for the quarter jumped to a record $1.39 billion, versus $1.25 billion earned in the same quarter a year ago.