MARKET TAKES ONE LUMP OR TWO

The market celebrated the week of the 12th anniversary of Black Monday (the Dow Jones Industrial Average fell 508 points) by taking a ride through Ups and Downs.

While pundits alternated reports carrying headlies, sorry, that’s headlines, like “No October bust this time” with ones warning “Dow 3600,” investors behaved like ticklish 2-year-olds, leaping in any direction at the slightest news, good or bad.

International Business Machines Corp.’s declaration that customers’ Y2K fears were likely to depress its fourth-quarter earnings was a solar plexus shot that sent the Dow down more than 200 points for a while just a day after it had climbed more than 187, buoyed by the addition of World Wrestling Federation Entertainment Inc. to Nasdaq and Martha Stewart Omnimedia Inc. to the Big Board.

Stock in Martha and her modestly named organization, by the way, politely decorated the rasslers in doilies, almost doubling its $18 opening price in first-day trading while the grunt-and-groaners could manage only a 49% opening-day gain. What investors get in either isn’t very much. Founders of both organizations, the eponymous Ms. Stewart and Vince McMahon, will each control more than 95% of the stock.

It just goes to show that even in the cut-throat world of Wall Street, manners have meaning. Or that maybe everybody should have been in home-ec class rather than the gym.

Macro mix-up

* Of course, the week’s macroeconomic news was about as mixed as a sportswriter’s metaphors.

The Consumer Price Index was up 0.4% in September, the year’s second-biggest climb, but the trade gap narrowed in August from July’s all-time high. The trade number is the third-worst yet, but an improvement nonetheless. Unemployment claims were up by 9,000, too, easing inflation fears.

The worst part of the consumer news was tobacco prices, which leapt a smokin’ 6.5%. Booze prices apparently remained stable.

The good news for people is that the September gain means Social Security checks go up 2.4% next year. The bad news for the economy is that the hike won’t help inflation. Why, the average Social Security recipient will haul down $804 monthly. That’s about 40 bucks less than Citigroup’s Sanford I. Weill earns in a minute.

Europeans aren’t up in arms about inflation. The European Central Bank left its equivalent of the discount rate at 2.5% for its 11 member nations, mirroring the Bank of England’s rate inaction earlier in the week.

Blame the techies

* Back home, Charles Schwab Corp.’s computers are acting like rambunctious teenagers tired of school, and it’s only October. The biggest discount broker was off line for almost 2? hours Wednesday when the computer slept in. After-hours trading, from 4: 30 to 7: 30 p.m. Eastern time, began the same day. It was the first time since the end of August the system had acted up, but this time there were apparently enough humans around to answer the phones when frustrated clients called to make trades. The web woes continued Thursday and Friday mornings, too.

A Bogle blast

* The far-from-retiring-but-about-to-retire John C. Bogle, Vanguard Group’s senior chairman until Jan. 1, took the mutual fund business to task once again in a speech before the New York Society of Securities Analysts. He said the industry, which now owns 35% of corporate stocks, looks out for itself rather than its shareholders and is fearful of getting the goat of corporate managers who give – or withhold – billions in pension fund money to money managers.

He also had kind words for Vanguard’s biggest competitor in the cheapness contest, TIAA-Cref. The $268 billion pension and mutual fund manager, he said, uses its clout to make corporate managers toe the line.

The Investment Company Institute, the mutual fund industry’s lobby, should do more, Mr. Bogle said. Bet he’s already told that to John Brennan, his successor on Vanguard’s quarterdeck. Mr. Brennan is ICI’s president.