RJR Nabisco Sets Terms of Tobacco Spinoff

RJR Nabisco's (RN Quote) board approved the company's plan to spin off its domestic tobacco business, declaring a 1-for-3 stock dividend of shares in R.J. Reynolds Tobacco Holdings to RJR Nabisco shareholders. RJR Nabisco will continue to exist as a holding company, owning about 80.5% of Nabisco Holdings (NA Quote), and will be renamed Nabisco Group Holdings. It will trade on the New York Stock Exchange under the symbol NGH.

Major Indices INDEX CHANGE % VALUE YR TO DATE Dow 25.78 -0.23% 11,000.37 +19.8% S&P 500 8.39 +0.62% 1364.00 +11% Nasdaq 39.9 +1.55% 2606.54 +18.9% Russell 2000 2.45 +0.55% 449.26 +6.5% TSC Internet 2.82 +0.43% 656.91 +61.6% TREASURY BOND CHANGE VALUE YIELD 30-Year 91 28/32 3/32 5.829%

Gold Intrigue Deepens, Perhaps

Rumors percolated through the zany, nutty, madcap gold market this evening about some "announcement" out of Europe tomorrow that could boost the flagging metal.

"Late in the day today I received a phone call from London saying that a bombshell is coming out in the London financial press in the morning," Bill Murphy, chairman of the Gold Antitrust Action Committee, wrote in an email this evening to members of his Web site, www.lemetropolecafe.com. "The essence of what I was told is that GATA is right on target in its allegations and that will become very clear tomorrow." Murphy told his members he understands a large Wall Street firm will be reported to hold a major short position in gold.

Reached by phone, Murphy said "respectable" sources in the gold community in both London and Toronto told him officials at the Bank for International Settlements "were shocked to hear the extent of the carry trade" in gold and will make some pronouncement regarding the issue tomorrow. He declined to reveal his sources. (TheStreet.com ran a story last week on GATA and its charges of manipulation in the gold market.)

Independent of Murphy, Ronny Kraft, CEO of Gotham Capital Management, reported hearing similar rumors and was buying gold stocks today in anticipation of a bump tomorrow.

The BIS headquarters in Basel, Switzerland, was closed.

TheStreet.com was unable to confirm any allegations. Gold stocks and the metal itself fell today, suggesting most market players aren't expecting any good news. The Philadelphia Stock Exchange Gold & Silver Index fell 2.2% while the price of gold fell 90 cents to $277.90 the ounce.

One possibility could be the unwinding of a derivative contract tied to gold, theorized Philip Klapwijk, managing director at London's Gold Fields Mineral Services, whose regular reports on the gold market are widely read.

"The Russians sent quite a lot of bullion to the West last year," Klapwijk said. "With Russian export regulations having [been] changed, maybe a commercial counterparty couldn't make delivery.

"But if a commercial bank defaulted on a swap with a London bank, I would doubt at this stage it would be of sufficient scale to warrant huge concern," he continued, reiterating he's heard nothing of this sort is in the works. "It's a business risk which you have all the time in that part of the world."

-- Aaron L. Task

In other postclose news (earnings estimates from First Call; earnings reported on a diluted basis unless otherwise specified):

Earnings/revenue reports and previews

Citizens Utilities (CZN Quote) announced first-quarter net earnings of 21 cents a share, including unspecified gains and charges. The three-analyst estimate called for operating earnings of 5 cents vs. the year-earlier 11 cents.

Coinmach Laundry (WDRY Quote) recorded a fourth-quarter loss of 19 cents a share, narrower than both the two-analyst forecast of a 21-cent loss and the year-ago loss of 25 cents.

ConAgra (CAG Quote) said it plans to take $810 million in restructuring charges in the next three years after cutting 7,000 jobs or 9% of its workforce. The company has dubbed the restructuring plan "Operation Overdrive."

En Pointe Technologies (ENPT Quote) recorded a second-quarter loss of 76 cents a share, wider than the single-analyst prediction of a loss of 40 cents and below the year-ago profit of 4 cents.

Fairchild (FA Quote) posted third-quarter earnings of 23 cents a share, 1 cent above the three-analyst view and ahead of the year-ago 9 cents.

Gemstar (GMST Quote) reported fourth-quarter earnings of 46 cents a share, 2 cents higher than the five-analyst prediction and above the year-ago 37 cents.

Mid Atlantic Medical (MME Quote) reported first-quarter earnings of 14 cents a share, on target with the 10-analyst view and a repeat of the year-ago figure.

Star Telecomm (STRX Quote) recorded first-quarter earnings of 2 cents a share, in line with the 11-analyst estimate but short of the year-ago 3 cents.

Teligent (TGNT Quote) reported a first-quarter loss of $2.05 a share, narrower than the eight-analyst forecast for a loss of $2.21 but wider than the year-ago loss of 73 cents.

Trans World Entertainment (TWMC Quote) reported first-quarter earnings of 12 cents a share, a penny above the four-analyst outlook and higher than the year-ago 4 cents.

Trinity Industries (TRN Quote) posted fourth-quarter earnings of 96 cents a share, 4 cents higher than the five-analyst outlook and above the year-ago 89 cents.

TVX Gold (TVX Quote) posted first-quarter earnings of 1 cent a share, topping both the six-analyst forecast of a break-even quarter and the year-ago loss of a penny.

Winstar (WCII Quote) reported a first-quarter loss of $3.72 a share, narrower than the 17-analyst forecast of a loss of $3.83 but wider than the year-ago loss of $2.60.

Mergers, acquisitions and joint ventures

Interplay Entertainment (IPLY Quote) agreed to sell 6.25 million shares for $25 million to France's Titus Interactive.

Louisiana-Pacific (LPX Quote) said it sold its lumber mill in Hattiesburg, Miss., to Hudson Lumber as part of a plan to streamline its business.

National Information (NAIG Quote) said its shareholders approved a merger with an information services subsidiary of First American Financial (FAF Quote).

Offerings and stock actions

Insight Communications, the 10th-largest cable TV system operator in the nation based on customers served, announced plans to raise more than $500 million through an IPO. The company hopes to trade on the Nasdaq Composite Index under the symbol ICCIA. Donaldson Lufkin & Jenrette is the lead underwriter.

Miscellany

La Jolla Pharmaceutical (LJPC Quote) and Abbott Laboratories (ABT Quote) said clinical trials for La Jolla's lupus drug candidate, LJP 394, have been suspended. An interim analysis of the Phase II/III trial indicated that the drug wasn't as effective as expected.

Matrix Pharmaceutical (MATX Quote) was granted fast-track review by the Food and Drug Administration for its IntraDose injectable gel, a cancer treatment.

Oxford Health Plans (OXHP Quote) named Norman Payson chairman, succeeding Fred Nazem, who will continue as a director.