Off-Hours Trading: Futures Pointing to Continued Bounce for Stocks

Yesterday's positive momentum looks ready to carry through into early trading today, with the futures and European action pointing higher.

The S&P 500 futures on Globex lately were up 5.2 to 1352.9, about 2 points above fair value. The thinly traded Nasdaq 100 futures were up 11.1 to 4169.1.

Major indices in Europe were up solidly, with the French CAC 40 leading on the upside with a gain of 1.5%. The U.K.'s FTSE 100 was up 1%, while Germany's Xetra Dax was up 0.7%. Stocks trended higher in overnight Asian trading as well (see today's Asian Markets Update for more).

In corporate news, America Online (AOL Quote) was up 1 5/16 to 61 15/16 on Instinet on a Wall Street Journal report that AOL and pending acquisition Time Warner (TWX Quote) will pledge to open their cable system to other Internet service providers. Time Warner hadn't traded.

Elsewhere, Lycos (LCOS Quote) and a CMGI (CMGI Quote) company plan to offer free dial-up Internet access. Neither stock had traded.

Last Night's After-Hours Trading

By Eric Gillin
Staff Reporter

Look out for the big 3Com (COMS Quote) comeback! In after-hours action, the company had investors in the palm of its hand after a disappointing day session. 3Com ended off 1 5/8, or 2%, to 79 1/16, despite being raised by Lehman Brothers to outperform from neutral and announcing a CDMA deal with Samsung.

Tonight though, 3Com's fortunes have reversed significantly. The stock rose 6 5/8 to 85 5/8 on 145,000 shares on Island ECN after raising the projected price range for its pending IPO spinoff of its Palm Pilot unit. 3Com's signature Palm Pilot, one of the best-known palm computing brands, was originally projected at an offering price between $14 and $16 a share. After the bell, 3Com more than doubled that price, revising the range to between $30 and $32 a share.

Because the new Palm Pilot unit is a wholly owned 3Com subsidiary, investors were excited about the revised price range, which is now expected to net about $664 million on a 23 million-share offering. After the offering, there will be 562.2 million outstanding shares in Palm Pilot, listed "PALM" on the Nasdaq Stock Market, with 3Com holding 532 million just after the offering. These 3Com-held Palm shares will be divested within six months, with the shares going to 3Com shareholders.

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"Vertical trade communities," eh?

Applied Digital Solutions (ADSX Quote) rose 1 7/8 to 13 3/4 on 776,000 shares on Island after announcing its new business-to-business plan, which it labeled "vertical trade communities." These communities, which shouldn't be confused with other perpendicular business spaces such as office buildings, will be used to promote Applied Digital Solutions' products while creating an arena for companies to share information.

The vertical communities will focus on three separate, but interrelated, technology sectors: networking, telecommunications and Internet. The company said it expects to get vendor support for the communities from industry heavyweights like Dell (DELL Quote), Compaq (CPQ Quote) and Lucent (LU Quote), while enabling users to create business relationships among themselves. In a press release, Applied Digital's CEO Richard Sullivan said the company was targeting "computer telephony Internet integration audiences."

When this announcement hit Wall Street earlier today, investor reaction was overwhelmingly positive. Applied Digital became a vertically traded commodity, rising steadily before spiking to a record close at the bell. When the day session ended, Applied Digital Solutions had a gain of 2 7/16, or 25.8%, to 11 7/8. Tonight, it extended that winning streak.

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Turn it up, bring on the NOIZ.

Anthrax and Public Enemy have nothing on Micronetics Wireless (NOIZ Quote) tonight. The New Hampshire-based broadband equipment maker gained 10 9/16 to 36 on 536,000 shares, squeezing more gains from a day that saw it jump 14 11/16, or 136.6%, to 25 7/16 in regular trading.

The impetus for the move was Micronetics' announcement regarding a new product, which goes by the charming name of "integrated AWGN Generator and Multi-Path fading simulator." The device, used to filter out noise in Code Division Multiple Access, or CDMA, systems, will be publicly demonstrated at a New Orleans wireless trade show. Investors were excited about the product because it works on CDMA systems, which are a staple of some wireless technology and frequently mentioned in the same breath as Qualcomm (QCOM Quote).

Volatility in Micronetics was severe. During the first hour of the postclose session, the company had a gain of more than a point and traded in a range just north of 26 1/2. But as the night progressed, the gap between the buyers and sellers widened, with buyers taking higher prices, shooting the stock up from a 3- to 9-point gain in a 15-minute span shortly before 5:30 p.m. EST.

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The nouveaux rich got richer.

Cytogen (CYTO Quote) gained 2 to 18 7/16 on 209,000 shares on Island. Tonight's move extends a day-session jump of 1 7/16, or 9.6%, to 16 7/16. The company has released no news since Friday, but momentum and interest in the microcap have been rising recently, following the overall strength in biotechs. Cytogen is up 26% since Thursday.

Superconductor Technologies (SCON Quote) added to its day-session gain of 31 3/8, or 46.5%, to 98 7/8 by tacking on 8 17/64 to 107 1/2 on 54,000 shares. Recently, shares in this company have put the "gang" in gangbusters, rising 653% since Feb. 16, when its stock shot up on news that it received 27 orders for its SuperFilter Systems from an unnamed cellular service provider. Tonight, Superconductor moved on momentum alone, as the company made no new announcements.

Another recent success story had a happy ending in the postclose session. Pacific Softworks (PASW Quote) rose 2 3/4 to 13 1/4 on 96,000 shares on Island, capping a gain of 2 9/16, or 32.3%, to 10 1/2 during the day.

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American Eco (ECGO Quote) was still atop Island's most actives list, trading on heavy volume after announcing the receipt of a $6 million contract. It rose 1/32 to 1 1/32 on 1.45 million shares on the news. During the day, American Eco rose 1/32 to 31/32.

Action Contract Services, an American Eco unit, received the contract and will be responsible for the installation of steel pipe racks, some electrical and instrumentation work and other construction tasks. The contract is part of the NROC Project, based in Port Arthur, Texas, which aims to create the largest steam-cracking unit in the world.

10 most active stocks on Island ECN (8 p.m. EST)
Company	Price	Change	Session Volume
American Eco (ECGO Quote)	1 1/32	+1/32	1,449,270
Imaging Technologies (ITEC Quote)	2 1/16	-1/32	977,120
Applied Digital Solutions (ADSX Quote)	13 3/4	+1 7/8	776,400
Swank (SNKI Quote)	1 1/2	+11/32	576,620
Micronetics Wireless (NOIZ Quote)	36	+10 9/16	536,286
Incara Pharmaceuticals (INCR Quote)	3 15/32	+9/32	288,644
Today's Man (TMAN Quote)	1 3/32	+5/32	248,044
Cytogen (CYTO Quote)	18 7/16	+2	209,574
3Com (COMS Quote)	85 5/8	+6 5/8	145,598
World of Science (WOSI Quote)	1 3/8	0	102,600

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EST..

10 most active stocks on MarketXT (8 p.m. EST)
Company	Price	Change	Session Volume
RF Micro Devices (RFMD Quote)	138 7/8	-1/16	6,200
Imaging Technologies (ITEC Quote)	2 3/16	+1/16	5,400
3Com (COMS Quote)	85	+5 15/16	5,280
Superconductor Technologies (SCON Quote)	105	+6 1/8	4,430
Intelect Communications (ICOM Quote)	6 1/2	+3/4	4,000
Lucent (LU Quote)	58 1/2	+1/2	4,000
Internet Capital Group (ICGE Quote)	99	+2 1/16	3,100
Oracle (ORCL Quote)	70	+1 3/8	2,650
Yahoo! (YHOO Quote)	159 11/16	-2 5/16	2,600
Applied Digital Solutions (ADSX Quote)	13 1/2	+1 5/8	1,730

MarketXT, formerly Eclipse Trading, offers after-hours trading to retail clients of Morgan Stanley Dean Witter's (MWD Quote) Morgan Stanley Dean Witter Online, Mellon Bank's (MEL Quote) Dreyfus Brokerage Services and clients of Salomon Smith Barney. It is also available to clients of Mydiscountbroker.com, CyBerCorp and Interactive Brokers. Clients can trade 200 of the most actively traded New York Stock Exchange and Nasdaq Stock Market issues, 4:30 p.m. to 8 p.m. EST Monday through Thursday.

Confused? TheStreet.com explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.