First Security (FSCO Quote) was rising 1/16, or 8.7%, to 13 1/4 this afternoon following Wells Fargo's (WFC Quote) announcement that it will purchase First Security for about $3 billion. Under terms of the deal, First Security shareholders will receive 0.355 of a share of Wells Fargo stock, or $14.11 a share, a 16% premium over First Security's closing price of 12 3/16 on Friday. Wells Fargo fell 3/4 to 39.
Netcentives (NCNT Quote), a developer of software and services for online marketing, boosted 2 1/2, or 10.6%, to 26 after Internet venture capital firm CMGI (CMGI Quote) announced that it will buy 4.9 percent of the company. CMGI will work with the company to develop an online loyalty program. Accordingly, Netcentives will become the preferred software provider for the CMGI points reward program, which means that if the customer has no other preference, Netcentives' software will be used. CMGI fell 3 11/16 to 90 1/16.
Mergers, acquisitions and joint ventures
GTE's (GTE Quote) board approved a capital expenditure plan totaling $1.8 billion to $2 billion in 2000 and $11 billion to $13 billion over five years so its Genuity unit, formerly known as GTE Internetworking, can accelerate the buildout of its network infrastructure. Genuity has also filed a registration statement with the SEC for an IPO. GTE was down 2 3/16 to 72 7/8. GTE is merging with Bell Atlantic (BEL Quote). The merger is expected to be completed by the end of this quarter. GTE also said it expects revenue growth in the high single digits, which is consistent with its previous guidance, while earnings growth for the full year on a stand-alone basis is projected in the high single digits. The company said earnings growth in 2001 and 2002 is expected to be in the 10% range, and to accelerate to at least the mid-teens after that. Bell Atlantic fell 1 13/16 to 62 13/16.
Boeing (BA Quote) lost 7/16 after it announced that it is in talks with Britain's BAe Systems that might lead to a $46 billion merger, Britain's Sunday Telegraph reported. Chase (CMB Quote) advanced 1 3/4 after stating that it is close to buying British investment bank and asset management concern Robert Fleming for $7 billion to $8 billion, The Wall Street Journal reported, citing people familiar with the matter. Last month the Financial Times reported that Chase was in takeover discussions with Fleming. Software developer Corel (CORL Quote) has bought several product lines for graphic artists from MetaCreations (MCRE Quote). Corel dropped 1/8 to 10 1/8, while MetaCreations fell 1 1/2, or 8.3%, to 16 1/2. Herbalife's (HERBA Quote) CEO Mark Hughes has canceled plans to buy all outstanding shares of the nutritional products maker in a $500 million deal. According to Herbalife, difficult conditions in credit markets have "made it impracticable to obtain financing for this transaction." Herbalife slumped 3 1/16, or 20.4%, to 11 15/16. Impco Technologies (IMCO Quote), a manufacturer of fuel systems, will sell 2.5 million shares. The company has filed with the SEC for approval to sell 1.625 million shares, which is expected to give the company about $44.4 million. Additionally, two stockholders will sell 875,000 shares. The company said it plans to use the estimated $44.4 million to repay debt, expand its development engineering capabilities and for general corporate purposes. Impco Technologies fell 2 7/8, or 8%, to 32 7/8. A host of technology titans, including Intel (INTC Quote), Compaq (CPQ Quote), Motorola (MOT Quote), 3Com (COMS Quote), Advanced Micro Devices (AMD Quote), Cisco (CSCO Quote), and Texas Instruments (TXN Quote), to name a few, have formed HomePlug Powerline Alliance. Separately, Intel's CEO, at a news conference in Tokyo, said the company would invest $6 billion this year to increase its chip production capacity, Reuters reported. Intel rose 3/16 to 137; Compaq advanced 3/16 to 30 1/16; Motorola slipped 1/4 to 153 1/2; 3Com climbed 3 1/16, or 6%, to 54 1/16; AMD lifted 2 1/16 to 77 9/16; Cisco gained 1/2 to 75 7/16; Texas Instruments fell 2 11/16 to 163 13/16. Internet media company RealNetworks (RNWK Quote) and Akamai Technologies (AKAM Quote), which provides services that speed up delivery of Web content, announced a pact to improve the delivery of audio and video content over the Internet. RealNetworks dropped 15/16 to 49 1/16, while Akamai Technologies fell 5 13/16 to 139 7/8. Reynolds & Reynolds (REY Quote), which provides information management systems to the automotive and general markets, rose 1 5/16 to 28 3/16, after it announced that it will spin off its document services unit and focus on its automotive retail-systems business. VerticalNet (VERT Quote) and Microsoft (MSFT Quote) signed their definitive agreement announced earlier this year for a three-year alliance to deliver business-to-business e-commerce services and content to small and medium-sized businesses. VerticalNet fell 7/8 to 57 3/8, while Microsoft fell 2 7/16 to 86 5/8. Earnings/revenue reports and previews
(Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.) NBTY (NBTY Quote), a manufacturer and marketer of nutritional supplements, announced a second-quarter sales increase of 19.3%, to $200 million. NBTY rose 1/8 to 14 3/16. Wesley Jessen VisionCare (WJCO Quote), which makes tinted contact lenses, expects earnings to total between 43 cents and 44 cents, above the seven-analyst estimate of 41 cents. Wesley Jessen VisionCare climbed 9/16 to 34 7/8.
Adtran (ADTN Quote), a maker of high-speed digital transmission products, fell 3 1/4 to 64 5/8 after it posted first-quarter earnings of 42 cents a share, well above the 10-analyst estimate of 35 cents a share and above the year-ago 24 cents. Champion International (CHA Quote) lost 1 3/16 to 55 5/16 after it posted fourth-quarter earnings of $1.01 a share, above the 11-analyst estimate of 83 cents a share and sharply up from the year-ago 3 cents a share. Consulting firm EA Engineering (EACO Quote) slumped 3/16, or 14.3%, to 1 1/8 after it announced that it will restate 1998 and 1999 earnings after completing an investigation of accounting irregularities. EA said the investigation concluded that the irregularities would reduce earnings over the prior-year's quarter by about $14 million, or 14 cents per share. MSC Industrial Direct (MSM Quote), a direct marketer of industrial products, lost 1/16 to 17 1/4 after posting second-quarter earnings of 20 cents, in line with the five-analyst estimate but below the year-ago 22 cents. Analyst actions
This morning, Dow component General Motors (GM Quote) was upgraded to buy from market perform and its price target was set at 107 at Deutsche Banc Alex. Brown. General Motors stock was up 3 5/16 to 87 15/16.
Intuit (INTU Quote): rating DOWN to buy from strong buy at Credit Suisse First Boston. Intuit slumped 7 3/8 points, or 14.7%, to 42 15/16 after the analyst action. Activcard (ACTI Quote): coverage STARTED as a buy with a 120 price target at J.P. Morgan. Activcard was up 5 1/8, or 12.69% to 45 1/2. Citrix (CTXS Quote): coverage STARTED as a buy with a price target of 115 at PaineWebber. Citrix leapt up 5 7/16 or 7% to 83 1/16. Fairmarket (FAIM Quote): coverage STARTED as a strong buy with a 40 price target at Alex. Brown. Fairmarket shares were off 1 3/4, or 7.1% to 23.
Act Manufacturing (ACTM Quote): price target UP to 73-70 per share from 45 at Credit Suisse First Boston. Act Manufacturing rose 1 39/64 to 49 1/2 on the news. Amtran(AMTR Quote): coverage STARTED as a buy with a price target of 22 at Alex. Brown. Amtran eked up 1/4 to 17. Broadwing (BRW Quote): coverage STARTED as a buy with a 12-month price target of 51 at J.P. Morgan. The stock inched up 13/16 to 32 13/16. Digitas (DTAS Quote): NEW strong buy at Banc of America and buy at Bear Stearns. Digitas shares were down 3/4 to 21 1/4. Banc of America analyst Mark Fisher announced rating changes on six energy companies, upgrading two and downgrading four: Lasmo (LSO Quote) and Swift Energy (SFY Quote): UP to buy from market perform; EOG Resources (EOG Quote) and Ocean Energy (OEI Quote): DOWN to buy from strong buy; St. Mary Land and Explorations (MARY Quote) and Meridian Resource (TMR Quote): DOWN to market perform from buy. Lasmo and Swift Energy were up 1/8 point to 5 3/4 and 1/4 to 17 1/8 points, respectively. Ocean Energy fell 5/8 to 12 3/8, Mary Land and Explorations was off 1/2 to 33 5/8, and Meridian Resource was off just 1/16 to 3 3/8 points. Peregrine Systems (PRGN Quote): is trading 3 7/8 higher, a pop of 11.5%, to 37 1/2, after being upgraded to strong buy from accumulate by Prudential Securities Radvision (RVSN Quote) traded up 1/4 to 46 1/4 after coverage STARTED with a buy rating and a 75 price target for the end of 2000 at Lehman Brothers. Safeguard Scientific (SFE Quote): traded up 1 3/4 to 61 1/4, after coverage STARTED as a strong buy with a 70 price target at Alex. Brown. The Internet incubator, will stop investing in business-to-business Net operations and will focus instead on companies that provide services, software and communications technology for the Internet, the company's president and COO told the Journal.
Vignette (VIGN Quote): traded down 14 9/16 or 7.2% to 186 3/8, after coverage was STARTED as a buy with a 275 12-month price target at CSFB. Miscellany
Ericsson (ERICY Quote), traded up 1 1/8 to 91 3/16, after the Swedish wireless giant, has bought 375,000 new shares of Merrimac Industries (MRM Quote), representing 17.5% of Merrimac's outstanding stock, for $9 a share. Machinists at Lockheed Martin's (LMT Quote) Fort Worth, Texas aeronautics manufacturing facility went on strike this morning, following a vote Sunday to reject a contract offer from the company. Lockheed Martin remained unchanged at 21 1/16. Merrill Lynch chief technical analyst Richard McCabe told investors to reduce their tech holdings as prices in the sector rebound. He recommends energy, financial, basic-industry and consumer-cyclical stocks.
