Stocks to Watch: AET, ING, BSTE, MEDX, COST, SIGYY, LTD, MNDA, TLB, ABT, CRA, MSFT

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M&A Earnings/revenue Analyst actions Offerings/stock actions Miscellany

The IPO for ONI Systems (ONIS) was soaring 56 11/16, or 227%, to 82 11/16 after Goldman Sachs priced 8 million shares at $25 a share, above its expected $21 to $23 price range. The San Jose, Calif.-based company develops and sells all-optical networking equipment designed to reduce bandwidth and service bottlenecks.

Mergers, acquisitions and joint ventures

Aetna (AET) climbed 2 3/16 to 68 15/16 after it confirmed yesterday that it had resumed talks with Dutch financial services company ING Groep (ING) about a sale of Aetna's profitable financial services and international units. ING Groep slipped 1/16 to 60 1/4. Aetna's statement came after a report on CNBC, which said ING could pay as much as $9 billion for the units.

Canada-based Alcan Aluminum(AL) lost 7/16 to 32 1/2 after it upped its bid to acquire Swiss aluminum-maker Algroup, which locked in support from a major Algroup shareholder. If the deal is completed, it would form a company with annual sales of about $12.5 billion. The terms call for Alcan to exchange 17.1 of its common shares for each share of Algroup. In addition, Algroup shareholders would receive a repayment of capital of 90 Swiss francs and a special dividend of 135 Swiss francs for each of the Algroup shares they own. BZ Group Holdings, one of Algroup's biggest holders, and its affiliates favored tendering 34% of their Algroup shares for the revised offer. Alcan initially offered 20.1745 Alcan shares for each Algroup share.

Biosite Diagnostics(BSTE) jumped 5 1/2, or 25%, to 28 1/8 and Medarex(MEDX) moved up 3 7/16, or 7.6%, to 48 15/16 after the companies said they will form an alliance aimed at accelerating drug research via Trans-Phage Technology, which is a method to create fully human antibodies by using technology from both companies.

Through this alliance, Biosite and Medarex will offer pharmaceutical and biotechnology companies access to large volumes of human antibodies to validate genomic targets and to identify promising drug candidates.

One of Costco's(COST) subsidiaries bought a 20% stake in Costco Wholesale UK from The Littlewoods Organisation, bringing Costco's ownership in Costco Wholesale UK to 80%. Costco was lately edging up 3/8 to 32 5/16. Carrefour Nederland B.V. owns the remaining 20% interest. Costco Wholesale UK currently operates eight Costco warehouse locations -- six in England and two in Scotland -- with three more units to open prior to the end of the year.

Jewelry retailer Signet Group(SIGYY) inched up 1/4 to 32 5/8 after it said it is buying privately owned U.S. retail jeweler Marks & Morgan for $115 million in cash, which will strengthen Signet's position in the U.S. market.

Marks & Morgan has 137 stores, mainly in mall locations in the southeastern region of the country. Signet said the purchase is expected to enhance earnings in the current year and beyond, but the company didn't quantify the earnings impact. Under the agreement, Signet will also repay Marks & Morgan's debt.

Procter & Gamble(PG) fell 9/16 to 65 15/16 after it said it will pay $17 million to up its stake to 16% in Regeneron Pharmaceuticals(REGN). According to Reuters, Procter & Gamble will buy 573,630 shares at $29.75, upping the company's holdings to 5.7 million shares of Regeneron. Procter & Gamble also has warrants to purchase an additional 1.45 million shares.

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Earnings/revenue reports and previews

Abercrombie & Fitch(ANF) lost 1 3/16, or 12.1%, to 8 5/8 after it reported a 14% drop in May same-store sales. The clothing retailer said it has tapped Wesley McDonald as its CFO.

Best Buy(BBY) rose 3 3/4, or 5.9%, to 67 3/4 after it said May same-store sales climbed 95%. The retailer said it expects to post first-quarter earnings of 34 cents a share, an increase of 50%. The 17-analyst estimate is 28 cents a share.

Covance (CVD) lost a mere 3/16 to 6 13/16 after warned its second-quarter earnings will fall more than 50% below forecasts, saying weakness in its late-stage drug test business hurt total profits. The current 11-analyst estimate calls for earnings of 21 cents, while the company said it expects to report earnings between 9 cents and 10 cents a share. Covance said the shortfall would force it to restructure operations, which will involve cutting 200 of its 7,600 worldwide jobs, closing offices and taking a $15 million pretax charge as it aims to reduce overhead and capacity. Covance said the new restructuring is expected to deliver pretax savings of about $16 million by 2001.

Gap (GPS) slipped 7/16 to 34 5/8 after last night reporting its May same-store sales fell 2%. Today, Prudential reiterated the stock as a strong buy and said it would build positions now.

J.C. Penney(JCP) lost 1/8 to 18 after it said May same-store sales rose 1.1%.

Limited(LTD) lost 7/16 to 23 11/16 after it posted a 7% increase in same-store sales.

Kohl's(KSS) gained 2 1/2 to 54 1/4 after it reported a 9.8% increase in May same-store sales.

Mitchell Energy(MNDA) moved up 1 1/16 to 30 1/8 after it posted first-quarter earnings of 78 cents a share, beating the three-analyst estimate of 73 and up from the year-ago 11-cent profit.

Sears(S) sailed up 1 1/8 to 38 1/16 after it posted a 3.5% increase in May same-store sales.

Talbots(TLB) tacked on 1 1/8 to 58 1/16 after it posted a 29.4% increase in same-store sales.

Wal-Mart(WMT) lost 1/2 to 57 1/8 despite reporting a 7.4% increase in May same-store sales.

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Analyst actions

Pharmaceutical company Pfizer(PFE) was up 7/8 to 45 3/8 after Merrill Lynch added it to its Focus One list of recommended stocks. Merrill's drug analyst Steven Tighe said the company is the strongest in the space and has the strongest products in its pipeline.

He also praised the company's proposed merger with Warner-Lambert(WLA). Warner-Lambert shares were up 2 9/16 to 124 11/16.

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Chip and semiconductor manufacturer Motorola (MOT) was up 5 5/8, or 6%, to 99 3/8, after ABN Amro upgraded the stock to buy from outperform and raised the stock's price target to 130. ABN Amro also raised Motorola's earnings estimates for 2001 to $4.32 from $4.25 a share.

Upgrades

Colgate-Palmolive (CL) was up 1 5/16 to 53 15/16: UP to recommended list from market outperformer at Goldman Sachs.

E-Tek Dynamics (ETEK) was riding high, up 20 1/16, or 10.9%, to 203 7/8: 2000 EPS view UP to 88 cents from 86 cents at Wit Soundview; 2000 revenue view up to $332.2 million from $327.6 million.

Hewlett-Packard (HWP) shares grew 11 9/16, or 9.6%, to 31 3/4: UP to strong buy from buy at Banc of America.

Net2Phone (NTOP) hopped 3 3/8, or 11.4%, to 32 7/8: 2001 loss-per-share estimate cut to 84 cents from a loss of $1.03.

UAL (UAL) grew 2 1/8 to 53 5/8: intermediate-term UP to accumulate from hold and long-term UP to buy from accumulate at Merrill Lynch.

Universal Foods (UFC) climbed 1/2 to 17 3/4: UP to buy from market perform at DLJ.

Downgrades

Mark IV Industries(IV) was up 3/16 to 21 7/16: DOWN to market perform from buy at Deutsche Banc Alex. Brown.

Marsh & McClennan (MMC) slipped 7/8 to 109 3/16: DOWN to hold from buy at UBS Warburg.

Pacific Sunwear (PSUN) shares tanked, falling 3 15/16, or 24.5%, to 12 1/8: DOWN to buy from strong buy at First Union.

Verio (VRIO) lost 2 11/16 to 54 3/16: DOWN to sell from buy at DLJ.

Initiations

American Express (AXP) gained 3/8 to 54 3/8: NEW market performer at Banc of America.

Comerica(CMA) shares bounced up 3 1/2, or 6.9%, to 54 1/8: NEW buy at DLJ; price target: 58.

Hain Food (HAIN) bumped up 1 3/8 to 30 7/8: RESTARTED with a buy at Bear Stearns; price target: 48.

Intuit (INTU) grew 2 1/8, or 5.9%, to 38 3/8: NEW buy at Banc of America; price target: 46.

McKesson HBOC (MCK) edged up 1/16 to 16 1/2: NEW hold at CSFB.

National Information Consortium (EGOV) soared 2 1/8, or 14.3%, to 17: NEW strong buy at Banc of America.

PerkinElmer (PKI) gained 3 3/4, or 7.1%, to 56 1/4: NEW strong buy at UBS Warburg; price target: 70.

Seacor Smit (CKH) dipped 5/8 to 63 1/2: NEW outperform at Morgan Stanley Dean Witter; price target: 80.

Group Moves

Lehman Brothers lowered their earnings- or losses-per-share estimates for several on-line brokers:

• Ameritrade shares popped up 3/8 to 11 3/4: 2000 estimate lowered to a loss of 8 cents from a loss of 6 cents.

• DLJDirect(DIR) shares were off 1/8 to 8 1/4: 2000 earnings lowered to 11 cents from 25 cents.

• E*Trade(EGRP) grew 5/8 to 16 3/16: 2000 estimate lowered to loss of 11 cents from a loss of 10 cents.

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Offerings and stock actions

The e-business infrastructure software company CrossWorlds Software said its IPO price range for 4 million common shares fell to $10 to $12 a share from $14 to $16 a share. The company will net about $48.9 million, including proceeds from the private sale of more than 901,000 additional shares. Chase Hambrecht & Quist, Dain Rauscher Wessels and Thomas Weisel Partners are handling the IPO, which is expected to begin trading this week. The company applied for the listing "CWLD" on the Nasdaq.

First Horizon Pharmaceutical (FHRX) was edging up 1/8 to 8 1/8 after Chase Hambrecht & Quist priced 3.8 million shares at $8 each, the low end of the estimated $8 to $10 range. The company markets and sells brand-name prescription drugs largely focused on chronic conditions. Earlier today, the range was lowered from $12 to $14 a share.

Reuters reported IMX Exchange, an online exchange that links mortgage brokers and lenders, withdrew its $57.5 million IPO because of general market conditions.

The company, which first filed to go public in March, planned to use the proceeds for such general corporate purposes as working capital and capital expenditures. Deutsche Banc Alex Brown, J.P. Morgan, SG Cowen and E-Offering were going to handle the IPO. The company had applied for the listing "IMXX" on the Nasdaq.

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Miscellany

Abbott Laboratories(ABT) rose 5/8 to 41 5/16 after it said it has applied for Food and Drug Administration marketing approval for its investigational HIV and AIDS antiretroviral therapy, ABT-378/r. The company said it is requesting accelerated approval for the treatment, citing its Phase II/III trials which examined its safety.

Bank One(ONE) rose 7/8 to 34 after it tapped former Citigroup(C) executive Charles Scharf as its CFO.

Celera Genomics(CRA) climbed 1 1/8 to 64 1/4 after it said it has sequenced about 1.15 billion base pairs -- letters of genetic code -- of mouse DNA. The company began sequencing the mouse genome on April 6.

According to Reuters, Celera's president and chief scientific officer J. Craig Venter said, "Mice can function as translators of the human genome in that changes in their genetic material can teach us how changes in the letters of human DNA lead to predisposition to disease and responses to medical treatments."

Juno Online(JWEB) edged up 1 1/32 to 8 3/8 after it filed a lawsuit against Qualcomm(QCOM) and NetZero(NZRO) for patent infringement. The patent protects a technology Juno developed that enables advertisements and other content to be displayed to an Internet user while the user is offline. Qualcomm was lately up 3 3/4, or 6.3%, to 70 1/8,.

Qualcomm is the publisher of the Eudora e-mail software currently being distributed by NetZero, which provides free Internet access. In its suit, Juno asserts that NetZero and Qualcomm are infringing its patent by producing, distributing, and encouraging the use of software that unlawfully implements Juno's patented offline architecture.

Microsoft (MSFT) moved up 2 15/16 to 65 1/2 after it criticized a government proposal to split up the firm in order to prevent future antitrust violations, calling it defective, vague and ambiguous.

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