Company Report: AET, ING, WLP, HWP, AMZN, LU, MOT, FLEX, More

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U.S. health insurer

Aetna

(AET)

climbed 4 1/16, or 6.5%, to 66 3/4 after

CNBC

reported it is in talks to sell its financial services and international business units to Dutch financial services company

ING Groep

(ING) - Get Report

for up to $9 billion. Aetna rejected a bid by ING and

WellPoint Health Networks

(WLP)

to buy Aetna for $10 billion in March. ING Groep edged up 3/16 to 60 5/16, while WellPoint dropped 1 13/16 to 72 5/8.

Dow component

Hewlett-Packard

(HWP)

dropped 4 3/8 to 120 1/8 despite announcing an agreement with

Amazon.com

(AMZN) - Get Report

to supply the online retailer with 90% of its hardware and related systems. Amazon.com also lost ground, falling 3 7/16, or 6.6%, to 48 5/16.

H-P's fellow tech Dow dweller

IBM

(IBM) - Get Report

also fell, ending the session down 3 9/16 to 107 3/8.

Mergers, acquisitions and joint ventures

Dean Foods

(DF) - Get Report

lost 3/8 to 30 3/8 after it announced it will buy

Land O'Lakes'

Upper Midwest fluid milk operations. The companies also agreed to form a joint venture to market and license certain value-added fluid and cultured dairy products to further expand and leverage the Land O'Lakes brand name nationwide.

Both agreements include long-term licensing arrangements for use of the Land O'Lakes brand name. The transaction, which is subject to regulatory review, is expected to close on or about July 1. Terms of the deal were not disclosed.

Lucent

(LU)

lost 1/2 to 57 1/4 after it agreed to acquire privately held fiber optical networking equipment maker

Chromatis Networks

in a stock deal valued at $4.5 billion. According to the deal's terms, Lucent, which already holds about a 7% interest in Chromatis, would pay 78 million of its shares for the company, based on Lucent's closing price yesterday of $58.19.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Motorola

(MOT)

dropped 2 3/16 to 94 1/4 after it said it entered a $30 billion outsourcing deal with

Flextronics International

(FLEX) - Get Report

. Flextronics popped 4 3/8, or 8.7%, to 54 7/16. The terms call for Flextronics to make parts for Motorola's wireless phone, two-way pager and wireless infrastructure. Motorola has also agreed to pay $100 million for an equity instrument which is eventually convertible into 11 million shares of Flextronics.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Royal Dutch Shell

(RD)

will sell its Australian-based coal business to

Anglo American

(AAUK)

for about $850 million in a deal that puts Anglo back into the Asian coal market. Anglo American inched up 1/4 to 43 3/8 and Royal Dutch gained 7/8 to 62 7/16.

Shell said the final price for the business could reach $900 million, depending on final adjustments on completion of the deal, but Anglo said these would be minor. The agreement is expected to be completed by the end of June. Shell did not say how it would use the proceeds.

Schlumberger

(SLB) - Get Report

sailed up 2 5/8 to 73 5/16 after it signed a Memorandum of Understanding with Baker Hughes under which Schlumberger's surface seismic business

Geco-Prakla

would join with

Baker Hughes'

(BHI)

Western Geophysical

seismic unit to form a new venture called Western Geco. Baker Hughes rose 2 1/8, or 6.2%, to 36 1/4.

In connection with the formation of the venture, Schlumberger will pay Baker Hughes $500 million in cash. Schlumberger will own 70% of the joint venture, and Baker Hughes, 30%. The deal, which is expected to close before the end of the year, is subject to completion of a definitive agreement, and to regulatory and board approvals.

Sonera

(SNRA)

, a telecom operator, rose 13/16 to 50 7/16 after it agreed to make a $200 million investment in

Powertel

(PTEL)

and

Eliska Wireless Ventures I

. Powertel popped 4 13/16, or 6.1%, to 83 13/16. The $125 million investment in Powertel boosts its interest in the company to 11.8% from 9.1%, while a $75 million investment gives it a 30.1% stake in Eliska.

Vodafone AirTouch

(VOD) - Get Report

lost 5/8 to 45 13/16 after it signed an agreement with state-owned

Telkom Kenya

to form

Safaricom

, a joint venture 40% owned by Vodafone.

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Earnings/revenue reports and previews.

Intimate Brands

(IBI)

rose 7/16 to 23 9/16 after it said May

same-store sales increased 11%.

Litton Industries

(LIT) - Get Report

rose 3/8 to 42 15/16 after it reported third-quarter earnings of $1.33 a share, beating the nine-analyst estimate by a penny and up from the year-ago earnings of $1.10 a share. The earnings were excluding a one-time gain on the sale of businesses.

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Analyst actions

This morning,

UBS Warburg's

Caroline Levy upgraded

PepsiCo

(PEP) - Get Report

to strong buy from buy and boosted its price target to 51 from 46. Levy said that the company was her top pick in the soft drink space and raved about two recent management changes. PepsiCo slipped 5/16 to 40 11/16.

Upgrades

Amerada Hess

(AHC) - Get Report

: UP to strong buy from buy at

Deutsche Banc Alex. Brown

. Amerada Hess increased 1 7/8 to 66 5/8.

HotJobs

(HOTJ)

: UP to buy from neutral at

PaineWebber

. HotJobs boosted 1 31/64, or 14.7%, to 11 9/16.

National Computer Systems

(NLCS)

: UP to intermediate-term buy from accumulate at

Merrill Lynch

. National Computer Systems shed 1 1/16 to 45 7/16.

Seagram

(VO) - Get Report

: UP to strong buy at

SG Cowen

; price target: 70. Seagram advanced 5/16 to 47 11/16.

Spectrasite

(SITE) - Get Report

: UP to buy from hold at Warburg. Spectrasite lifted 3/16 to 16 15/16.

Smithfield Foods

(SFD)

: UP to strong buy from buy at

Credit Suisse First Boston

. Smithfield Foods climbed 2 1/4, or 10%, to 24 3/4.

Wireless Facilities

(WFII)

: UP to strong buy from buy at

Chase Hambrecht & Quist

. Wireless Facilities hopped 8 11/16, or 22.6%, to 47 3/16.

Downgrades

Airgas

(ARG)

: DOWN to market performer from outperform at

Goldman Sachs

. Airgas dipped 1/4 to 5 3/8.

Answerthink Consulting

(ANSR)

: price target DOWN to 35 from 55 at CSFB. Answerthink Consulting decreased 1/16 to 17 11/16.

Cintas

(CTAS) - Get Report

: DOWN to intermediate-term accumulate from buy at Merrill Lynch. Cintas decreased 1 3/16 to 44.

Ethyl

(EY)

: DOWN to market performer from outperformer at Goldman Sachs. Ethyl remained unchanged at 2 9/16.

MGM Grand

(MGG)

: DOWN to neutral from outperform at

Lehman Brothers

. MGM Grand declined 1 5/16 to 32 1/2.

Oxford Health Plans

(OXHP)

: DOWN to neutral from buy at

Salomon Smith Barney

. Oxford fell 2 3/16, or 9.3%, to 21 1/4.

Initiations

Avigen

(AVGN)

: NEW strong buy at

ING Barings

; price target: 56. Avigen rose 1 3/16 to 29 3/4.

Clear Channel Communications

(CCU) - Get Report

: NEW buy at

SG Cowen

; price target: 90. Clear Channel traded up 7/16 to 75.

Gap

(GPS) - Get Report

: NEW buy at

Thomas Weisel

; price target: 45.

MGI Pharmaceutical

(MOGN)

: NEW strong buy at

U.S. Bancorp Piper Jaffray

; price target: 50. Gap lifted 5/8 to 35 1/16.

Paradigm Genetics

(PDGM)

: NEW strong buy at Chase H&Q. Paradigm hopped 1 3/8, or 14.3%, to 11.

Sierra Wireless

(SWIR) - Get Report

: NEW intermediate, long-term buy at

Merrill Lynch

. Sierra Wireless improved 2 3/8, or 8.5%, to 30 3/16.

SPX

(SPW)

: NEW strong buy at Warburg; price target: 190. SPX added 3 5/16 to 105 5/16.

StarMedia Network

(STRM) - Get Report

: NEW buy at CSFB; price target: 29. StarMedia boosted 1 11/16, or 10.4%, to 17 15/16.

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Offerings and stock actions

Barr Laboratories

(BRL)

rose 1 7/8 to 53 7/8 after it set a 3-for-2 stock split.

Cascade Financial

(CASB)

climbed 1, or 15.4%, to 7 1/2 after it said it will repurchase up to 5% of its shares.

NRG Energy

(NRG) - Get Report

moved up 1 5/8, or 10.8%, to 16 5/8 after

Salomon Smith Barney

priced 28.17 million shares at $15 each, below the estimated $16 to $18 range. The company is a wholly owned unit of

Northern States Power

(NSP) - Get Report

, one of the largest independent power generators in the U.S. Northern States Power slipped 1/8 to 22 1/8.

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Miscellany

AT&T's

(T) - Get Report

cable unit's programming will include a hard-core adult movie channel as part of an agreement that could leave the telecom company with a hefty portion of the movies' profits, reported

The Wall Street Journal

. According to the

Journal

, AT&T's cable division is facing pressure to produce results after using billions to upgrade its networks for new digital fare. AT&T lost 3/4 to 34 5/8.

Calvin Klein

said it would bring a lawsuit against

Warnaco

(WAC)

for alleged trademark infringement. Warnaco lost 1 5/8, or 19.6%, to 6 11/16. Calvin Klein also plans to terminate its jeans and underwear agreement with the clothing maker.

Farming and construction equipment maker

Deere

(DE) - Get Report

dropped 3 11/16, or 8.2%, to 41 9/16 after it said president and COO Robert Lane was elected CEO, a move that had been expected for several months.

ECI Telecom

(ECIL)

climbed 1 13/16, or 7.2%, to 27 1/8 after its fully owned subsidiary, InnoWave ECI Wireless Systems, was chosen by

Global Village Telecom

in Brazil to supply fixed wireless access systems, enabling GVT to deliver advanced Internet, data and telephony services to residences and businesses in south and central Brazil.

Reuters

said the deal is valued at up to $165 million.

ECI Telecom is offering GVT long-term financing. In conjunction, ECI Telecom has decided to invest up to $35 million in GVT's parent company, GVT Holding NV, in convertible subordinated notes.

Kmart

(KM)

edged up 7/8, or 11.5%, to 8 1/2 after it signed Charles Conaway, former president of

CVS

(CVS) - Get Report

to a five-year contract as its chairman and chief executive. Conaway succeeds Floyd Hall, who is retiring. CVS' current chairman and CEO, Thomas Ryan, will take on the additional duties of president.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com

joint newsroom.

LifePoint Hospitals

(LPNT)

lost 1 15/16, or 5.8%, to 21 7/16 after it announced that its chairman and chief executive, Scott Mercy, died in an airplane accident yesterday. The company named DeWitt Ezell its interim chairman. Day-to-day operations of the company will continue to be led by Jim Fleetwood, the company's president and COO.

Microsoft

(MSFT) - Get Report

is set to respond today to a plan modified by the government to divide the software giant into two companies. The stock lost 13/16 to 62 9/16. The response could be the last before a federal judge makes a final decision on the matter. The

Justice Department

and 17 states on Friday brought the revised plan, which included comments from District Court Judge Thomas Penfield Jackson, who has been presiding over the antitrust case. The proposed split would create two companies: One company would offer the Microsoft Windows applications and another would focus on Microsoft Internet Explorer and Office products. A decision could come later this week.

Network Solutions

(NSOL)

moved up 1 13/16 to 147 13/16 after it stated that it will offer free and discounted Web addresses to the Chinese government, as an act of goodwill.

Pfizer

(PFE) - Get Report

added 3/8 to 44 9/16 despite news it was sued by a Florida man who was prescribed a Pfizer drugs called Cardura for hypertension. The man claimed the pharmaceutical company failed to warn users about serious risks related to the drug.

The purported class-action suit seeks emergency notification to all Cardura users about scientific research in March that found the drug was less effective than a standard diuretic pill in preventing certain consequences of heart disease. Pfizer currently markets Cardura as an alpha blocker. The study found that while Cardura was as effective as a diuretic in preventing heart attacks and mortality, patients who took Cardura during a trial had a greater chance of suffering congestive heart failure or stroke than those who took a diuretic.

RadioShack

(RSH)

slid 3/16 to 42 5/8, despite that lavish display down on Broad Street, on its first day of trading after changing its name from

Tandy

. The name change is part of Tandy's plan to gain investor recognition by focusing on the RadioShack brand name.

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