Company Report: Exodus, Xcelera Leap on Deal; Chip Stocks Skyrocket

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Exodus Communications (EXDS) jumped 14 1/8, or 9.1%, to 169 3/8 after saying it is making a $637.5 million equity investment in Mirror Image Internet, a subsidiary of Xcelera.com (XLA) . Xcelera soared 37 3/4, or 21.7%, to 212. The companies plan to improve Web site performance for customers, consumers and e-Business Web sites.

Volatile chip stocks were on the upswing again.

Rambus

(RMBS) - Get Report

rocketed 83 25/32, or 31.4%, to 350 3/8, after

Morgan Stanley Dean Witter

analyst Mark Edelstone set a new price target of 500. That should be of some comfort to investors who watched it sink about 45% in the past week alone. The

Philadelphia Stock Exchange Semiconductor Index

posted a healthy 9.2% gain.

Chip stocks also escaped some potential pain when

Micron Technology

(MU) - Get Report

quickly bounced back from last night's

earnings disappointment. Analysts lent a helping hand. See below for more details.

Mergers, acquisitions and joint ventures

Bank One

(ONE) - Get Report

is

looking into selling its Internet bank,

WingspanBank.com

, which was launched less than a year ago,

The Wall Street Journal

reported. The newspaper said Bank One, whose stock collapsed last August and hasn't even come close to recovering, has hired

Morgan Stanley Dean Witter

to advise it on a possible sale. Bank One fell 3/16 to 25 15/16.

Separately,

Household International

(HI) - Get Report

slipped 1/8 to 37 3/4 after it said it is buying the $2.15 billion real estate loan portfolio in cash from

Banc One Financial Services

, the consumer finance division of Bank One.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Cytec Industries

(CYT)

lost 3/16 to 29 7/16 after it said it is "pursuing strategic options for its paper chemicals business" and has hired

Credit Suisse First Boston

to help. Cytec said its paper chemicals business had pro forma sales of $100 million in 1999.

DaimlerChrysler

(DCX)

climbed 11/16 to 66 1/8 after saying it is taking a look at acquiring a controlling stake in Japan's

Mitsubishi

, according to published reports.

The

Federal Trade Commission

has begun a preliminary probe into plans by

Ford

(F) - Get Report

,

General Motors

(GM) - Get Report

and DaimlerChrysler to build an online parts market, the

Journal

reported. Ford lost 1 7/8 to 43 15/16, while GM gained 1 9/16 to 81 3/4. The newspaper said that spokesmen for the auto titans said they weren't aware of a probe but anticipated the alliance among the big automakers to move forward.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com

joint newsroom.

General Electric

(GE) - Get Report

gained 3/8 to 150 7/8 after saying its

NBC

unit will acquire a minority stake in Lou Dobbs'

Space.com

. Earlier,

Salomon Smith Barney

raised GE's 2000 EPS estimates to $3.75 and 2001 estimates to $4.30.

Microsoft

(MSFT) - Get Report

moved up 1/2 to 103 1/4 and

Texas Instruments

(TXN) - Get Report

tacked on 7 13/16 to 179 1/16 after the companies said they are teaming up to develop enhanced software capabilities for wireless handheld devices such as personal digital assistants.

PSINet

(PSIX)

sank 7 15/16, or 16%, to 41 9/16 after it said it is buying

Metamor Worldwide

(MMWW)

for $44.55 a share, a whopping premium to Metamor's closing price of $16 yesterday. Metamor popped 17 21/32, or 108.3%, to 33 21/32. Under terms of the deal, Metamor shareholders will receive 0.9 of a PSINet share for each Metamor share they own.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com

joint newsroom.

PepsiCo

(PEP) - Get Report

fell 13/16 to 33 1/2 and

Yahoo!

(YHOO)

jumped 5 7/16 to 197 3/16 after the companies set a joint online and offline promotional program,

Pepsi Stuff.com

.

WebStreet

(WEBS)

, a small online brokerage best known for its '70s-set TV advertisements, saw its stock rise 2 3/32, or 29.8%, to 9 1/8 after announcing that it had formed a strategic alliance with a Hong Kong company to let its investors trade U.S. stocks. Customers of

Sun Hung Kai & Co.'s

online unit,

SHKOnline

, were able to start trading Wednesday. Web Street, based in Chicago, was formed in 1996 and went public in November 1999 at $11 a share. Since then, the stock has been heavily pressured as the company

struggles to keep costs low amid growing competition.

Earnings/revenue reports and previews

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified. New highs and lows on a closing basis unless otherwise specified.

)

Micron Technology reported second-quarter earnings of 58 cents a share, which includes a charge, far short of the

First Call/Thomson Financial

22-analyst estimate of 74 cents, but up from the year-ago 8 cents, which also includes a charge. Micron said that average selling prices for its semiconductor memory products fell 20% in the second quarter from the first quarter. Gross margins of the company's semiconductor operations fell to 41% from 58% in the previous quarter.

Despite the weak results, a number of analysts released positive research on Micron today, saying that PC fundamentals are firming and that the second half of 2000 should be strong due to seasonal trends.

Deutsche Banc Alex. Brown

raised Micron's price target to 210 from 130, while

Warburg Dillon Read

lifted its price target to 160 from 130. Micron moved up 20 1/4, or 17%, to 139 1/2 .

For more on Micron's

swift recovery see coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Dean Foods

(DF) - Get Report

dropped 3 1/4, or 11.8%, to 24 1/4 after it posted third-quarter earnings of 67 cents a share, shy of the nine-analyst estimate of 71 cents but up from the year-ago 20 cents. The company said it would likely meet analysts' fourth-quarter forecasts of 82 cents, despite falling short of expectations in the third quarter.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Genome Therapuetics

(GENE) - Get Report

jumped 10 63/64, or 44.5%, to 35 43/64 after it posted break-even second-quarter results, narrower than the single-analyst expected loss of 4 cents a share. The year-ago loss was 7 cents a share.

Gucci

(GUC)

lost 5 7/8, or 6.2%, to 89 1/8 after it posted full-year 1999 net income of $3.48 a share, a penny ahead of the seven-analyst estimate and up from the year-ago $3.28. For the fourth quarter, Gucci reported net income of 97 cents a share, a penny ahead of the five-analyst estimate but down from the year-ago $1.12.

Donaldson Lufkin & Jenrette

cut Gucci to market perform from buy.

Myers Industries

(MYE) - Get Report

lost 1 1/8, or 8.4%, to 12 5/16 after it said its 2000 net earnings may be constrained by continued increases in raw material prices, saying the costs may hamper its ability to improve upon results.

National Service Industry

(NSI)

slipped 9/16 to 21 3/8 after it reported second-quarter operating earnings of 49 cents a share, in line with the five-analyst estimate but down from the year-ago operating earnings of 54 cents.

State Auto Financial

(STFC) - Get Report

added 19/32, or 7.3%, to 8 23/32 said that extra revenue from a subsidiary would add 7 cents a share to profits for the full year 2000.

Worthington Industries

(WTHG)

slipped 1/8 to 12 11/16 after it posted third-quarter earnings of 26 cents a share, beating the eight-analyst estimate of 25 cents and up from the year-ago 21 cents.

Offerings and stock actions

Chase Manhattan

(CMB)

fell 7/16 to 91 9/16 after last night saying it set a 3-for-2 stock split.

EDS

(EDS)

gained 3 5/8, or 5.5%, to 70 after it announced a stock-repurchase plan of up to 9.5 million shares.

inSilicon

(INSN)

gained 9 9/16, or 79.7%, to 21 9/16 in its trading debut.

Robertson Stephens

priced 3.5 million shares at $12 each, above the expected $9-to-$11 range. inSilicon, which is a unit of

Phoenix Technologies

(PTEC)

, uses communications technology to design complex semiconductors for devices such as network routers and cell phones.

For more on this

story, see coverage from

TheStreet.com/NYTimes.com

joint newsroom.

Hutchison Whampoa

sold a huge portion of its stake in

Vodafone AirTouch

(VOD) - Get Report

.

Reuters

said

Deutsche Bank

and

Goldman Sachs

placed 925 million shares of Vodafone at 349 pence each.

PartsBase

(PRTS) - Get Report

fell 1 5/8, or 12.5%, to 11 3/8 in its trading debut.

Cruttenden Roth

priced 3.5 million shares at $13 each, the top of the expected $11 to $13 range. The company is an online marketplace for companies to buy and sell new, used and overhauled aviation parts and products.

Tularik

(TLRK)

tacked on 7/16 to 35 3/4 after it said it priced stock at $35.125 a share in a follow-up stock offering. The latest offering involves 2.5 million shares.

Analyst actions

This morning,

Morgan Stanley Dean Witter

launched coverage of five companies involved in the manufacturing of construction and home building materials.

Martin Marietta

(MLM) - Get Report

,

Masco

(MAS) - Get Report

and

Vulcan

(VMC) - Get Report

were all initiated with market outperform ratings.

Lafarge

(LAF)

and

Armstrong World

(ACK)

were launched with neutral ratings.

Martin Marietta lost 3/4 to 45 1/4, Masco lost 9/16 to 21 3/4, Vulcan slipped 1 to 42 15/16, Lafarge lost 13/16 to 23 3/16 and Armstrong World fell 15/16 to 18 7/8.

Analog Devices

(ADI) - Get Report

rose 7, or 8.2%, to 92: INITIATED with a buy rating at

Salomon Smith Barney

.

Belco Oil & Gas

(BOG)

rose 1 1/16, or 11.3%, to 10 7/16: INITIATED with a buy rating and an 11 price target at Deutsche Banc Alex. Brown.

Broadcom

jumped 14 5/8, or 6.4%, to 242 5/8: INITIATED with a buy rating at

W.R. Hambrecht

.

Crane

(CR) - Get Report

: INITIATED with a buy rating at

Lehman Brothers

.

Diebold

(DBD) - Get Report

gained 1 5/8, or 6.2%, to 27 3/4: INITIATED with a buy rating at Lehman Brothers.

Elan

(ELN)

rose 5/16 to 43 1/4: INITIATED with a recommended list rating and a 55 price target at

Goldman Sachs

.

Garden.com

(GDEN) - Get Report

gained 1, or 13.1%, to 8 5/8: INITIATED with a buy rating at W.R. Hambrecht.

GATX

(GMT)

rose 3/4 to 37 1/8: INITIATED with a buy rating at Lehman Brothers.

Hotel Reservations Network

(ROOM)

gained 1 1/4, or 8.5%, to 16: INITIATED with buy ratings at

Bear Stearns

and Donaldson Lufkin & Jenrette.

JDS Uniphase

(JDSU)

jumped 3 7/8 to 130 7/8: INITIATED with a buy rating and a 180 price target at W.R. Hambrecht.

Natural Microsystems

(NMSS)

jumped 22 3/4, or 41.7%, to 77 1/4: rating UP to strong buy from buy at Alex. Brown.

Nextcard

(NXCD)

moved up 1 9/16, or 9.1%, to 18 11/16: INITIATED with a strong buy rating and a 43 price target of 43.

Nike

(NKE) - Get Report

moved up 5/8 to 33 3/4: INITIATED with a buy rating at Credit Suisse First Boston.

Northrop

(NOC) - Get Report

inched up 1/4 to 54 1/4: 2000 earnings estimate UP to $8.35 per share from $7.20 at

SG Cowen

.

SDL

(SDLI)

sailed up 12 3/8, or 5.9%, to 223 7/8: INITIATED with a buy rating at W.R. Hambrecht.

Travelers Property Casualty

(TAP) - Get Report

inched up 1/16 to 41: rating DOWN to hold from strong buy at Warburg Dillon Read.

Viad

(VVI) - Get Report

edged up 1/16 to 22 1/4: INITIATED with a buy rating at Lehman Brothers.

Miscellany

Autodesk

(ADSK) - Get Report

lost 1 to 50 3/16 after it said the

Federal Trade Commission

has ended an investigation of the company's business practices.

Baxter Healthcare

, the main U.S. unit of

Baxter International

(BAX) - Get Report

said it was investing $400 million to expand its medicine-making ability through construction and upgrades at its plants. Baxter International slipped 1/8 to 62 3/4.

Carnival

(CCL) - Get Report

rose 13/16 to 24 13/16 after it said it plans to build a new $500 million, 110,000-ton ship in Italy for its cruise lines unit.

Bye-bye, Rezulin.

Warner-Lambert

(WLA)

is withdrawing its controversial diabetes drug from the U.S. market. The

Food and Drug Administration

said that the company had agreed to an FDA request to pull the drug, which had been linked to fatal liver failure. Warner-Lambert lost 1 3/8 to 95 3/8.