(

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.

)

Merger mania gripped the Internet sector, sending shares of acquisition targets flying, while some suitors got roughed up a bit.

Silknet

(SILK) - Get Report

flew 39 1/8, or 28.6%, to 183 5/16 after

Kana Communications

(KANA)

agreed to buy it in a $4.2 billion stock deal. Kana shed 23 7/8, or 9.2%, to 240 1/2.

Akamai Technologies

(AKAM) - Get Report

fared relatively better, losing 8 1/2 to 228 5/8 after it said it entered a $2.8 billion stock deal to acquire

InterVu

(ITVU)

. Shares of InterVu popped 8 5/8, or 7.4%, to 129 3/8. The deal, which values InterVu at $140 a share, calls for Akamai to issue 9.3 million shares for all outstanding shares of InterVu.

For today, at least,

Lucent's

(LU)

$2.95 billion acquisition of

Ortel

(ORTL)

wasn't producing any winners. Lucent lost 3/8 to 56 5/8, while Ortel fell 10 7/16, or 5.9%, to 168 1/16.

Mergers, acquisitions and joint ventures

AOL Europe

, a joint venture between

America Online

(AOL)

and

Bertelsmann

, said it made a pact with

Ericsson

(ERICY)

and

Nokia

(NOK) - Get Report

to test and develop Internet-compatible mobile services. AOL lost 3/16 to 57 5/8, Ericsson inched up 1/16 to 85 3/4 and Nokia rose 5/8 to 192 5/8. AOL Europe also said it would test its WAP gateway for Web-compatible cell phones and SMS messaging and Mail by Phone services with

RTS Wireless

. Wit SoundView initiated coverage of Nokia with a buy rating and a long-term price target of 220.

Arrow Electronics

(ARW) - Get Report

inched up 1/16 to 23 1/16 after it agreed to buy France's

Tekelec Europe

, a distributor of high-tech components and systems, for an undisclosed sum.

Bestfoods

(BFO) - Get Report

lost 3/4 to 42 1/4 after it said it is in the final stages of negotiations to acquire

Arisco Products Alimenticios

, the large, privately-held Brazilian food company, in a deal worth about $752 million including assumed debt.

Chesapeake

(CSK)

slipped 5/8 to 25 3/8 after it won a legal victory in its proposed $500 million hostile takeover of rival

Shorewood

(SWD)

. Shorewood rose 2 1/16, or 12.9%, to 18. The decision paves the way for Chesapeake to pursue its tender offer, currently set to expire at the end of this month, for a majority of Shorewood's shares.

Corel

(CORL)

fell 11/16 to 19 5/16 after it said it would buy

Inprise/Borland

(INPR)

in a $2.44 billion stock deal. Inprise/Borland rose 5/16 to 13 1/4. The terms call for Inprise shareholders to gain 44% control of Corel.

E*Trade

(EGRP)

rose 1/16 to 22 3/4 after saying it and

Softbank

will set up a joint venture to launch E*Trade in South Korea.

Go2Net

(GNET)

inched up 1/4 to 84 1/4 after it said it entered a three-year deal with

National Discount Brokers

(NDB)

, which would make NBD.com Go2Net's exclusive brokerage service. National Discount Brokers rose 3 7/8, or 16.3%, to 27 11/16. According to the terms, Go2Net, along with Vulcan Ventures, would invest $30 million in National Discount Brokers for the purchase of 1 million shares of National Discount Brokers. Go2Net said it would also get $7.5 million from NBD.com during the deal and its chairman and CEO Russell Horowitz would take a seat on the National Discount Brokers board.

Phillips Petroleum

(P)

rose 1 to 40 after it agreed to a 50/50 joint chemicals venture with

Chevron

(CHV)

, which would have combined assets of more than $6 billion. Chevron inched up 1/2 to 79 1/16.

Dresdner Kleinwort Benson

upgraded Phillips to add from hold.

Pfizer

(PFE) - Get Report

gained 15/16 to 36 11/16 after it said it would acquire

Warner-Lambert

(WLA)

for $90 billion. Warner-Lambert gained 2 9/16 to 97 1/8. Warner-Lambert's board is expected today to favor the deal, which would form the largest U.S. pharmaceutical company. The latest agreement does not carry a break-up fee or a collar to lock in a price range for Warner Lambert in case of a sharp price swinging in Pfizer. The agreement axed

American Home Products'

(AHP)

initial plans, announced in November, for a $58 billion merger with Warner-Lambert. American Home, which will collect a $1.8 billion break-up fee, closed up 2 15/16, or 6.5%, to 48 7/16.

The Pfizer and Warner-Lambert union calls for Pfizer to pay 2.75 shares for every share of Warner-Lambert at 98.31 a share. According to sources, Warner-Lambert could receive up to nine of the 15 seats on Pfizer's board.

Donaldson Lufkin & Jenrette

raised Pfizer to market performance from underperformance and cut Warner-Lambert to market performance from buy. Separately, Merrill Lynch upgraded Pfizer to near-term buy from accumulate.

For more on this merger, take a look at the

story written by

TheStreet.com/NYTimes.com

joint newsroom.

Polo Ralph Lauren

(RL) - Get Report

gained 2 1/8, or 15%, to 16 1/4 after it said it entered a 30-year joint venture with

General Electric

(GE) - Get Report

unit

NBC

and its two affiliates

ValueVision

(VVTV)

and

NBC Internet

to form

Ralph Lauren Media

. The venture would sell Polo American products through broadcast, cable, print and the Web. GE inched up 1/8 to 141 11/16 and NBC Internet lost 5/8 to 73 7/8.

Reader's Digest

(RDA)

lost 3/8 to 35 1/2 after it said it bought a 12% stake in

Chinas Markets

, a Hong Kong Web company which operates financial and investment information sites.

GE Equity

, a unit of General Electric, is also a major investor, Reader's Digest said.

Rhythms NetConnections

(RTHM)

climbed 3 5/8, or 10.4%, to 38 15/16 after it said it will receive $250 million in financing from investment firm

Hicks Muse Tate & Furst

and will use the funds to expand its network in the U.S. and increase its customer base.

Visual Networks

(VNWK)

dropped 12 5/8, or 19.9%, to 50 5/16 after it said it has agreed to buy

Avesta Tech

in a stock deal valued at $415 million.

Earnings/revenue reports and previews

Azurix

(AZX)

slipped 3/4, or 8.3%, to 8 1/4 after it reported fourth-quarter earnings of 10 cents a share, in line with both the five-analyst estimate and the year-ago report.

Axa Financial

(AXF)

slipped 1/4 to 31 11/16 after it posted fourth-quarter earnings of 71 cents a share, beating the 13-analyst estimate of 66 cents and up from the year-ago 37 cents.

Sykes Enterprises

(SYKE) - Get Report

lost 4, or 22.2%, to 14 1/4 after it posted fourth-quarter earnings of 17 cents a share, missing the 11-analyst estimate of 21 cents and down from the year-ago 28 cents. Banc of America cut its rating on Sykes to market perform from a strong buy.

Williams Communications

(WCG) - Get Report

rose 11/16 to 38 7/8 after it reported a fourth-quarter loss of 16 cents a share, narrower than both the six-analyst estimate of a 26-cent loss and the year-ago 20-cent loss.

Offerings and stock actions

Aurora Biosciences

(ABSC)

climbed 11 13/16, or 24.5%, to 59 3/4 after it said it agreed to sell 1.8 million shares at 42 a share through a private placement offering.

Deutsche Banc Alex. Brown

raised its price target on the stock to 83 from 44.

First Sentinel

(FSLA)

rose 3/16 to 8 after it set a 3.8 million-share repurchasing program.

Group 1 Software

(GSOF)

gained 1, or 5.3%, to 23 5/8 after it set a 3-for-2 stock split.

Milacron

(MZ)

was unchanged at 13 after it set a share-repurchasing program of up to 4 million shares.

Analyst actions

Donaldson Lufkin & Jenrette cut its rating on the steel industry to market perform from outperform. DLJ cut

LTV

(LTV)

,

Metals USA

(MUI) - Get Report

,

Olympic Steel

(ZEUS) - Get Report

,

Steel Technologies

(STTX)

and

USX-U.S. Steel Group

(X) - Get Report

to market perform from buy.

Shares of LTV slipped 7/16, or 13.2%, to 2 1/8 and Metals USA stumbled 5/16 to 8 1/16, while U.S. Steel Group slid 7/16 to 23 7/8.

Deutsche Banc Alex. Brown raised its rating on

Albany Molecular

(AMRI)

to strong buy from buy.

Credit Suisse First Boston

reinstated coverage of

Applied Micro Circuits

(AMCC)

as a strong buy and set a price target of 240. Shares of Applied Micro Circuits soared 25 1/8, or 13.5%, to 213 9/16.

Salomon Smith Barney

initiated coverage of

Avis Rent A Car

(AVI)

with a buy rating and a price target of 29. Shares of Avis Rent A Car declined 5/16 to 21 1/4.

First Boston raised its six-month price target on

Autodesk

(ADSK) - Get Report

to 46. Shares of Autodesk popped 3 7/8, or 11.8%, to 36 9/16.

J.P. Morgan

downgraded the rating of

Basin Exploration

(BSNX)

to market performer from buy. Basin Exploration skidded 2 15/16, or 27.1%, to 9 1/16.

First Boston analyst Wendell Laidley said he is concerned about the implications of Karen Willem's resignation as CFO of

Brio Technology

(BRYO)

given her active operational role within the senior management team, although the business remains solid. Shares of Brio Technology retreated 5 13/16, or 16.6%, to 29 1/2.

Wit SoundView analyst Truc Do upgraded

Cisco Systems

(CSCO) - Get Report

to strong buy from buy and raised his long-term price target to 160 from 120. Cisco Systems lifted 3 15/16 to 125 3/16.

Warburg Dillon Read

upped its rating on

Covance

(CVD)

to buy from hold. Shares of Covance shot up 1 1/16, or 7%, to 16 1/4.

Banc of America upped its rating on

Digital Insight

(DGIN)

to strong buy from buy. Digital Insight bounced up 9 1/2, or 19.6%, to 57 7/8.

Morgan Stanley Dean Witter

raised its rating on

Filenet

(FILE)

to outperform from neutral and set a price target of 50. FileNet hopped 2 3/8, or 8%, to 32 1/16.

J.P. Morgan downgraded the rating of

Hartford Financial

(HIG) - Get Report

to market perform from buy. Hartford Financial shed 1 15/16 to 39 15/16

Banc of America raised its rating on

Manugistics

(MANU) - Get Report

to strong buy from buy. Shares of Manugistics added 1 7/16 to 56 3/8.

Salomon Smith Barney analyst Jack Grubman reiterated his buy rating on

MCI WorldCom

(WCOM)

. Shares of MCI WorldComm climbed 3 3/8, or 7.6%, to 47 7/8.

Salomon Smith Barney upped

MedImmune's

(MEDI)

rating to buy and set a price target of 170. Shares of MedImmune tacked on 12 5/8, or 9.7%, to 142 1/16.

Merrill Lynch

raised its rating on

Noble Drilling

(NE) - Get Report

to near-term buy from near-term accumulate, saying its intermediate-term range for its shares is 42. Shares of Noble Drilling bounced 1 3/8 to 31 15/16.

Merrill Lynch upped its intermediate-term rating on

Praxair

(PX)

to buy from neutral. Shares of Praxair added 5/8 to 42.

Deutsche Banc Alex. Brown reinstated coverage of

SpectraSite Holdings

(SITE) - Get Report

with a buy rating. Shares of SpectraSite Holdings shed 1 3/16, or 5.6%, to 20 1/8.

ING Barings

said that it upped its fiscal 2000 EPS estimate on

Telmex

(TMX)

to $7.20 per ADR from $6.33 and its 2001 estimate to $7.91 per ADR from $6.90, while reiterating its hold rating. Shares of Telmex leaped 5, or 7.7%, to 69 5/8.

First Boston upgraded

Toll Brothers

(TOL) - Get Report

to buy from hold. Shares of Toll Brothers lifted 1/4 to 17 1/16.

J.P. Morgan cut the rating for

Travelers Property

(TAP) - Get Report

to market perform from buy. Shares of Travelers Property slid 1 5/8 to 33 5/16.

Wit SoundView rolled out coverage of

Uniroyal Technology

(UTCI)

with a strong buy rating and a long-term price target of 55. Shares of Uniroyal Technology mounted 5, or 13.8%, to 41.

Miscellany

Amcol International

(ACO)

edged up 3/16 to 14 9/16 after it said it has tapped Larry Washow to replace the retiring John Hughes as the company's CEO. AMCOL said Washow would take over the position in May 2000.

Fidelity Holdings

(FDHG)

skidded 1 3/16, or 8.3%, to 14 15/16 after it said it tapped its president, Doron Cohen, as its new CEO.

IBM

(IBM) - Get Report

declined 1 1/2 to 114 1/8 after it said it will introduce a new brand of personal computer devices designed for Web access in the second quarter, as part of a plan to regain momentum in its PC business and return to profitability.

United Parcel Service

(UPS) - Get Report

slid 7/16 to 55 15/16 after it said it has formed a new division, UPS e-ventures, to identify and develop new businesses related to supply chain management and e-commerce.

As originally published, this story contained an error. Please see

Corrections and Clarifications.