Tech stocks led the market downward the last two trading sessions, but this morning two analyst upgrades for

Applied Materials

(AMAT) - Get Report

and other semiconductor manufacturers have pushed the sector higher, paving the way for a strong opening.

The S&P futures were about 3.5 points above fair value.

Applied Materials was upgraded by

Merrill Lynch

and

Morgan Stanley Dean Witter

and in premarket trading was up 4 5/16. The stock closed Friday at 60 11/16.

Other major tech stocks, including

Cisco

(CSCO) - Get Report

,

Intel

(INTC) - Get Report

and

Oracle

(ORCL) - Get Report

, were higher in premarket trading as well, shaking off last week's weakness.

"The semiconductor equipment manufacturers are really popping this morning," said Dan Mathisson, head stock trader at

D.E. Shaw

. "All the techs got hit at the end of the week, and so we're seeing them all up generally."

Microsoft

(MSFT) - Get Report

, currently fighting an uphill battle with the

Justice Department

, may elect to split itself into four different groups. It is attempting to bring back former executive Brad Silverberg to help the software maker's overhaul, according to the

Seattle Times

. Microsoft was up fractionally in premarket activity.

The 30-year Treasury bond was up 9/32 to trade at 98 24/32, as the yield declined to 5.33%. The Treasury begins its quarterly refunding tomorrow with the sale of five-year notes.

Japanese bonds rallied 20 basis points to 2.16% on rumors that the

Bank of Japan

would buy bonds from the

Ministry of Finance

to take pressure off Japanese credit markets. The MOF is selling twice as many bonds this year as it did in 1998 to fund government programs.

Vice finance minister for international affairs

Eisuke Sakakibara

said the recent rise in Japanese bond yields, coupled with the strength in the yen, was not desirable for economic recovery. He said the government may investigate buying bonds to cap rising interest rates, but BOJ officials indicated they were opposed to the idea.

The dollar rose 1 yen to 113.8. The

Nikkei

rose 94.41 to 13,992.49.

Other Asian stocks were down, including the

Hang Seng

, down 50.60 points to 9139.60.

Major European indices were mixed. The German

Dax

fell 30.60 to 5066.83. The

FTSE

was off 31.2 to 5824.1, but the

CAC

was up 20 to 4167.68.

The earnings calendar is light, with

Times Mirror

(TMC)

and

Provident Cos.

(PVT) - Get Report

the most notable names reporting today.

Monday's Wake-Up Watchlist

By

Brian Louis
Staff Reporter

    Chubb

    (CB) - Get Report

    said it is buying

    Executive Risk

    (ER)

    in a stock-for-stock deal valued at $850 million. The acquisition values shares of Executive Risk at $71.71, a huge premium over the stock's closing price on Friday of 44.

    Over the weekend, Chubb was the subject of a story in

    Barron's

    , which said that with

    Congress

    expected to soon dismantle the remaining barriers that separate banking from insurance, Chubb could have takeover appeal to a large U.S. financial-services firm that wants to expand into insurance. In a recent research report on

    Warren Buffett's

    Berkshire Hathaway

    ,

    PaineWebber

    analyst Alice Schroeder identified Chubb as the one insurer the famed Buffett might be interested in acquiring,

    Barron's

    said.

    Separately, Executive Risk posted fourth-quarter earnings of 93 cents a share, in line with the

    First Call

    10-analyst consensus estimate and up from the year-ago 84 cents.

    XL Capital

    (XL) - Get Report

    , a Bermuda-based insurer, is in negotiations to acquire

    NAC Re

    (NRC) - Get Report

    for about $1 billion in stock,

    The Wall Street Journal

    reported, citing people familiar with the talks.

    Worldwide sales of mobile telephones to consumers reached 162.9 million units in 1998, up 51% over 1997 shipments, according to

    Dataquest

    , a unit of

    Gartner Group

    (IT) - Get Report

    . Digital mobile phone sales surpassed analog phones in 1998, as digital accounted for 84.6% of total mobile phone sales. Because of the transition to digital,

    Nokia

    (NOK.A)

    moved past

    Motorola

    (MOT)

    to take the No. 1 position in the worldwide mobile telephone terminal market, as Nokia's market share totaled 22.9%. Motorola held its No. 1 position in the analog segment, but Nokia posted the strongest growth in the total mobile telephone market, as Nokia's shipments increased 81.5%.

    American Airlines

    , a unit of

    AMR

    (AMR)

    , canceled about 90 flights on Saturday and upwards of 200 on Sunday, 9% of scheduled connections, as a result of an escalating dispute with its pilots union over the progress of its recent merger with

    Reno Air

    (RENO)

    .

    Morgan Stanley Dean Witter

    upgraded

    Applied Materials

    (AMAT) - Get Report

    to strong buy from neutral.

    BMC Software

    (BMCS)

    and

    Sun Microsystems

    (SUNW) - Get Report

    announced an alliance for application service assurance solutions which the companies said will improve the availability, performance and recovery of business-critical applications. The alliance includes technology integration as well as joint sales and marketing. In addition, Sun signed a significant software license purchase agreement to deploy BMC Software's products throughout its information-technology environment.

    Citigroup's

    (C) - Get Report

    consumer business, which includes

    Citibank

    credit cards and

    Travelers

    insurance, aims to cut its current costs by as much as $1 billion by the end of this year, more than the company previously announced, the

    Journal

    reported.

    Coca-Cola

    (KO) - Get Report

    is the subject of a profile in the

    Journal

    highlighting -- in light of the wobbly condition of the economies of Russia, Asia and Latin America -- the downside of its global expansion.

    Computer Associates

    (CA) - Get Report

    is acquiring

    Computer Management Sciences

    (CMSX)

    for $435 million.

    EarthLink Network

    (ELNK)

    and

    MBNA

    (KRB)

    unveiled the new

    EarthLink Visa

    card, which the companies have dubbed "the official credit card of the Net." The companies said the credit card is the first that rewards cardholders for shopping anywhere online.

    Microsoft is poised to undergo one of the biggest organizational shake-ups in its history, the

    Seattle Times

    reported yesterday. Possibly as soon as this week, Microsoft will announce a broad restructuring that will overhaul the company's operations and put more focus on the Internet, the

    Times

    reported.

    Motorola and

    Cisco

    (CSCO) - Get Report

    are entering into a strategic alliance to deliver what the companies call the "first worldwide wireless Internet."

    Nextel Communications

    (NXTL)

    has joined forces with Netscape

    (NSCP)

    to offer a wireless data package that combines voice, data and the Internet, the

    Journal

    reported. The new service, called

    Nextel Online

    , will enable Nextel customers to use their digital phones to access a personalized Internet gateway, send and receive email, and browse the Web, the article said.

    The bidding battle for a piece of

    Patriot American Hospitality

    (PAH) - Get Report

    heated up as both

    Hilton Hotels

    (HLT) - Get Report

    and an investor group -- led by

    Apollo Real Estate Advisors

    -- sweetened competing offers for the hotel real-estate investment trust, the

    Journal

    reported, citing people familiar with the matter. The new offer by Hilton and its investment bankers at

    Donaldson Lufkin & Jenrette

    added a $3 billion refinancing package to Hilton's previous offer to invest $350 million in Patriot and buy $1 billion in hotel assets from the company, the

    Journal

    reported. Meanwhile, the Apollo Real Estate-led group is still proposing a $1 billion investment in Patriot, but at terms somewhat more favorable to the Dallas-based REIT's shareholders, the

    Journal

    reported.