If the takeout fight in France among
Banque National de Paris
wasn't enough to persuade investors that banks will continue to feast on one another, perhaps the latest merger news will.
said yesterday it will buy
for $16 billion in stock. The move consolidates Fleet's position as a banking leader in the Northeast and may help protect it from suitors -- or at least improve its bargaining power.
The move spur the usual who's-next speculation among regional banks. Meanwhile, the Gallic goings on may prompt cross-border mergers in Europe. It is doubtful that American banks would sit idly by while that happened.
There are other deals today.
will buy the 80% of
that it doesn't own for $7.7 billion in cash and stock. And
El Paso Energy
in a deal valued at $6 billion.
With all these mergers, one might expect stocks to vault higher. That is not the case, at least if you look at the
futures. At 9 a.m. EST, they were up 1.7, more than 3 below fair value and indicating pressure at the open. The overnight futures traders are a nervous lot, however, and it may be that they're being unduly cautious over the level on the
Dow Jones Industrial Average
of which we dare not speak. Though it's beginning to seem like the market will have trouble breaking it.
"I think we're going to continue to see this rotation and uncertainty before we get to 10,000," said Bill Allyn, head block trader at
. "We need to do a little work before we get to that number."
While there are a lot of people on the Street who are saying that 10,000 is just a number, Allyn suggests they may be underplaying how much of a psychological barrier a Dow milestone can be.
"I remember some very smart fund managers who said you should just lighten up whenever the Dow approaches 1000," said Allyn. "They'd just sell them in the high 900s and buy them back and sell them. It was a great strategy. I have a feeling 10,000 is going to be a bit like 1000."
There are other things weighing on the market. Europe's bourses are seeing a round of profit-taking. And then there are worries that more major tech companies will be confessing to slow earnings. Some believe that the market is unlikely to make fresh gains until tech gets back in the driver's seat.
"The bottom line is tech hasn't resumed its leadership role," said Bryan Piskorowski, market strategist at
. "Without them, the bull's backbone is missing."
The 30-year Treasury was off 3/32 to 95 25/32, putting the yield at 5.54%. A pretty good performance considering the pressure on the greenback -- the dollar was off 1.1 yen to 117.65.
Tokyo stocks put in a good day, spurred on by a rebound in
after reports that it is getting closer to a deal with
made their way into the market. Traders also found solace in remarks from
Bank of Japan
suggesting that he will not be tightening the taps on the money flowing into the overnight call market. The
added 290.4, or 1.9%, to 15,779.6.
Hong Kong stocks gained ground in a quiet session. The
added 35.1 to 10,836.86.
European stocks were mixed. In Frankfurt, the
was up 17.97 to 5026.13. In Paris, the
was off 6.93 to 4168.1. And London's
was down 79.7, or 1.3%, to 6202.5.
Monday's Wake-Up Watchlist
- Fleet agreed to buy BankBoston for $16 billion in stock. The deal values BankBoston shares at $53 each; the stock closed Friday at 46 15/16. Under the agreement, BankBoston shareholders will receive 1.18 Fleet shares for each BankBoston share held. The new company will be called
DuPont, which owns 20% of Pioneer Hi-Bred, is buying the rest of the company for $40 a share in cash and stock. Pioneer closed Friday at 34 5/16. The deal is valued at $7.7 billion, of which 45% will be in cash and the rest in DuPont stock.
El Paso Energy agreed to acquire Sonat for $6 billion, which includes the assumption of $2 billion of Sonat debt. Under the deal, each Sonat share will be converted into one share of El Paso Energy common stock. It is expected that the merger will be completed during the third or fourth quarter this year.
UAL (UAL) - Get Report, parent of
United Airlines, expects first-quarter earnings and full-year earnings to surpass Wall Street estimates. UAL expects first-quarter earnings to fall in a range around $1.35 a share, far above the
First Call 10-analyst estimate of $1.12. For the full year of 1999, UAL expects to earn between $10 to $12 a share, well above the current 11-analyst consensus of $9.12 a share.
In other news (earnings estimates are from
Boeing (BA) - Get Report expects to slice another 6,700 jobs from its troubled commercial jet group by the end of the year due to better-than-expected progress in battling factory overtime work and other gains,
The Wall Street Journal reported.
Morgan Stanley Dean Witter downgraded
Caterpillar (CAT) - Get Report to neutral from outperform. Caterpillar issued an earnings warning Friday.
Chancellor Media (AMFM) ended its merger agreement with
LIN Television. Chancellor Chairman Thomas O. Hicks has been appointed the company's chief executive following the resignation of Jeffrey A. Marcus. Hicks is also chairman and chief executive of
Hicks Muse Tate & Furst. Hicks Muse will retain and continue to build LIN Television as an independent enterprise within the Hicks Muse investment portfolio. Chancellor also set an Internet initiative.
Ciena (CIEN) - Get Report is buying closely held
Lightera Networks and
Omnia Communications in separate transactions for a total of $980 million.
Dillard's (DDS) - Get Report posted fourth-quarter earnings of $1.12 a share, excluding charges, beating the 14-analyst estimate of $1.07 and up from the year-ago $1.
MiniMed (MNMD) set a 2-for-1 stock split.
Nissan and French automaker
Renault are "in the final stage of negotiations" toward a deal that would have Renault buy about a one-third stake in Nissan, the
Journal reported, citing a senior Nissan executive.
Morgan Stanley upgraded
Qwest (QWST) to strong buy from outperform.
Charles Schwab (SCH) expects first-quarter net income to come in at between 31 cents and 34 cents a share, above the current seven-analyst outlook, which estimates Schwab will earn 26 cents. Revenue for the first quarter is expected to total between $910 million to $940 million. In the year-ago period, net income was 16 cents a share on revenues of $604 million.