Done With Compaq. Bring on Intel.

Plus, retail sales and CPI data from the government.
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Wall Street did not merely digest

Compaq's

(CPQ)

earnings warning yesterday; it ripped the thing apart, gulped it down, burped and asked for more. Which makes one wonder what the Street is going to do for a postprandial encore.

Mostly it waits. Nobody quite believed what Compaq said, that its problems are industrywide, but there are at least nagging doubts. And many of those doubts should be either confirmed or laid to rest when

Intel

(INTC) - Get Report

reports its first quarter after the close. The chipmaker is expected to earn 55 cents a share.

But there is at least a bit of a bid in stocks this morning -- and small wonder. Stocks' ability to reverse course yesterday, closing out the day with the major indices all at new highs, is the kind of thing that traders love to see.

"We have to respect that momentum, at least for a while," said Todd Clark, head of listed trading at

Charles Schwab

. "It looks like any pullback this morning is going to be brief."

At 9 a.m. EDT, the

S&P 500

futures were off 2, leaving them better than 2 points above fair value and indicating a positive open.

Part of that strength is likely due to good numbers from a couple of brokers.

Merrill Lynch

(MER)

and

PaineWebber

(PWJ)

both stomped all over analysts' first-quarter earnings estimates when they reported this morning. "It looks like they're going to be at the forefront," said Clark of the brokers. Retailers also look strong.

Treasuries showed little reaction to slightly weaker-than-expected prints on the March

Consumer Price Index

and March

retail sales

. The 30-year Treasury was off at 4/32 at 96 10/32, putting the yield at 5.46%.

Wall Street's handling of Compaq's earnings shortfall yesterday put a shine on Asian equities. In Tokyo, the

Nikkei

added 207.76, or 1.3%, to 16,715.16. Still, there was some caution in tech issues ahead of Intel's earnings announcement tonight.

Hong Kong stocks hit levels they haven't seen since before the midst of the October 1997 market decline. The

Hang Seng

closed up 154.95, or 1.3%, to 11,899.69. The index briefly rose as high as 11,956.43, but the 12,000 level looks like it will offer significant resistance, and stocks fell back.

European indices were all higher. In Frankfurt, the

Dax

was up 40.64 to 5199.8. In Paris, the

CAC

was up 8.9 at 4363.9. In London, the

FTSE

was up 54.8 at 6496.

Tuesday's Wake-Up Watchlist

By

Brian Louis

Staff Reporter

  • Cisco (CSCO) - Get Report is buying GeoTel Communications (GEOC) for $2 billion. Under terms of the deal, Cisco will exchange 0.5138 share for each outstanding share and option of GeoTel.
  • Merrill Lynch posted first-quarter earnings of $1.44 a share, blowing past the First Call nine-analyst estimate of $1.23 and up from the year ago $1.26.
  • Justice Department investigators are closing in on an antitrust case against American Airlines, alleging the unit of AMR (AMR) tried to illegally drive a small rival out of the airline's hub in Dallas, The Wall Street Journal reported, citing lawyers and industry officials close to the inquiry. In other news (earnings estimates are from First Call):
  • AmSouth Bancorp (ASO) posted first-quarter earnings of 59 cents a share, beating the 14-analyst estimate by a penny.
  • Associates First Capital (AFS) reported first-quarter earnings of 46 cents a share, in line with the 22-analyst estimate and up from the year-ago 40 cents.
  • Merrill Lynch upgraded Coca-Cola (KO) - Get Report to near-term accumulate from near-term neutral.
  • Merrill upgraded DaimlerChrysler (DCX) to near-term buy from near-term accumulate.
  • Enron (ENE) posted first-quarter earnings of 68 cents a share, beating the 16-analyst estimate of 65 cents and the year-ago 65 cents.
  • Ericsson (ERICY) is acquiring Torrent Networking Technologies for $450 million in cash.
  • W.W. Grainger (GWW) - Get Report reported first-quarter earnings of 60 cents a share, shy of the 12-analyst estimate of 62 cents, but up from the year-ago 58 cents.
  • Intel is slated to report earnings after the close.
  • Metromedia Fiber Network (MFNX) set a 2-for-1 stock split.
  • MGIC Investment (MTG) - Get Report posted first-quarter earnings of 90 cents a share, excluding a penny gain, beating the 11-analyst estimate of 88 cents.
  • Newport News Shipbuilding (NNS) posted first-quarter earnings of 50 cents a share, in line with the two-analyst estimate and up from the year-ago 44 cents. Yesterday, Senate Armed Services Committee Chairman John Warner (R., Va.) said approval of General Dynamics' (GD) - Get Report proposed $1.4 billion takeover of Newport News is "less likely."
  • PaineWebber reported first-quarter earnings of $1.01 a share, crushing the seven-analyst estimate of 73 cents and up from the year-ago 77 cents.
  • RealNetworks (RNWK) - Get Report is buying privately held Xing Technology, a developer and provider of MP3 software, for up to $75 million in stock. RealNetworks expects to record a charge for acquisition-related costs upon closing the deal, which it expects to be completed in the third quarter.
  • CIBC Oppenheimer set a price target of 200 on Charles Schwab (SCH) , CNBC reported. Schwab closed at 135 yesterday.
  • Synovus Financial (SNV) - Get Report posted first-quarter earnings of 18 cents a share, in line with the seven-analyst estimate and up from the year-ago 15 cents.
  • Tribune (TRB) posted first-quarter earnings of 53 cents a share, excluding one-time items, beating the 14-analyst estimate by 2 cents and up from the year-ago 46 cents.
  • Weyerhaeuser (WY) - Get Report posted first-quarter earnings of 51 cents a share before special charges, beating the 16-analyst estimate of 36 cents.

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Corrections and Clarifications.