Stocks look like they'll give back a little of yesterday's
-inspired rally, with investors booking some gains going into the weekend.
Attention will center on
$62 billion bid for
. The prospect of a dogfight with
, which has made a friendly $54 billion offer for MediaOne, along with concerns that AT&T has barely begun to digest
, will likely hurt AT&T's shares today.
With the broader market looking to catch its breath, the news from letter T provides a good excuse for a pullback at the bell.
"It looks like we're going to open down a little bit," said Bill Meehan, market analyst at
. "But I expect that we'll see continued equity fund inflows, and with so much excitement over earnings, the market still looks higher short term. There's a lot of momentum here."
At 9 a.m. EDT, the
futures were off 4.4, about 2 below fair value and indicating weakness at the open. The 30-year Treasury was up 6/32 to 95 5/32, dropping the yield to 5.59%.
Japanese stocks gained ground in a broad-based rally that took the
257.37, or 1.5%, higher to 16,923.25. There's been increasing speculation in the market that the government will announce further stimulus plans when Prime Minister
meets with President
After trading higher through much of the day, Hong Kong stocks sold off on late-session rumors that several China-based companies listed on the exchange would be making secondary offerings. The
finished the day down 28.24 to 12,905.3.
After the close, the
Hong Kong Association of Banks
left interbank rates pat, but indicated that, given the spreads between Hong Kong and the U.S., another cut could come soon.
European stocks were seeing a bit of pressure. In Frankfurt, the
was off 17.52 to 5201.30. In Paris, the
was down 17.7 to 4274.15.
London stocks were seeing a bit of a bid, with telecom shares moving higher on the back of AT&T's bid for MediaOne.
Cable & Wireless
, which with MediaOne jointly owns cellular provider
, was up 24.5 pence to 839.5, while
, in which MediaOne has a large stake, was up 19 to 281.
was up 11.5 to 6425.1.
Friday's Wake-Up Watchlist
- AT&T has made an unsolicited bid valued at more than $62 billion for MediaOne, topping Comcast's friendly $54 billion offer, made last month.
TheStreet.com wrote about the situation in a story
Cox Communications (COX) yesterday said it is buying
Media General's cable systems serving approximately 260,000 customers in Fairfax County and Fredricksburg, Va., in a deal valued at $1.4 billion.
Merck (MRK) - Get Report posted first-quarter earnings of 54 cents a share, in line with the
First Call 30-analyst estimate and up from the year-ago 47 cents.
In other news (earnings estimates from First Call):
Eastman Chemical (EMN) - Get Report posted first-quarter operating earnings, excluding items, of 44 cents a share, beating the nine-analyst estimate of 28 cents, but down sharply from the year-ago 94 cents. Including items, net income was 31 cents a share.
E*Trade (EGRP) set a 2-for-1 stock split.
Merrill Lynch upgraded
Exxon (XON) - Get Report to long-term accumulate from long-term neutral.
Gateway (GTW) reported first-quarter earnings of 62 cents a share, 2 cents higher than the 23-analyst view and ahead of the year-ago 48 cents.
Kellogg (K) - Get Report reported first-quarter operating earnings, excluding items, of 36 cents a share, a penny better than the 17-analyst view, but down from the year-ago 42 cents.
Mobil (MOB) reported first-quarter operating earnings, excluding items, of 59 cents a share, beating the 22-analyst estimate of 54 cents, but down from the year-ago operating earnings, excluding items, of 88 cents.
Donaldson Lufkin & Jenrette downgraded
PepsiCo (PEP) - Get Report to market perform from top pick.
Morgan Stanley Dean Witter raised its rating on
Philips Electronics (PHG) - Get Report to outperform from neutral.
Quorum Health (QHGI) to near-term accumulate from near-term neutral.
The Heard on the Street column in
The Wall Street Journal says the "smart" money on Wall Street and elsewhere is betting
Olivetti has a shot to succeed in its hostile takeover bid for
Telecom Italia (TI) .
Deutsche Telekom (DT) - Get Report and Telecom Italia yesterday officially announced a merger agreement. While some analysts expected regulators and politicians to be the obvious obstacle to the merger, the toughest constituency to convince could be investors, the
This week's Inside Wall Street column in
BusinessWeek reports that investor Mario Gabelli thinks
Telephone & Data Systems (TDS) - Get Report is undervalued and puts the private market value of its assets at $102 a share. Gabelli figures TDS will attract a acquirer, either for some of its assets or for the whole company. Even without a deal, Gabelli, who has a 12.6% stake in the company, says TDS stock could double in a year.
Elsewhere, Doris Kelly-Watkins, a money manager at
Evergreen Asset Management, a unit of
First Union (FTU) , says
TNP Enterprises (TNP) - Get Report, parent of
Texas-New Mexico Power, is an attractive takeover candidate. The column reports Evergreen owns nearly 5% of the stock. The column reports one industry pro says TNP is in talks with suitors and he expects a deal shortly, but TNP Chairman and CEO Kevern Joyce wouldn't comment on speculation about buyout talks.
Ardent Software's (ARDT) takeover of
Prism Solutions (PRZM) -- which has battered Ardent's stock price -- might be in trouble are unjustified, some money pros say, the column says.