Market Moving Out of Impeachment's Shadow

The end of the proceedings is near and a relief rally may be in the offing.
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Some questions worth asking this morning:

In the aggregate, what has been the effect of the

Clinton

scandal on the stock market? What kinds of restraints has it placed on stocks? And to what extent will those restraints be lifted when the

Senate

brings the matter to a close?

In the three days after the scandal broke in January of last year, the

S&P 500

lost 2.2%. Clinton's admission of the affair last August was seen at the time as a contributor to the summer decline. And while those in the U.S. have long believed that the efforts to remove the president would eventually fizzle, foreign investors have been somewhat leery of the impeachment proceedings.

So with the news that none of the articles of impeachment may even garner a simple majority, much less the 67 votes needed for passage, in the vote expected to come late today or tomorrow, you have to wonder whether there's some kind of relief rally in the offing.

In what is seen as a dangerous market, that may be enough to keep some people in the game. It may be enough to make some people hold off from selling. It may be one of the things that lent something like stability to the market yesterday and is lending something like stability to stocks this morning.

"The market has a decent tone after the pretty good showing we had yesterday," said Jim Volk, co-director of institutional trading at

D.A. Davidson

. "It was mostly technical, but there was also a sigh of relief that tech stocks didn't take another pummeling. I think we're going to be OK for at least a while."

At 9 a.m. EST, the S&P 500 futures were up 4.8, more than 2 above fair value and indicating some strength at the open. The 30-year Treasury was off 1/32 to 98 8/32, putting the yield at 5.37%, showing little response to January retail sales figures, which came in somewhat weaker the expected. Bond traders are now awaiting

Fed

chief

Alan Greenspan's

10 a.m. testimony before the

House Banking Committee

.

Hong Kong stocks rose, boosted by yesterday's gains on Wall Street, but trading was thin ahead of the New Year's holidays next week. The

Hang Seng

climbed 70.47 to 9146.80.

Tokyo markets were closed for Foundation Day.

European markets were higher. In Germany, the

Dax

was up 60.24, or 1.2%, to 4857.06. In Paris the

CAC

was up 34.74 to 4036.67. And in London the

FTSE

was up 62.5, or 1%, to 5832.7.

Thursday's Wake-Up Watchlist

By

Brian Louis

Staff Reporter

Federated Department Stores

(FD)

is buying

Fingerhut

(FHT)

, a direct marketing company. Under the deal, Fingerhut shareholders will receive $25 per share in cash under a tender offer expected to commence within a week. The deal is valued at about $1.7 billion, including debt.

Electronic Data Systems

(EDS)

and

MCI WorldCom

(WCOM)

set an information technology services pact valued at $17 billion. EDS will acquire

MCI Systemhouse

for $1.65 billion in cash. More than 12,000 employees, primarily in the U.S. and Canada, are expected to move from employment from MCI WorldCom and from Systemhouse to EDS.

Meanwhile, MCI WorldCom posted fourth-quarter earnings of 23 cents a share, excluding its investment in

Embratel

, a Brazilian long-distance carrier, beating the 21-analyst

First Call

view by a penny and up from the year-ago 10 cents.

A San Francisco jury Wednesday awarded $50 million in punitive damages to a longtime smoker, assessing the damages against the world's largest tobacco company,

Philip Morris

(MO) - Get Report

.

A federal judge granted a temporary restraining order aimed at ending

American Airlines'

Allied Pilots Association sickout, which has led to hundreds of American flight cancellations over the past few days. The dispute between the airline, a unit of

AMR

(AMR)

, and the pilots' union centers on how American will integrate 300 pilots from

Reno Air

(RENO)

into the 9,200-pilot American system.

In other news: (Earnings estimates are from

First Call

)

American International Group

(AIG) - Get Report

posted fourth-quarter earnings of 95 cents a share, beating the 18-analyst view of 93 cents and the year-ago 84 cents.

AT&T

(T) - Get Report

expects to close its acquisition of

TCI

(TCOMA)

soon after next week's special shareholder vote, the

Journal

reported, citing people familiar with the matter. AT&T is prepared to press ahead even if some municipalities haven't approved the deal, the

Journal

said.

CBS

(CBS) - Get Report

and

SportsLine USA

(SPLN)

extended by five years their equity-for-promotion exchange that created

CBS SportsLine

. CBS' stake in Sportsline USA has increased 18%, which could grow to more than 27%. The extended agreement provides for the

CBS Television Network

to promote CBS SportsLine during

CBS Sports

broadcasts pursuant to a promotional schedule that is projected to have a value in excess of $100 million over the five-year extension term.

Gabelli Asset Management's

(GBL:NYSE) 6 million-share IPO priced within range Wednesday at $17.50 a share by

Salomon Smith Barney

. (

TheStreet.com

wrote about the offering

last night.)

A host of other offerings were priced last night and will begin trading today, including

Korn/Ferry

(KFY:NYSE),

Prodigy

(PRGY:Nasdaq),

Healtheon

(HLTH:Nasdaq),

VerticalNet

(VERT:Nasdaq), and

Catapult Communication

(CATT:Nasdaq).

Navistar

(NAV) - Get Report

posted first-quarter earnings of 91 cents a share, beating the five-analyst view of 83 cents and the year-ago 42 cents.

Seagram

(VO) - Get Report

posted second-quarter earnings of 5 cents a share, excluding a charge, beating the three-analyst view of 2 cents, but down from the year-ago 17 cents, which excludes charges.

Sun Microsystems

(SUNW) - Get Report

has committed more than $1.25 billion to help

America Online

(AOL)

buy

Netscape

(NSCP)

, a larger financing role than was earlier disclosed, according to Sun's

Securities and Exchange Commission

filings,

The Wall Street Journal

reported.