Market Outlook Is Bully for Stocks

The S&P 500 futures are indicating positive sentiment; in London, the Bank of England leaves interest rates unchanged.
Publish date:

Get ready for another rally.

At 9:05 a.m. EST, the

S&P 500

futures were up 9, about 9 points above fair value, indicating a strong open.

You couldn't have called

yesterday's puny decline much of a breather for the

Nasdaq Composite Index

, even though that measure's largest constituents -- such as


(MSFT) - Get Report



(CSCO) - Get Report



(INTC) - Get Report


MCI WorldCom


-- were roundly lower. But the technology sector hasn't really needed to come up for air too often lately, and, besides the host of overbought signals the market has been living with contentedly for weeks, there doesn't seem to be anything to change that trend today.

Meanwhile, the broader large-cap market has been ranging for about three weeks now, the S&P 500 having encountered tough resistance above 1400. "After the last

three days of really going down without any bounce-back, it looks like the market wants to do that today," said Charles Farra, president of

Global Trading LLC


Since about 10 a.m. last Friday, after the release of the November jobs report, the S&P 500 futures "have been grinding pretty methodically downward," Farra said. "It looks like they'll be breaking through that this morning."

Bonds were creeping higher, with the 30-year Treasury up 5/32 to 98 24/32, putting the yield at 6.217%. The

Labor Department

has reported that, in the week ended Dec. 4, initial jobless claims rose to 293,000 from the previous week's revised 292,000. But those numbers aren't moving the bond market, which is looking ahead to tomorrow's

Producer Price Index


The large European bourses were rebounding from yesterday's downdraft in early afternoon trading. Frankfurt's

Xetra Dax

was up 30.81 to 6146.40, while the Paris


was 33.02 higher to 5520.14.



was up 24.3 to 6643.7 after the

Bank of England's

Monetary Policy Committee, as expected, made no decision to raise interest rates.

After holding tightly to the $1.027 level in overnight trading, the euro has started to falter. It was lately quoted at $1.0176.

In Tokyo, the


sank 140.48, or 0.8%, to 18,260.72. The dollar ranged against the yen overnight, with the Japanese foreign exchange market keeping quiet ahead of Monday's


, the

Bank of Japan's

quarterly survey of business confidence.

Dollar/yen moved up from 102.9 to 103.26 before weakening. The greenback was lately quoted at 102.46 yen.

In Hong Kong, after two straight days of consolidation, stocks snapped back into the rally mode that, like U.S. equities, they've been in since mid-October. The

Hang Seng

gained 381.57, or 2.4%, to 16,370.95.

Thursday's Wake-Up Watchlist


Eileen Kinsella

Staff Reporter

Mergers, acquisitions and joint ventures






announced a five-year strategic alliance to develop genomics-based antibody drugs.

Nortel Networks


is nearing a deal to acquire


for $2.5 billion to $3.5 billion in stock,

The New York Times

reported, citing executives close to the talks. Qtera is underwritten by a group of venture capitalists and is involved in developing the next generation of optical communications technology. The executives said a deal could be announced within a week but cautioned talks could still fall apart.



said it will buy the

George Foreman Appliances

trademark for $113.75 million. Salton said it will issue $23.75 million in shares to George Foreman and its partners.

Earnings/revenue reports and previews


(COST) - Get Report

reported first-quarter earnings of 56 cents a share including charges, a penny above the 19-analyst estimate of 55 cents, and up from the year-ago 46 cents a share, excluding items. Costco said its board approved a 2-for-1 stock split with shareholders receiving an additional share of common stock for every share held on the record date of Dec. 24.

Cyberian Outpost


posted a third-quarter loss of 36 cents a share, narrower than the six-analyst estimate, but wider than the year-ago loss of 34 cents a share.

Esterline Technologies


reported fourth-quarter earnings of 37 cents a share excluding a gain, beating the four-analyst estimate of 35 cents but down from the year-ago 53 cents.

Offerings and stock actions

Eastman Kodak


said it will increase its share buyback program by $200 million, bringing the 1999 program total to $900 million.

Credit Suisse First Boston

priced 6 million shares of



at $11 each, above the estimated $8 to $10 range.

Robertson Stephens

priced 5.4 million shares of

Interep National Radio Sales


at $12. New York City-based Interep represents over 2,000 radio stations selling commercial air time to national and regional advertisers.

Merrill Lynch



(JAZZ) - Get Report

offering of American depositary receipts at $17.447 each, or 17 euros. Each ADR is equivalent to one share.

Analyst actions

Donaldson Lufkin & Jenrette

raised its rating on

Duke Energy

(DUK) - Get Report

to a buy from market perform, and upped

Peco Energy

(PE) - Get Report

to a top pick from market perform.


An internal audit has turned up "various accounting issues" at

Baker Hughes'



unit, the company said late yesterday. Baker is in the process of quantifying the extent and impact of these issues on its financial statements, but said the cumulative pretax impact of these issues could be in the range of $40 to $50 million.

Prior quarter results may have to be restated, Baker said in the release, and in light of the circumstances, it has postponed a $200 million debt offering. Morgan Stanley cut its rating on Baker Hughes to neutral from outperform.


(NOK) - Get Report

said U.S. investment adviser

Janus Capital

, through its clients, has raised its stake to 6.53%. Finland has a disclosure threshold for shareholdings of 5%.



said it will invest $30 million to create 250 new jobs and a supply chain integration center at its Dublin facility.

The "Heard on the Street" column in

The Wall Street Journal

takes a look at the compensation of Internet analysts on Wall Street in light of 1999's success. The story looks at

Morgan Stanley Dean Witter

Internet analyst

Mary Meeker

, who stands to earn a 1999 compensation package of as much as $15 million, illustrating how the oversize pay associated with all things dot-com reaches far beyond venture capital shops and Internet start-ups.

As originally published this story contained an error. Please see

Corrections and Clarifications.