Updated from 3:34 p.m.

In an effort to settle an antitrust case brought by the Department of Justice,

Continental Airlines

(CAL) - Get Report

and

Northwest Airlines

( NWAC) reached an agreement in principle in which Northwest will sell back 6.69 million Class A shares of its stake in Continental for $450 million. Northwest, which bought the stock in 1998, will retain about 2.6 million Class B shares.

The two defendants in the suit plan to jointly petition the U.S. District Court for a seven-day delay in the court proceeding to allow the airlines to conclude definitive agreements. A final agreement is subject to the approval of the boards of Northwest and Continental, the Department of Justice and some third parties.

The U.S. District Court began the trial after the carriers, which code-share on domestic and international flights and link their frequent-flier programs, failed to reach an out-of-court settlement agreement. Continental closed down $3, or 5.8%, to $49; Northwest closed flat at $28.13.

3Com

( COMS) agreed to pay $259 million to settle a lawsuit filed in response to the company's acquisition of

U.S. Robotics

.

3Com said the terms of the settlement are a compromise reached through mediation. Neither 3Com nor the individuals named in the lawsuits admitted any liability.

The company closed the acquisition of U.S. Robotics in 1997. 3Com ended the day down 38 cents, or 2.2%, to $16.81.

Mergers, acquisitions and joint ventures

Avocent

( AVCT), which provides remote access to computers over networks, announced that it has agreed to buy

Equinox

for $57 million in cash. Avocent closed down $6.13, or 9.4%, to $58.75.

Broadcom

(BRCM)

, which makes gear for high-speed communications networks, said it will buy privately held chipmaker

SiByte

in a deal worth more than $2 billion. In a statement, Broadcom said it would issue up to 9.03 million shares in exchange for SiByte. Based on Friday's close of $222.38 for Broadcom shares, the deal is worth about $2.07 billion. About 5.6 million of the shares will be issued at the close of the acquisition, which is expected in about 60 days. An additional 3.7 million shares will be issued in the future to SiByte shareholders if certain performance goals are met. Broadcom closed down $3.38, or 1.5%, to $219.

CenturyTel

(CTL) - Get Report

signed a definitive agreement to sell 30 personal communication service, or PCS, licenses to

Leap Wireless International

( LWIN) for $205 million.

CenturyTel, a communications service company, said it will use the proceeds to reduce debt. The transaction is expected to close in the first quarter of 2001, subject to regulatory approval.

Leap said it also signed another definitive agreement to acquire wireless operating licenses covering about 520,000 potential customers in Evansville, Ind. Additionally, Leap entered into four nonbinding memoranda to acquire licenses in Peoria, Ill.; Utica, N.Y.; and Charleston and Huntington, W.Va. Details about the agreements were not disclosed.

CenturyTel closed down 44 cents, or 1.2%, to $36.69; Leap was down 31 cents, or 0.7%, to $47.13.

Hershey Foods

(HSY) - Get Report

announced that it would acquire the breath-freshener mints and gum businesses of

Nabisco Holdings

( NA) for $135 million. Hershey ended the day up $2.06, to 3.8%, to $56.38.

After Friday's Close

Consolidated Edison

(ED) - Get Report

asked the Connecticut Department of Utility Control to reconsider conditions such as rate freezes and write-offs imposed on its proposed merger with

Northeast Utilities

(NU)

.

While the regulators approved the merger Oct. 19, Con Ed said the conditions that came out of the preliminary ruling are burdensome. The department has 25 days to respond to Con Ed's petition and indicate whether it will reconsider its order.

The merger still requires approval from regulators in New Hampshire and from the

U.S. Securities and Exchange Commission

. It has already been approved by shareholders from both companies, the Federal Energy Regulatory Commission, the U.S. Nuclear Regulatory Commission and regulators in Pennsylvania, New Jersey, Massachusetts, Maine and Vermont. The merger would create the nation's largest utility, serving more than 6.5 million customers in the Northeast.

Con Ed closed up 6 cents, or 0.2%, to $34.94, and Northeast Utilities was down 13 cents, or 0.6%, to $19.94.

Cypress Semiconductor

( DCX) said it passed the $1 billion mark in revenue for 2000 and was on track for an annual revenue run rate of $1.6 billion.

The chipmaker said its projected run rate had a growth rate nearly double the broader semiconductor industry. Cypress closed up 94 cents, or 2.5%, to $38.63.

DaimlerChrysler's

( DCX) Chrysler Group will consolidate all advertising for its brands under one agency,

Omnicom's

(OMC) - Get Report

BBDO Worldwide unit.

Omnicom will set up a separate agency, called PentaMark Worldwide, under the deal, and give board representation to DaimlerChrysler. DaimlerChrysler closed down 35 cents, or 0.7%, to $47.27; Omnicom was up $1.31, or 1.5%, to $89.

ICN Pharmaceuticals

(ICN)

posted third-quarter earnings of 45 cents a share, in line with the three-analyst estimate and up from year-ago earnings of 39 cents a share. ICN closed up $1.25, or 3.6%, to $35.63.

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Earnings/revenue reports and previews

Consumer electronics retailer

RadioShack

(RSH)

announced that comparable-store sales boosted 10% in October. The retailer attributed the growth to strong sales of audio-video products and direct-to-home satellite television systems. RadioShack ended the day down $4.44, or 6.8%, to $60.56.

VA Linux Systems

( LNUX) warned that it sees a loss of 14 cents to 16 cents a share in the first quarter, excluding items, compared with a loss of 27 cents a share in the same period last year. The

First Call/Thomson Financial

survey of six analysts expected a loss of 9 cents a share.

The maker of software and computer operating systems attributed its wider-than-expected first-quarter losses to slower sales from dot-com-sector customers. Linux closed down $12.63, or 42.1%, to $17.38.

Office Depot

(ODP) - Get Report

, the No. 1 retailer of office products, said it expects fourth-quarter same-store sales to fall and said if weakness in desktops, laptops, monitors and printers continues, along with higher warehouse costs, sales will slip to the negative single-digit range.

Also, the retailer said it would incur a $2 million charge for the quarter to reorganize its call center. Expenses related to the call-center reorganization included a total charge of about $4 million, beginning in the fourth quarter and lasting over the following 12 months, to cover severance and other employee transition costs. It also would pay $22 million to upgrade its technology. Office Depot closed down 69 cents, or 9%, to $6.94.

After Friday's Close

Florida Rock

( FRK) said it's expecting fourth-quarter earnings to be between 57 cents and 60 cents, well below the First Call/Thomson Financial five-analyst estimate of 85 cents and the year-ago EPS of 67 cents.

The company blamed wet weather in August and September and start-up problems at its new cement plant for the missed earnings. The stock closed down $4.75, or 12.2%, to $34.13.

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Analyst actions

Lehman Brothers

cut

Circuit City's

(CC) - Get Report

fourth-quarter estimate to 75 cents from 79 cents, its 2000 EPS estimate to $1.23 from $1.27 and 2001 EPS estimate to $1.60 from $1.75. The firm said its third-quarter estimate is unchanged, but that it is taking a more cautious view going forward, believing that trends will worsen. The note said the lowered estimates were based on beliefs that business conditions haven't improved for Circuit City and sales continue to be soft. Circuit City ended the day down 50 cents, or 3.6%, to $13.50.

Upgrades

Beazer Homes

(BZH) - Get Report

: 2001 EPS UP to $5.90 from $5.40 at

Salomon Smith Barney

; and 2002 EPS UP to $5.90 from $5.50. Beazer closed up $1.81, or 6%, to $32.

Bergen Brunswig

(BBC) - Get Report

: 2001 EPS up to 77 cents from 70 cents at Salomon; 12-month price target UP to $13 from $11. Bergen ended the day up 56 cents, or 5%, to $11.81.

Downgrades

ResMed

(RMD) - Get Report

: DOWN to buy from strong buy at

SG Cowen

. ResMed ended the day down $3, or 8.4%, to $32.63.

Sprint PCS

(PCS)

: 12-month price target DOWN to $55 from $58 at Lehman; 2000 loss estimate increased to $1.95 from $1.92 and 2001 loss estimate was cut to 73 cents a share from 80 cents.

Morgan Stanley Dean Witter

cut its 12-month price target to $58 from $65. Sprint PCS ended the day down $1.56, or 5.5%, to $26.94.

True North Communications

( TNO): DOWN to hold from buy at

Credit Suisse First Boston

, due to loss of its

DaimlerChrysler

(DCX)

account. True North closed up $3, or 8.1%, to $40; DaimlerChrysler, as noted above, closed down 35 cents, or 0.7%, to $47.27.

Initiations

Aztar

( AZR): NEW outperform at Salomon; 12-month price target: $18. Aztar ended the day down 19 cents, or 1.3%, to $14.81.

Ciphergen Biosystems

( CIPH): NEW strong buy at SG Cowen. Ciphergen closed up 38 cents, or 1.1%, to $35.25.

Click2learn.com

( CLKS): NEW buy at

W.R. Hambrecht

. CLKS closed up 38 cents, or 2.3%, to $16.75.

Express Scripts

(ESRX)

: REINSTATED buy at CSFB; 12-month price target: $95. Express Scripts ended the day up $1.69, or 2.4%, to $71.38.

Fifth Third Bancorp

(FITB) - Get Report

: NEW buy at Salomon; 12-month price target: $65. Fifth Third Bancorp closed down 13 cents, or 0.2%, to $51.81.

Introgen Therapeutics

(INGN) - Get Report

: NEW strong buy at

Prudential Securities

; NEW strong buy at SG Cowen. The stock closed up $1.25, or 10.2%, to $13.50.

Penn National Gaming

(PENN) - Get Report

: NEW buy at Salomon; 12-month price target: $23. Penn National closed up 52 cents, or 3%, to $17.50.

W-H Energy Services

( WHES): NEW strong buy at CSFB; 12-month price target: $25. W-H ended the day up 98 cents, or 6.7%, to $15.80.

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Offerings and stock actions

Curagen

( CRGN) said that it would offer 4 million newly issued shares of common stock. Curagen closed down $3.88, or 5.97%, to $61.

After Friday's Close

Essential.com

withdrew its $86.3 million IPO, according to a

Securities and Exchange Commission

filing.

The Web site, which sells a range of energy and communications services, didn't give a reason for its withdrawal. The company had filed to be traded on the

Nasdaq under the ticker "ESSE."

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Miscellany

Litton

(LIT) - Get Report

said it plans to sell its Advanced Electronics group, which posted fiscal 2000 revenue of $1.6 billion and has 9,500 employees.

The division includes its navigation and electronic warfare business. The sale will enable Litton to focus on its commercial electronics and materials, information technology systems and U.S. Navy and commercial shipbuilding segments and will up its annual revenue to about $4.3 billion. Litton closed up $1.06, or 2%, to $54.06.

The

European Union

filed a civil case in the U.S. District Court for the Eastern District of New York against U.S. tobacco companies

Philip Morris

(MO) - Get Report

and

RJ Reynolds

( RJR) alleging they are involved in smuggling cigarettes into the 15-nation EU.

The European Commission said it was seeking an injunction to prevent further smuggling as well as get financial compensation for losses from unpaid customs duties and value-added taxes. Although it was not disclosed how much the EU is seeking in compensation, officials alleged the EU's revenue losses through cigarette smuggling were into billions of euros.

Earlier today, RJ Reynolds said it had not yet seen the lawsuit. Philip Morris closed down 13 cents, or 0.4%, to $34.88; RJ Reynolds was down 38 cents, or 1.1%, to $34.63.

After Friday's Close

BroadVision

(BVSN) - Get Report

joined the

Standard & Poor's 500 index today. It replaced

PaineWebber

( PWJ), which was recently bought by

UBS

(UBS) - Get Report

.

BroadVision closed up 19 cents, or 0.5%, to $35.94; PaineWebber was flat at $70; and UBS was up 62 cents, or 0.4%, to $142.62.

Novoste

(NOVT) - Get Report

and

Johnson & Johnson

(JNJ) - Get Report

separately won approval from the

Food and Drug Administration

for their devices using radiation to clear up a complication from angioplasty surgery that occurs when tissue grows around the tube used to prop open arteries, creating a new blockage. Novoste's product is called the Beta-Cath System; Johnson & Johnson's is the Checkmate. Novoste closed down $1.13, or 3.9%, to $28, while Johnson & Johnson was up 38 cents, or 0.4%, to $92.06.

Palm

( PALM) replaced

Global Crossing

(GBLX)

on the Nasdaq 100 index today.

Global Crossing moved to the

New York Stock Exchange

, where it is trading under the ticker "GX." Palm closed down $4.56, or 6.8%, to $62.38; GX was down 31 cents, or 1.5%, to $21.13.

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