Updated from 3:57 p.m. EDT

Merck

(MRK) - Get Report

shot up 6 1/8, or 9.6%, to 69 7/8, after it posted second-quarter earnings of 73 cents a share, topping the 26-analyst estimate of 69 cents a share and up from the year-ago 73-cent profit.

Nortel Networks

(NT)

, off 1 to 80 1/4, is in serious talks to sell its optical-parts unit to

Corning

(GLW) - Get Report

in a deal that could be worth more than $100 billion, according to

The Wall Street Journal

. Corning dropped 32 1/4, or 11.4%, to 251.

The article said the deal may be complicated, so talks could break down before an agreement. The transaction would be mainly a stock swap, resulting in Nortel's owning more than 50% of Corning, even though Corning would be the acquirer and would maintain its independence. The

Journal

says the situation could cause a problem because Corning is a supplier for several fiber-optic companies that might not be comfortable with Nortel's stake in the company.

Mergers, acquisitions and joint ventures

AT&T Wireless

(AWE)

, down 3/8 to 27 1/16, said it will buy an Indianapolis wireless property from

SBC Communications

(SBC)

for $530 million.

SBC said the sale resolves a spectrum-capacity issue created in the Indianapolis market, resulting from the proposed joint venture between it and

BellSouth

(BLS)

. BellSouth already has a wireless property in Indianapolis. SBC was up 3/16 to 43 3/16, while BellSouth down 3/16 to 39 15/16.

The company that puts the "grrrr" in beleaguered,

drkoop.com

(KOOP)

, which was down 1/8, or 7.8%, to 1 3/16, said it would consider an offer to combine with privately held

MillenniumHealth Communications

, but the company said Millennium's announcement of a transaction was "highly premature."

The online health-related services provider said in a statement it had received a nonbinding letter of intent from Internet health-care information company Millennium after news of the offer had been made public Friday morning. Drkoop.com said it did not authorize the statement, nor did it have any involvement in its contents. The letter describes a stock-for-stock transaction, requests a binding "no-shop" agreement from drkoop.com and a $1 million breakup fee, and makes any deal subject to material conditions, including due diligence.

General Electric's

(GE) - Get Report

GE Global eXchange Services unit and

Commerce One

(CMRC)

said they plan to form a business-to-business alliance. Commerce One will operate electronic marketplaces to be supported by GE's transaction processing, allowing more buyers and sellers to trade. The companies said they expect to sign definitive agreements for the alliance this summer. GE was down 3/8 to 53 3/4 and Commerce One was down 2 11/16, or 5%, to 50 11/16.

General Motors

(GM) - Get Report

and

Fiat

said they had finalized an alliance and equity investments in each other's auto companies. GM was down 11/16 to 59 5/16.

Lockheed Martin's

(LMT) - Get Report

ILS

joint venture was awarded orders for 13 rocket launches valued at about $1 billion, said

The Wall Street Journal

. Meanwhile,

Boeing

(BA) - Get Report

scored orders for roughly 110 commercial jetliners valued at more than $11 billion. The news helped boost Lockheed Martin 1/4 to 26 9/16 and Boeing 1 5/16 to 48 1/8.

Napster

, the developer of software that lets users download songs for free, announced that it has formed a research-and-development pact with online music company

Liquid Audio

(LQID)

. Under the agreement, Liquid Audio will provide consulting services for the MP3. Liquid Audio was up 1 5/8, or 15.1%, to 12 3/8.

Salomon Smith Barney

said that

Bear Stearns

(BSC)

seems "open-minded" to buyout offers. According to a Salomon Smith Barney research report, Bear Stearns CEO James Cayne said a potential bidder would have to be willing to pay $120 a share. Bear Stearns moved 3 9/16, or 7.7%, higher to 49 7/8.

Sun Microsystems

(SUNW) - Get Report

announced plans to acquire

Gridware

, a privately owned maker of resource-management software. Financial terms of the deal were not disclosed. Sun sunk 3 9/16 to 100 7/16.

United Technologies'

(UTX) - Get Report

Pratt & Whitney Space Propulsion

said it acquired

Space Power

, which produces electric propulsion systems for satellite orbit transfer. Terms weren't disclosed. United Technologies finished up the day up 5/16 to 59 1/16.

VoiceStream Wireless

(VSTR)

agreed to a $50.7 billion cash-and-stock takeover by

Deutsche Telekom

(DT) - Get Report

. Both boards approved the deal over the weekend,

The Wall Street Journal

reported people familiar with the matter as saying. The deal would give the cash-strapped wireless company a cash infusion to buy new telephone licenses.

The deal is expected to face intense scrutiny in Congress, where many legislators have expressed concern about the 59% stake the German government holds in Deutsche Telekom. Under terms announced early today, Deutsche Telekom said the German government's ownership would shrink to 45%.

Separately,

Sonera

(SNRA)

said it would sell its stake in Deutsche Telecom when it feels it is appropriate. Sonera Deputy CEO Kaj-Erik Relander said the company's interest in the German telecom giant was financial, not strategic.

The news wasn't helping VoiceStream, down 19 3/4, or 13.2%, to 130, or Deutsche Telekom, down 6 15/16, or 13.5%, to 44 9/16. Sonera got swept under, too. It fell 5 11/16, or 12.2%, to 40 15/16.

Back to top

Earnings/revenue reports and previews

American Express

(AXP) - Get Report

was down 2 3/16 to 57 1/16 after it announced second-quarter earnings of 54 cents a share, ahead of the 16-analyst 53-cent estimate and the year-ago 47-cent profit. The financial services company said second-quarter profits rose 15%, thanks to revenues from managing money for investors and increased consumer spending on its cards.

DaimlerChrysler

(DCX)

was down 1 1/2 to 53 9/16 after saying it would issue a financial performance warning for the second half of the year when it releases its second-quarter earnings this week, reported

The Wall Street Journal

. The auto-maker has faced problems in its U.S. operations, shelling out more than expected to attract Americans to Chrysler, Dodge and Jeep automobiles. Daimler agrees with the second-quarter six-analyst estimate of $1.52 a share, but is less comfortable with second-half expectations.

FTD.com

(EFTD)

said it would assume a noncash fourth-quarter $4.4 million charge as a result of development work on its Web site. President and CEO Michael Soenen said the charge would not interfere with the company's plan to be profitable by the fourth quarter of 2001. The stock tumbled down 15%, or 3/8, to 2 1/8.

Lands' End

(LE) - Get Report

warned investors that its second-quarter earnings would be down about 50% with flat sales. The catalog retailer sliced its fiscal 2001 sales outlook for the second time in two months to less than 6% and said it expects to post full-year earnings below the 11-analyst estimate of $1.90. Lands' End took another hit, falling 8 3/16, or 20.4%, to 31 15/16.

OGE Energy

(OGE) - Get Report

reported second-quarter earnings of 41 cents a share, missing the four-analyst estimate of 50 cents and down from year-ago earnings of 49 cents. The company attributed the decline in earnings to increased operating expenses at its OG&E unit. OGE slid 11 1/6 to 18 15/16.

E-commerce company

Priceline.com

(PCLN)

posted a second-quarter loss of 1 cent a share, beating the 19-analyst negative 3-cent estimate and the year-ago 10-cent loss. Additionally, the company said it was comfortable with analysts' forecasts that it would achieve profitability by the end of this year. Despite the positive reports, Priceline got smacked down 8 15/16, or 22.3%, to 31 1/18.

The CEO of

Smithfield Foods

(SFD)

said today the pork producer expects to report a fivefold increase in fiscal first-quarter earnings this year over last year. The

First Call/Thomson Financial

five-broker consensus is for 65 cents a share for the fiscal quarter ending July 30. It edged up 1/2 to 27 15/16.

Wisconsin Central

(WCLX)

was 1/8 lower to 12 3/8 after it said it's expecting second-quarter earnings in line with the eight-analyst estimate of 31 cents a share and down from year-ago earnings of 37 cents. The earnings expectation includes the effect of adjustments made by

English Welsh & Scottish Railway Holdings

, which will reduce Wisconsin Central's equity in second-quarter net income from English Welsh by about $8 million.

ZDNet

(ZDZ)

said it expects second-quarter earnings of 7 cents a share, beating the seven-analyst estimate by a penny, and up from year-ago earnings of 5 cents a share. Last week, the company agreed to be bought by

CNET

(CNET) - Get Report

. ZDNet was up 5/16 to 17 5/8 and CNET was up 5/16 to 31 1/8.

Back to top

Analyst actions

Banc of America Securities

(BAC) - Get Report

sliced its equity weighting in its portfolio to 65 from 70, and boosted bonds to 35% from 30%.

Upgrades

K-Swiss

(KSWS)

: fiscal 2000 EPS estimates UP to $1.70 a share from $1.30 at

Goldman Sachs

; fiscal 2001 EPS estimates UP to $1.90 a share from $1.45. The stock was down 1/2 to 17 1/4.

Molex

(MOLXA)

: class A shares UP to intermediate buy from accumulate at

Merrill Lynch

; fiscal 2001 EPS estimates UP to $1.33 from $1.28 a share. Molex rose 1 7/8, or 5.5%, to 36 1/4.

Downgrades

Covenant Transport

(CVTI) - Get Report

: DOWN to buy from strong buy at

Credit Suisse First Boston

. Covenant inched up 1/32 to 8 17/32.

Eastman Kodak

(EK)

: price target DOWN to 68 from 73 at

PaineWebber

. The company was down 2 1/4 to 55 3/4.

Lexmark

(LXK)

: DOWN to neutral from outperform at Salomon Smith Barney; fiscal 2000 EPS estimates DOWN to $2.60 from $2.72 a share; fiscal 2001 EPS estimates DOWN to $3.25 a share from $3.00; price target DOWN to 55 from 85. PaineWebber lowered its price target on Lexmark 75 from 145. The stock was 1 lower to 47.

Marvell Tech

(MRVL) - Get Report

: DOWN to buy from strong buy at CSFB. The stock sunk 6 9/16, or 10.7%, to 55.

Sprint PCS

(PCS)

: DOWN to neutral from buy at

Lehman Brothers

. It fell 2 23/32 to 59 5/32.

Initiations

Capstone Turbine

(CPST) - Get Report

: NEW intermediate-term accumulate, long-term buy at Merrill Lynch. The stock was lifted 2 15/16, or 5.1%, to 60 1/2.

CareScience

(CARE) - Get Report

was down 13/16, or 8.8%, to 8 7/16 after it was started as a NEW strong buy at

Deutsche Banc Alex. Brown

.

Genuity

(GENU)

: NEW intermediate, long-term buy at Merrill Lynch; strong buy at

UBS Warburg

; price target of 20 to 22; strong buy at

Morgan Stanley Dean Witter

; price target of 21. Salomon Smith Barney initiated coverage with a buy rating and a price target of 16. The stock was down 5/16 to 9 13/16.

Stratos Lightwave

(STLW)

: NEW intermediate-term, accumulate, long-term buy at Merrill Lynch; NEW buy at Lehman Brothers; price target: 70. Stratos dropped 5 9/16, or 11.4%, to 43 7/16.

Group Moves

Lehman Brothers rolled out coverage of two e-commerce stocks with buy ratings:

  • Click Commerce (CKCM) : DOWN 1 3/8, or 5.8%, to 22 3/8
  • Efunds (EFDS) : DOWN 3/4, or 7.2%, to 9 5/8.

Back to top

Offerings and stock actions

High-speed data networking equipment company

Avici Systems

raised the size of its initial public offering to 7 million from 6 million shares, while raising the range to $28 to $30 from $18 to $20, according to a

Securities and Exchange Commission

filing.

Blue Martini Software

(BLUE) - Get Report

raised the expected price range for its IPO to $16 to $18 from $11 to $13. The company said it still plans to offer 7.5 million common shares.

Mpower Communications

(MPWR) - Get Report

set a 3-for-2 stock split, but was down 3 3/4, or 6.8%, to 51 3/4 at the close.

NetFlix.com

, an online source for movie recommendations and DVD rentals, withdrew its planned $86 million IPO because of market conditions. The company had applied for a

Nasdaq listing under the symbol NFLX.

Selectica

(SLTC)

filed with the

Securities and Exchange Commission

for a 4 million-share secondary offering. Credit Suisse First Boston,

U.S. Bancorp Piper Jaffray

,

Wit SoundView

and

Banc of America Securities

are managing the deal. The stock was 3 1/4, or 5.2%, lower to 59.

Back to top

Miscellany

Elantec

(ELNT)

appointed Richard Beyer its new president and chief executive officer. Also, Beyer, who will join the company's board, replaces Jim Diller, the company's chairman, who is retiring. The stock ended the day off 2 1/2 to 75 3/8.

EMusic.com

(EMUS)

rose 32.8%, or 19/32, to 2 13/32 after it launched a subscription service that allows consumers to pay one monthly price to download as much music as they want from EMusic's digital collection of over 125,000 MP3s. The new service will financially compensate musicians and record labels for their work.

Honeywell's

(HON) - Get Report

aerospace division signed a series of customer agreements valued at almost $2.3 billion, based on catalog prices. Honeywell said the largest of the supply deals is a $2 billion, 30-year pact to supply engines for

Aermacchi's

advanced trainer equipment. The stock moved up 1/2 to 35 1/4.

IBM

(IBM) - Get Report

, off 2 1/4 to 112 1/2, launched a commercial model of what it calls the world's fastest computer. IBM said its

ASCI White

computer, which can process 12.3 trillion calculations a second, is a commercial model of the computer that was sold to the

Department of Energy

to simulate nuclear weapons tests.

NextCard

(NXCD)

said it has tapped John Hashman, president and CFO, as its new CEO. Hashman will replace Jeremy Lent, who will remain chairman, on Aug. 10. The Web credit-card provider said it would post break-even results in late 2001. NextCard was down 3/32 to 9 19/32.

USinternetworking

(USIX)

named Andrew Stern, executive vice president and chief operating officer, its chief executive, effective immediately. The company's co-founder, Christopher McCleary, will continue as chairman. The stock was 7/16 lower to 18 7/8.

Veritas DGC

(VTS)

, a manufacturer of geophysical and geological technologies for the petroleum industry, announced that Chief Executive Richard White has resigned after six months with the company. Executive Chairman David Robson will resume the CEO responsibilities. Veritas was down 2 7/8, or 11.4%, to 22 3/8.

Back to top

By the Numbers

The data on NYSE and Nasdaq percent winners and losers are filtered to exclude stocks whose previous day's volume was less than 25,000 shares; whose last price was less than 5; and whose net change was less than 1/2.

Dow point gain and loss data are based on New York closing prices and do not reflect late composite trading.

Back to top