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Selling Sweeps the Overseas Markets

And unfortunately for the bulls, the bond market is not on their side today.

That shares are indicated lower this morning is not the issue: When stocks see a sharp move down like they did late yesterday, the selling usually carries over into the following morning.

What Wall Street wants to know is what will happen next. The program selling did some heavy damage to the charts that futures traders -- who exert a lot of influence on the market in thin times like these -- have been looking at. Yesterday they were talking about a possible run to the old highs. Today, they're talking about a run to the old lows. Much depends on whether stocks can hold their ground on the initial drop.

Unfortunately for the bulls, the bond market is not on their side today. With a two-year auction this afternoon and worries about corporate supply unabated, Treasuries are again under pressure.

"Private America is running to the market," said Bill Allyn, head of block trading at

Jefferies

. "They want to get in while the getting's good," issuing debt before the expected rate hike at the end of the month.

Allyn thinks that there's little reason for investors to put fresh money into equities right now. "To just be in the market and be pushed along could be dangerous," he said. "The market's going to be squirrelly until the

FOMC

meeting."

At 9 a.m. EDT, the

S&P 500

futures were down 7.1, about 6 below fair value. The 30-year Treasury was down 21/32 to 88 7/32, lifting the yield to 6.12%.

The slide in New York prompted a round of profit-taking in Asian markets.

Tokyo's market saw the global blue-chips -- beneficiaries of the government's weak yen stance -- take back some of their recent gains, while high-techs tracked the

Nasdaq's

slide. The

Nikkei

dropped 190.87, or 1.1%, to 17,586.75.

The

Hang Seng's

breach of the 14,000 level yesterday prompted some nervousness in Hong Kong. At the close of a volatile session, the index was off 28.84 to 13,976.04.

Frankfurt's

Xetra Dax

was down 62.23, or 1.1%, to 5406.44, with a focus on carmakers.

Volkswagen

was down 2.6% on a

TheStreet Recommends

Financial Times

report that the company has asked

Salomon Smith Barney

to look into a possible acquisition of Swedish truckmaker

Scania

. Meanwhile,

DaimlerChrysler

(DCX)

denied a report in a Swedish newspaper that it has bid $17.8 billion for what's left of

Volvo

.

In Paris, the

CAC

was down 62.04, or 1.4%, to 4476.

The late-day slide on Wall Street and the drops in Asia prompted selling in London. Also hurting shares was a reversal in the price of

Lloyds TSB

. The bank had been up early in reaction to its planned acquisition of

Scottish Widows Fund & Life Assurance

, but turned tail as investors worried that the 7 billion-pound ($11.1 billion) price tag is too steep. It was lately down 1.9%

The

FTSE

was down 66.1, or 1%, to 6486.3.

Wednesday's Wake-Up Watchlist

By

Brian Louis

Staff Reporter

  • CMGI (CMGI) is in discussions to acquire AltaVista and other Internet assets from Compaq (CPQ) , according to news reports. The Wall Street Journal reported that CMGI could buy AltaVista and other Compaq Internet assets for $2 billion to $3 billion. A deal could be announced as early as tomorrow, the Journal reported, citing people familiar with the situation, though the talks could still fall apart. CNBC reported on the talks yesterday.
  • Metromedia Fiber Network (MFNX) is acquiring AboveNet Communications (ABOV) for roughly $1.6 billion in stock. Under terms of the deal, AboveNet common stock shareholders will receive 1.175 Metromedia Class A common shares for each AboveNet common share. Based on Metromedia's closing price yesterday of 42 1/2, the deal values each AboveNet share at roughly $49.94, a hefty premium over its closing price yesterday of 36 3/4.
  • In its first earnings report as a publicly traded company, Goldman Sachs (GS) - Get Goldman Sachs Group, Inc. (GS) Report posted second-quarter pro forma operating earnings of $1.30 a share. The First Call 11-analyst forecast called for the firm to earn $1.07. In other news (earnings estimates are from First Call):
  • Morgan Stanley Dean Witter priced Ariba's (ARBA:Nasadq) 5 million-share IPO above-range at $23. Ariba's software is used to automate purchasing of operating resources such as office supplies and computer products.
  • Chase (CMB) , First Unionundefined and Wells Fargo (WFC) - Get Wells Fargo & Company Report are forming a new company that will allow people and businesses to receive and pay bills electronically. The new company, to be called The Exchange until the naming process is complete, will begin operating by year-end.
  • Citigroup (C) - Get Citigroup Inc. Report is gearing up for a new push into online territory with fresh Internet-based services tailored to the company's retail banking, brokerage and credit-card businesses worldwide, the Heard on the Street column in the Journal reported. The column says the effort is expected to begin in earnest in the fall and marks a late response to the growth of both online brokerage firms and virtual banks.
  • Crown Cork & Seal (CCK) - Get Crown Holdings, Inc. Report warned it expects to report earnings of 75 cents to 77 cents a share in the second quarter, as compared to the company's previous guidance of up to 90 cents and below the eight-analyst consensus estimate of 92 cents. The company expects to earn between $2.20 and $2.25 a share for the full year. The eight-analyst view projected the company would earn $2.42 for the full year.
  • As part of an effort to expand its business beyond direct sales of computers, Gateway (GTW) is in early talks to acquire EarthLink Network (ELNK) , the Journal reported, citing people close to the situation. Earthlink stock soared yesterday 9 5/8, or 20%, to 57 1/4 on market chatter that Gateway might make a buyout offer for the company.
  • BancBoston Robertson Stephens priced GlobeSpan's (GSPN:Nasdaq) 3.25 million-share IPO top-range at $15. The company is a developer of advanced digital subscriber line integrated circuits.
  • Healtheon (HLTH) , an e-commerce provider for healthcare, and Yahoo! (YHOO) set a content and marketing pact.
  • Qwest Communications (QWST) is close to increasing its bids for U S West (USW) and Frontier (FRO) - Get Frontline Ltd. Report, the Journal reported, citing people close to the situation. U S West on Monday -- like Frontier did last week -- decided to take no action on Qwest's bid and reaffirmed its plan to merge with Global Crossing (GBLX) . In March, Global Crossing said it would acquire Frontier. In May, Global Crossing and U S West agreed to merge. On June 13, Qwest offered to buy U S West and Frontier in separate transactions.
  • 3Com (COMS) posted fourth-quarter earnings of 24 cents a share, a penny above the 25-analyst view and ahead of the year-ago 18 cents. But the company's CFO said 3Com's revenue for the first and third quarters of 2000 is expected to come in below year-ago figures.