Snapback Looks Unlikely for Stocks

The market has largely recovered from this morning's Cisco shock, but the S&P 500 futures are still pointing toward a lower opening.
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Yesterday's selloff doesn't seem to have run its course yet.

At 9:05 a.m. EST, the

S&P 500

futures were off 5.8, about 3.5 points below fair value and indicating a tilt toward a lower opening for stocks.

That's not necessarily a bad thing, mind you -- an early selloff could help flush things out on the downside some. Since reflexive snapbacks often have difficulty holding through the session, it's risky to chase them higher. On the other hand, technically speaking, there's a heck of a lot of flushing that could be done in certain technology and Net stocks.

"This is a little repentance here," said Doug Myers, vice president of equity trading at

IJL Wachovia

. "There definitely was some concern over the

Nasdaq

pullback. But a lot of people are pointing out that the Nasdaq and the

Dow

have been diverging. At some point, they'll re-converge."

Meanwhile,

Cisco

(CSCO) - Get Report

has turned heads after saying in a 10-Q last night that its net sales could grow at a slower pace. The statement is a standard qualification the company has put in its quarterly reports before. But it doesn't take much to spook investors in a company with a P/E close to 170 on a trailing basis -- a lofty level that is largely justified by Cisco's rampant growth rate.

The bond market, which got roughed up yesterday by a somewhat hot

retail sales report, and which consequently put a drag on equities, is looking quite a bit quieter this morning. The 30-year Treasury was lately off 2/32 to 97 17/32, putting its yield at 6.309%.

The large European bourses were moving lower in early afternoon trading. Frankfurt's

Xetra Dax

was down 17.60 to 6170.39, while the Paris

CAC

was 68.60 lower, or 1.2%, to 5495.87. Stocks were tanking in London, where the

FTSE

was down 87.5, or 1.3%, to 6614.6.

The euro inched further back toward parity with the dollar overnight. The European currency weakened from the $1.005 level overnight, and was lately sitting at $1.0018. As expected, the

European Central Bank

left euro-zone interest rates unchanged at its fortnightly meeting.

Hong Kong stocks got hammered in the backdraft of yesterday's technology selloff on Wall Street. The benchmark

Hang Seng

lost 457.39, or 2.8%, to 15,825.31.

Things went considerably better in Tokyo, where stocks rallied from early losses, though they couldn't hold those gains late in the session. The

Nikkei

fell 27.19 to 18,138.36.

The dollar held its firmer tone against the yen, rising as high as 103.7 in overnight trading. The greenback was lately quoted at 103.53 yen, near its level late in New York trading yesterday.

The day's economic data in Japan weren't helping the yen any. The government revised October industrial production down to minus 2.7% from minus 2.3%, while Tokyo department store sales recorded a 4.7% year-over-year decline.

Wednesday's Wake-Up Watchlist

By

Tara Murphy

and

Brian Louis

Staff Reporters

Here's something for the much ado about nothing category. Reports that

Cisco

(CSCO) - Get Report

said it expects "that in the future, our net sales may grow at a slower rate than experienced in previous periods, and that on a quarter-to-quarter basis, our growth in net sales may be significantly lower than our historical quarterly growth rate," according to its

10-Q

filing with the

Securities and Exchange Commission

filed yesterday, hurt the stock ahead of the open. However, the language cited in reports has been standard language for the company in recent SEC filings.

Oracle

(ORCL) - Get Report

reported second-quarter earnings of 26 cents a share, beating the

First Call/Thomson Financial

30-analyst estimate of 22 cents and the year-ago 19 cents. For more on Oracle's

earnings, check out the coverage provided by

TheStreet.com/NYTimes.com's

joint newsroom.

Boeing

(BA) - Get Report

will announce firm orders for 120 planes valued at about $8.5 billion,

The Wall Street Journal

reported, citing execs close to the deals. The

Journal

reported that the announcement from Boeing could come as early as today.

Mergers, acquisitions and joint ventures

Ariba

(ARBA)

is negotiating to acquire closely held

Tradex Technologies

for approximately $1.65 billion, the

Journal

reported.

Bergen Brunswig

(BBC) - Get Report

said it has inked a five-year primary source pact with

Duane Reade

(DRD) - Get Report

. Bergen Brunswig said Duane Reade would purchase roughly $1 billion in products throughout the life of the agreement.

CMGI

(CMGI)

said it would acquire

Yesmail.com

(YESM)

for stock. CMGI said it would issue 0.1252 CMGI shares for each share of Yesmail.

Circuit City

(CC) - Get Report

and

America Online

(AOL)

have entered an agreement which calls for Circuit City to market AOL's products and services in its store.

DPL

(DPL)

announced its plans to sell its natural-gas distribution division for $425 million.

General Motors

(GM) - Get Report

has launched a $5.3 billion to $6.2 billion offer for the financially floundering

Daewoo Motors

, the

Yonhap

news agency reported,

Reuters

said.

KLM Royal Dutch Airlines

(KLM)

and

Continental Airlines

(CAL) - Get Report

said they have agreed to a joint marketing pact. The announcement is seen as progress toward a global alliance between Continental, KLM,

Northwest

(NWAC)

and

Alitalia

. The pact includes passenger and baggage check-in and exchangeable frequent flyer program participation.

Lucent Technologies

(LU)

and

General Instrument

(GIC)

said they have agreed to a joint development and marketing deal to design a system for telephone service over cable lines. The two companies said they would combine the software that runs their equipment.

Motorola

(MOT)

and

Redback Networks

(RBAK)

have teamed to provide an end-to-end system to reduce the time it takes cable providers to activate new subscribers for cable Internet access.

Nortel Networks

(NT)

said it has agreed to acquire

Qtera

, in a stock deal valued at up to $3.25 billion. Nortel said the price of the deal would be partly determined on Qtera meeting "certain business objectives." The acquisition would not add to fiscal earnings until 2001.

Rexall Sundown

(RXSD)

said it has entered an agreement to purchase closely held

MET-Rx Nutrition

, in a deal valued at $108 million.

Earnings/revenue reports and previews

(Earnings estimates are from First Call/Thomson Financial.)

Boston Scientific

(BSX) - Get Report

said it expects fiscal 2000 sales growth to slow to about 8% and set an earnings-per-share target for the year of $1.20.

Offerings and stock actions

Citizens Utilities

(CZN)

said it set a share repurchasing plan for up to $100 million.

Oakley

(OO)

said it has set a $20 million share-repurchasing program.

Miscellany

Dun & Bradstreet

(DNB)

is expected to vote on management's plan to split its

Moody's Investors Service

unit into a separate firm, people familiar with the matter said, according to the

Journal

.

A group of U.S. and French farmers filed a class-action lawsuit in federal court in Washington against

Monsanto

(MTC) - Get Report

, charging it with attempting to monopolize genetically modified crops and with not thoroughly testing the products for safety. Monsanto said the allegations are "absolutely baseless."

Viacom's

(VIA) - Get Report

MTV Networks

is under investigation by the

Justice Department

for alleged antitrust violations in dealings with big music companies, the

Journal

reported.