Stock Futures Lower, Travelers Will Buy Salomon for $9B

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It could be another sloppy open for stocks this morning.

"It looks like we're going to continue to limp around here for a while," says Bill Meehan, chief market analyst at

Cantor Fitzgerald

. Meehan is counseling clients to be buyers of tech on any signs of weakness, particularly companies that are due to present at the

Mongomery

conference in San Francisco.

Overnight, influential Japanese finance minister

Eisuke Sakakibara

, aka Mr. Yen, said that last weekend's currency statement out of the

G7

meeting was a Group of Seven agreement to send "a strong message for the yen and the dollar." He went on to ask: "Does the market understand that?" That sent the dollar down over 2 yen to 119.86. But the bond market is weathering both the currency pressure and pressure ahead of this afternoon's 5-year note auction rather well. The 30-year Treasury bond is down 1/32 at 99 25/32, putting the yield at 6.39%.

As of 9:00 a.m. (EDT), the

S&P 500

futures are down 0.80, near fair value and indicating a mixed open.

But the big news on Wall Street is that

Travelers

(TRV) - Get Report

will buy

Salomon

(SB) - Get Report

for about $9 billion, or about 81 a share. Salomon closed at 71 1/2 on Monday and Travelers closed 72 1/16. Under terms of the deal, Salomon will receive 1.13 Travelers shares for each Salomon share.

There was a pretty big bump in Salomon trading volume over the last two sessions. "It looks like more than a few people had a good idea of what was going on," says Meehan.

Merger speculation could heat up today after

Royal Dutch Petroleum's

(RD)

for $61.50 per share, or $1.45 billion, in cash last night. In an article in the

Houston Chronicle

,

Prudential Securities

analyst Carol Coale noted that the industry, which up to now has favored strategic alliances, may now favor acquisitions.

One man's poison is another man's meat. In this case, the poison is the federal appeals court decision, reversing an earlier decision, that

Avant!

(AVNT)

not sell it

ArcCell

products pending

Cadence Design Systems'

(CDN)

. While Avant! is trading down 9 1/16 at 24 on

Reuters Instinet

, Cadence is expected to trade higher this morning.

In a press release, Avant! pooh-poohed the court decision, saying that it no longer sells ArcCell, and that sales of its flagship product, Aquarius, will not be affected by the decision, Cadence contends that "Avant! re-named its ArcCell products Aquarius and Aquarius XO." The court asked a lower court to take a look at Aquarius and see if it contains any of Cadence's code.

In reporting its first half earnings today,

Gucci

(GUC)

IPO will be a feature of today's trading. The company is offering 17.5 million shares priced at $17, the top of the range.

Bear Stearns

is the lead underwriter.

In London,

BTG

said that

SmithKline Beecham

(

(SBH) - Get Report

SBH ADR) has started phase III trials for idoxifene, an osteoporosis treatment. BTG sold an exclusive license for the drug to SmithKline in 1994.

Despite the hit on the dollar, Japanese stocks rose in expectation that any downturn against the yen would be well-contained and short-lived. Global blue-chips, beneficiaries of a stronger dollar, traded higher. The

Nikkei

closed up 218.76 at 18,420.08.

Hong Kong stocks gained in thin and choppy trade. The

Hang Seng

closed up 111.06 at 14,205.44.

After the dollar's weakness spooked Frankfurt's export oriented stock market in the early going, German stocks managed to claw their way back. The

Dax

closed at 4102.39, up 4.19.

After yesterday's selling, British stocks are moving higher again. The

FTSE

is up 28.70 at 5056.20.