Stocks Fighting to Keep Yesterday's Gains This Morning; Webvan Pulls IPO - TheStreet

Stocks Fighting to Keep Yesterday's Gains This Morning; Webvan Pulls IPO

The bond market continues to slosh, and that could put pressure on stocks.
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One day does not a range break.

Even with

yesterday's surprising strength, the market still has a lot of room to the upside before it starts testing resistance. Stocks could rally again -- and again, and possibly again -- without convincingly busting out of a trading range that, in the case of the

S&P 500

, is more than half-a-year old.

That said, the tone for stocks seems positive this morning -- perhaps strikingly so, given yesterday's strength and the see-sawing motions investors have grown to expect from the market. At 9:05 a.m. EDT, the S&P 500 futures were up 3.3 to 1337, a couple points above fair value and indicating a slightly positive bias to the open.

"The oversold condition on the

FOMC's rate announcement was extraordinary," said Ed Basile, director of futures trading at

Warburg Dillon Read

in Chicago, adding that "above 1319 the contract looks great." Basile cited 1345 as the first resistance level on the December contract: "I'm kind of thinking that things might take off here today."

Yahoo!'s

(YHOO)

blowout numbers after the close yesterday did a lot for those trying to forget the

Fed

and focus their attention on what are shaping up to be some extremely strong

third-quarter earnings.

General Electric

(GE) - Get Report

and

Costco Wholesale

(COST) - Get Report

have come out this morning with upside earnings reports.

Still, it's unlikely that traders will lose their heads today. Not with tomorrow's jobs report looming and ready to set the tone for the new round of arguments over whether or not the Fed will hike on Nov. 16.

Putting pressure right now on stocks is the bond market, which was continuing to shed points this morning after

failing yesterday to generate a relief rally from Tuesday's FOMC-inspired selloff. The 30-year Treasury was lately down 13/32 to 98 28/32, putting the yield at 6.208%.

Hong Kong stocks piggy-backed on yesterday's rally on Wall Street, though profit-taking late in the session kept gains moderate. After moving as much as 2% higher in early trading, the

Hang Seng

closed up 95.22, or 0.7%, to 13,113.20.

In Tokyo, the

Nikkei

closed above the psychologically key 18,000-level, advancing 240.13, or 1.3%, to 18,136.55. Stocks may have gotten a bit of a lift from some talk that the government will push for a larger supplemental budget than the

Ministry of Finance's

5.5 trillion yen proposal.

The yen's continuing softness against the dollar certainly didn't hurt stocks. The greenback spent much of the overnight session bouncing off the 108-yen resistance level, and was lately quoted at 107.73 yen.

Sentiment was also buoyed by signs that consolidation in the Japanese banking sector may be quickening. Today

Asahi Bank

and

Tokai Bank

set plans to accelerate their existing agreement to combine their operations under a joint holding company in fiscal 2001 or fiscal 2002. The banks now say that holding company will be formed by October of next year. Its assets of 59 trillion yen will make it Japan's third-largest bank behind the planned

Industrial Bank of Japan

-

Dai-Ichi Kangyo Bank

-

Fuji Bank

alliance and

Bank of Tokyo-Mitsubishi

.

The big European indices were all higher in the wake of uneventful meetings of the

European Central Bank

and the

Bank of England

. Frankfurt's

Xetra Dax

was up 51.34, or 1%, to 5404.66, while the Paris

CAC

was up 36.32, or 0.8%, to 4728.04. London's

FTSE

was up 110.3, or 1.8%, to 6207.8. As generally expected, both the ECB and the BOE left interest rates unchanged.

Thursday's Wake-Up Watchlist

By

Brian Louis

and

Tara Murphy

Staff Reporters

In response to

Securities and Exchange Commission

concerns,

Webvan

said it is postponing its initial public offering, originally slated for this week. According to a report in Thursday's editions of

The Wall Street Journal

, the SEC is worried about Webvan's possible failure to observe quiet-period restrictions in giving pre-IPO interviews to

Business Week

and

Forbes

as well as its alleged dissemination during road-show presentations of information not included in its prospectus. Details of the road show were brought to light by Adam Lashinsky's

column yesterday, which earned mention in today's

Journal

.

Webvan: Join the discussion on

TSC

Message Boards.

General Electric posted third-quarter earnings of 80 cents a share, a penny ahead of the

First Call/Thomson Financial

consensus estimate and up from the year-ago 69 cents. Revenue jumped to a record $27.2 billion, a 13% increase over the year-ago period.

Yahoo!, after the close, reported third-quarter earnings of 14 cents a share before charges, ahead of the First Call/Thomson Financial 26-analyst estimate of 9 cents a share, and up from the year-ago 2 cents before items.

Mergers, Acquisitions and Joint Ventures

Bell Atlantic

(BEL)

is acquiring $550 million of

Metromedia Fiber Network's

(MFNX)

optic infrastructure. Bell Atlantic will invest about $700 million to purchase about 9.9% of the equity of MFN via the purchase of newly issued shares at $28 a share. Also, Bell Atlantic will buy about $975 million in debt securities convertible into common stock at a conversion price of $34 per share, boosting Bell Atlantic's potential equity investment in MFN to about 19% of the company.

Earnings/Revenue Reports and Previews

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

Advanced Micro Devices

(AMD) - Get Report

after the close reported a third-quarter loss of 72 cents a share, narrower than the 18-analyst estimate of a loss of 97 cents but worse than the year-ago earnings of 1 cent.

Costco posted fourth-quarter earnings of 79 cents a share, beating the 22-analyst estimate of 76 cents and the year-ago 65 cents.

In Focus Systems

(INFS)

reported third-quarter earnings of 31 cents a share, beating the seven-analyst estimate of 23 cents and the year-ago 8 cents.

Offerings and Stock Actions

Goldman Sachs

priced

Calico Commerce's

(CLIC)

4 million-share IPO top-range at $14 a share.

Goldman priced

Neuberger Berman's

(NEU:NYSE) 7.25 million-share IPO at $32 a share.

Goldman priced

PlanetRx.com's

(PLRX)

6 million-share IPO top-range at $16. The company is an online destination for prescription drugs, herbs and other medical supplies.

TheStreet.com

wrote about PlanetRx.com in a story

this morning.

Shaw Group

(SGR)

announced plans for a 2.5 million-share secondary offering.

Morgan Stanley Dean Witter

priced 11.9 million ADRs of

Ultrapar

(UGP) - Get Report

at $13.50 each, the bottom of the estimated range. One ADR is equal to five ordinary shares.

Miscellany

DLJdirect

(DIR)

unveiled its plans to extend its trading hours in late October. The online broker said it would conduct pre-market trading between 8:00 a.m. to 9:15 a.m. ET, while holding post-close trading between 4:15 p.m. to 7:00 p.m. ET.

Goody's Family Clothing

(GDYS)

said September same-store sales rose 4.8%.

Sears

(S) - Get Report

posted a 4.1% increase in September same-store sales.

Analyst Actions

J.P. Morgan

lowered its rating on

Barnes & Noble

(BKS) - Get Report

to market perform from long-term buy.

PaineWebber

initiated coverage of

Concentric Network

(CNCX)

with a neutral rating.

PaineWebber initiated coverage of

Digex

(DIGX)

with a buy rating.

Merrill Lynch

raised its rating on

First Health Group

(FHCC)

to accumulate from intermediate-term neutral.

PaineWebber initiated coverage of

Globix

(GBIX)

with a neutral rating.

Merrill upped its intermediate-term opinion on

Health Management Associates

(HMA)

to intermediate-term accumulate from neutral.

Merrill raised its rating on

Ingersoll Rand

(IR) - Get Report

to intermediate-term buy from accumulate.

J.P. Morgan cut its rating on

Service Corp.

(SRV) - Get Report

to market perform from buy.

PaineWebber initiated coverage of

Verio

(VRIO)

with an attractive rating.