Stocks Geared Toward Positive Open

The Labor Department's upward revision of third-quarter productivity is hopping up the S&P 500 futures, though the bond market is reacting with more reserve.
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Some upward revisions to third-quarter productivity are giving the outlook for stocks a somewhat rosier hue than it had an hour ago.

The

Labor Department

said that productivity rose 4.9%, up from the initial 4.2% estimate. That's the highest rate since the fourth quarter of 1992. Labor also said that unit labor costs sank 0.2%, as opposed to the initial estimate of a 0.6% gain.

Higher productivity rates allow companies to produce more goods and services with the same amount of labor. That's good news for the market as long as growth remains under control. The upward revisions to productivity come after third-quarter

gross domestic product

was revised up to 5.5%, however.

After hovering around break-even for most of the morning, stock futures moved higher on the news. At 9:05 a.m. EST, the

S&P 500

futures were up 3.9, more than 3 points above fair value and indicating a positive open.

The sober bond market's reaction was more muted. The 30-year Treasury was up 2/32 to 98 17/32, putting the yield at 6.233%.

"I thought that if we got a number near 5% and unit labor costs printed OK, that could put some bids in the bonds, said Bill Meehan, chief market analyst at

Cantor Fitzgerald

. "We just need them

the bonds to hold some kind of green, and I think that's doable."

The market will be confronted by a wealth of

Federal Reserve

speakers, starting with Chairman

Alan Greenspan

, who will discourse on the GDP measure at 10 a.m. An hour later, Federal Reserve Bank of Chicago President Michael Moskow will hold a news conference on financial institutions and Y2K. Finally, at 11:35 a.m., Fed Bank of San Francisco President Robert Parry will speak on the Fed's role in the economy at a conference in Long Beach, Calif.

One day after surging on stronger-than-expected German factory orders data, the euro is holding its strength, helped by news that Hong Kong is raising the euro's weighting in its reserves to 15% from 10%. The head of the territory's monetary authority,

Joseph Yam

, told

The Financial Times

that he was concerned about the U.S. balance-of-payments deficit and the high equity values on Wall Street, which he fears may cause capital to flow out of the U.S.

The euro took off from $1.022 early this morning to assault the $1.03 level before easing back. It was lately quoted at $1.0218.

The large European bourses were moving up in early afternoon trading. London's

FTSE

was up 19.5 to 6713.5, while the Paris

CAC

was 42.56 higher to 5552.53. Frankfurt's

Xetra Dax

was up 39.05 to 6181.24 amid news that German GDP rose 0.7%, close to expectations.

In Tokyo, the

Nikkei

edged up 86.76, or 0.5%, to 18,593.96, though breadth in the broader market was solidly negative. The softness that the yen showed yesterday against the dollar, which largely held its gains overnight, helped sentiment some. Dollar/yen was lately quoted at 102.42, down from 103.08 late in New York yesterday.

Hong Kong's

Hang Seng

fell 95.53, or 0.6%, to 16,073.09. The index has earned a bit of consolidation -- it's up by nearly one-third since late October.

Tuesday's Wake-Up Watchlist

By

Eileen Kinsella

Staff Reporter

News Corp.

(NWS) - Get Report

and

Healtheon

(HLTH)

said they formed a $1 billlion partnership in which News Corp. will take a 10.8% stake in the online health network to move into the health programming arena. The financial terms include $700 million in branding services provided by News Corp. over 10 years and a $100 million purchase of Healtheon/WebMD stock at $50 a share. The alliance also includes a $100 million cash investment by News Corp. in an international joint venture and a $62.5 million five-year licensing agreement for syndication of WebMD daily broadcast content.

Mergers, acquisitions and joint ventures

BP Amoco

(BPA)

and

Exxon Mobil

(XOM) - Get Report

said they will dissolve their European joint venture. BP Amoco will buy Mobil's 30% stake in the venture for $1.5 billion.

The

European Commission

said it granted regulatory approval to the full buyout of Dutch company

Eurotronics

by

Avnet

(AVT) - Get Report

.

Vodafone AirTouch

(VOD) - Get Report

said it has chosen

Ericsson

(ERICY)

to supply its infrastructure for its next-generation network technology in Britain, the Netherlands and Greece. The General Packet Radio Service (GPRS) technology will let mobile customers access services such as train timetables, directions and online shopping.

Separately, U.S. regulators approved the planned combination of the U.S. wireless operations of

Bell Atlantic

(BEL)

and Vodafone, as long as the companies eliminate some overlapping properties, Bell Atlantic said.

Earnings/revenue reports and previews

H.J. Heinz

(HNZ)

reported second-quarter earnings of 65 cents a share, a penny better than the 17-analyst estimate and up from 60 cents a year ago. Heinz said it was comfortable with third-quarter estimates of 62 cents and fourth-quarter estimates of 63 cents. The current 15-analyst estimate from

First Call/Thomson Financial

is for 63 cents a share in each of those quarters. Heinz also said it was on track to deliver a year-end target of 6% to 7% earnings-per-share growth.

The

European Commission

said it cleared plans by Heinz's European unit to buy U.K.-based

United Biscuits'

frozen and chilled foods unit. The cost of the purchase, made in October, was $317 million.

Offerings and stock actions

Lehman Brothers

priced 5.8 million shares of

Harris Interactive

(HPOL)

at $14 a share, the top of the estimated $12 to $14 range. Harris is an online polling and market research firm.

Lehman Brothers priced 7.5 million shares of

HealthCentral.com

(HCEN)

at $11 each, the top of the expected $9 to $11 range. HealthCentral.com is an online health and fitness network.

Analyst actions

Donaldson Lufkin & Jenrette

cut

Coca-Cola

(KO) - Get Report

to a market perform from a buy.

Merrill Lynch

started coverage of

Corning

(GLW) - Get Report

with an intermediate-term accumulate, long-term buy rating. Merrill said it sees shares of Corning doubling within the next three years.

Miscellany

El Al Airlines

signed a $400 million deal with

Boeing

(BA) - Get Report

for three 777 planes.

Cendant

(CD)

is near an agreement to pay between $2.5 billion and $3 billion to settle a shareholder lawsuit charging it with fraud in regard to a 1998 accounting scandal,

The Wall Street Journal

reported.

Hasbro

(HAS) - Get Report

said it would cut 2,200 jobs, or 19% of its work force, and consolidate manufacturing, product lines and sourcing activities in a sweeping restructuring. Hasbro said it will close manufacturing plants in Tijuana, Mexico and Ashford, England. The company said it expects to post a fourth-quarter charge of $141 million from the consolidation, and also set a new $500 million share buyback plan.

A front-page story in

The Wall Street Journal

examines an unusual breed of daytraders, who continuously trade a single stock, irrespective of the company's revenue, profits, news developments or strategies. For instance, the story cites one trader, who, in a single day, trades trade more than 130,000 shares of

CMGI

(CMGI)

, accounting, by himself, for nearly 2% of the company's total daily volume. The aim for such traders is to determine when big, institutional players are buying or selling stock in volume, and act accordingly.

The "Heard on the Street" column in the

Journal

takes a look at a spat between

FTD.com

(EFTD)

parent, IOS Brands and

Bankers Trust

, a unit of

Deutsche Bank

. In a suit which will be heard in New York federal court, FTD has accused Bankers Trust of improperly forcing its way into FTD's newly public Internet subsidiary, FTD.com, by demanding and receiving warrants in the parent during negotiations over a previous FTD financing.