Stocks Look Rampant This Morning After Soft Jobs Report

As expected, Warner-Lambert take no action on Pfizer's unsolicited $80 billion takeover offer.
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A softer-than-expected jobs report has put stocks right back into rally mode.

Today's Market: Join the discussion on our

message boards.

The

Labor Department

reported that nonfarm payrolls increased 310,000 in October, essentially in line with expectations. That's a big relief to a market that had been

bracing itself for a big number after an

exceptionally soft September report, due in large part to Hurricane Floyd.

More important than the seasonally skewed headline number, however, are

average hourly earnings, which rose only 0.1% vs. expectations for a 0.3% rise. That's overshadowing a drop in the unemployment rate to 4.1% from 4.2%, where economists had expected it to stay.

Stock futures and bonds were rallying hard on the news. At 9 a.m. EST, the

S&P 500

futures were up 20.2 about 20 points above fair value and indicating a very strong open. The 30-year Treasury was up 1 1/32 to 101 11/32, putting the yield down to 6.027%. The December bond futures were up 28 ticks to 114 21/32.

Traders were excited about the upside. "This changes everybody's sentiment," said Jim Benning, a trader at

BT Brokerage

. "It shows there's basically no inflation out there. I'd be surprised to see the Fed make a move at its next meeting."

"It looks like the correction from September and October is done," he continued. "If it

the market closes the way it looks like it's going to open, that could put the final nail in the coffin."

That's how the market is reading the report. What ultimately matters, though, is how the

Fed

reads it. There's been a growing amount of talk about the Fed standing pat on Nov. 16, while a

Reuters

poll conducted last Friday showed a slim majority -- 18 of 30 -- of primary dealers predicting a rate hike. Unfortunately, today's news of modest wage gains against a backdrop of the continued extreme tightness in the labor market doesn't do much to clear up the picture.

The biggest corporate news out today is

Warner-Lambert's

(WLA)

refusal to take action on

Pfizer's

(PFE) - Get Report

unsolicited $80 billion takeover offer in favor of its existing deal with

American Home Products

(AHP)

. Pfizer yesterday filed suit against Warner-Lambert and AHP in Delaware, charging that the breakup fee and lockup option in those companies' merger agreement are illegal.

In other news, Internet analyst Danny Rimer is leaving

Hambrecht & Quist

(HQ)

to join

The Barksdale Group

, a VC firm established by three former Netscape executives.

TheStreet.com

broke

the story last night.

Meanwhile, U.S. District Judge Thomas Penfield Jackson is expected to issue his preliminary ruling in the government's antitrust case against

Microsoft

(MSFT) - Get Report

later today.

Back in the old country, the jobs report was sending the large European proxies flying higher in early afternoon trading. London's

FTSE

was up 49.4 to 6380.7, while the Paris

CAC

was 26.52 higher to 4970.26. Frankfurt's

Xetra Dax

was up 26.89 to 5662.51.

Stabilizing from yesterday's damage, the euro was lately trading at $1.0409, up from the $1.0377 it was quoted at late in New York trading.

In Tokyo, continued buying in technology and telecom stocks couldn't stave off broad profit-taking late in the session. The

Nikkei

followed up yesterday's 2% advance by adding a modest 6.77 to 18,354.90.

The yen receded against the dollar in Tokyo trading, partly on news that the

Bank of Japan

will buy government debt from the

Ministry of Finance's

Trust Fund Bureau. It should be noted that the BOJ's action isn't aimed at expanding money supply, but rather at giving the Trust Fund Bureau the cash it will need to meet upcoming redemptions.

The dollar climbed from the 104.65-yen level toward nearly 105.7 yen overnight, and was lately trading at 105.82 yen.

Hong Kong stocks consolidated after their furious rally in the previous session, the

Hang Seng

falling 41.24, or 0.3%, to 13,610.27. An unexpected loss announcement by

Cable & Wireless HKT

, Hong Kong's largest telecom firm, didn't do much for sentiment. Some market observers are also blaming the government's

Tracker Fund

, whose pricing has been met with intense interest thus far, for sapping demand somewhat.

Friday's Wake-Up Watchlist

By

Tara Murphy

and

Brian Louis

Staff Reporters

Warner-Lambert

(WLA)

said it would not pursue

Pfizer's

(PFE) - Get Report

unsolicited $79.7 billion rival bid for the company. Pfizer launched the offer in response to a planned merger between

American Home Products

(AHP)

and Warner. Although the Warner board said its proposed merger with AHP is in the best interest of shareholders, it did not say it was refusing Pfizer's bid. Warner also said it would defend its actions in legal proceedings brought on by Pfizer, calling the claims "totally without merit."

TheStreet.com

wrote about Pfizer's bid in a story

last night.

A crucial ruling, the "findings of fact," is expected today in the

Microsoft

(MSFT) - Get Report

antitrust trial.

Disney

(DIS) - Get Report

, after yesterday's close, reported fiscal fourth-quarter earnings, excluding charges, of 10 cents a share, in line with the

First Call/Thomson Financial

20-analyst estimate, but down from the year-ago 14 cents. Excluding charges, fourth-quarter earnings fell 37% to $212 million from $296 million a year earlier amid a slump in its home-video and product-licensing businesses. Including the charge, net income fell to $85 million.

This includes a $132 million charge related to consolidation as well as costs associated with its acquisition of Internet search engine

Infoseek

(SEEK)

.

Mergers, acquisitions and joint ventures

AlliedSignal

(ALD)

said it has begun a $9.50-a-share tender offer for

TriStar Aerospace

(TSX)

, which it said TriStar's board has approved.

Synthetic Industries

(SIND)

said it would be sold to a unit of

Investcorp

and other investors, in a deal valued at $535 million. The transaction, which calls for Synthetic to be bought for $33 a share, is set to close in mid-December.

Teligent

(TGNT)

, an integrated communications company, said it has raised $500 million in new capital to expand its buildout of local broadband networks, with an investor group led by

Microsoft

(MSFT) - Get Report

and private equity firm

Hicks Muse Tate & Furst

.

Offerings and stock actions

Goldman Sachs

priced

Cobalt's

(COBT)

5 million-share IPO at $22 a share yesterday.

Goldman priced

Webvan's

(WBVN)

25 million-share IPO yesterday top-range at $15 a share. The estimated price range was raised to $13 to $15 a share from $11 to $13. The online grocer's offering was

postponed last month in response to

Securities and Exchange Commission

concerns about the company's possible failure to observe quiet-period restrictions in giving pre-IPO interviews and roadshow presentations.

Wireless Facilities

(WFII)

will make its trading debut today.

Credit Suisse First Boston

priced the 4 million-share IPO at $15 a share yesterday.

Earnings/revenue reports and previews

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

Great Lakes REIT

(GL) - Get Report

posted third-quarter funds from operations of 50 cents a share, beating the three-analyst estimate of 47 cents and up from the year-ago 44 cents.

iVillage

(IVIL)

posted a third-quarter loss of $1.12 a share, narrower than the three-analyst estimate of a $1.39 loss and the year-ago $1.92 loss.

Speedway Motorsports

(TRK) - Get Report

warned it expects to post a loss for the third quarter. The 11-analyst estimate currently calls for the company to earn 3 cents a share. The company said it expects to generate a profit in the fourth quarter; however, it said it is likely net earnings will be $3 million less than expected.

Analyst actions

Warburg Dillon Read

cut its rating on

Aflac

(AFL) - Get Report

to hold from strong buy.

Morgan Stanley Dean Witter

sliced its rating on

Eastern Enterprises

(EFU) - Get Report

to neutral from outperform.

Morgan Stanley rolled out coverage of

LTX

(LTXX)

with an outperform rating and set a price target of 25 on the stock.

Miscellany

The

Nasdaq Stock Market

unveiled its plans to start a pan-European stock exchange in the fourth quarter of 2000.

Reliance Group Holdings

(REL)

, which is controlled by financier Saul Steinberg and his family, is facing some key events coming up: a review of its insurance financial-strength ratings, two debt refinancings next year and an IPO of one of its insurance divisions, the Heard on the Street column in

The Wall Street Journal

reports.

The Inside Wall Street column in

Business Week

, which is penned this week by Gary Weiss, offers up a positive story on

Sherwin-Williams

(SHW) - Get Report

, citing

U.S. Trust

portfolio manager David Tillson, who's been buying shares of Sherwin-Williams, in a bet that the company will soon climb out of its current troubles.

Mattel

(MAT) - Get Report

and

Philip Morris

(MO) - Get Report

garner positive mention in the column, citing value investor Andrew Bischel, president of

Spare Kaplan Bischel & Associates

, who has been buying up shares of both those beaten-up stocks.

Elsewhere,

JDS Uniphase

(JDSU)

is the subject of a positive item in the column with Robert Gillam, president and chief investment officer at

McKinley Capital Management

in Anchorage, Alaska, singing the stock's praises.

Yesterday, JDS Uniphase agreed to buy

Optical Coating Laboratory

(OCLI)

.

TheStreet.com/nytimes.com

joint newsroom wrote about the deal in a story

yesterday.