Stocks Look to Hang On to Friday's Gains

Expectations of an easing by the Bank of Japan helped the dollar extend its comeback overnight, and S&P 500 futures are up this morning.
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The market is showing signs of retaining a little of

Friday's strength this morning.

At 9:10 a.m. EDT, the

S&P 500

futures were up 3, about 4 points above fair value and indicating a positive open. The 30-year Treasury was off 2/32 to 100 30/32, its yield rising to 6.056%.

Charles Farra, president of

Global Trading

, sounded impressed with the market's successful testing of key support levels Friday: "The

Nasdaq

-- and tech stocks in particular -- still look very strong. It's tough to see any kind of break in this market unless we see some downside in tech. You've got five key tech stocks holding up the whole shooting match. If anything, there's a good chunk more to go to the upside."

For the S&P 500 futures, Farra said he expects "a quiet updrift," with many market participants' observance of Yom Kippur exacerbating the quietude. The December contract closed at 1351 and will encounter resistance at 1365, he said.

Major proxies may get enlivened by a report in

The Wall Street Journal

of a joint Internet auto-selling venture between

Dow Jones Industrial Average

component

Ford

(F) - Get Report

and Nasdaq heavyweight

Microsoft

(MSFT) - Get Report

. Another Dow component to watch this morning is

Chevron

(CHV)

, which London's

Sunday Times

reported to be in talks to acquire

Phillips Petroleum

(P)

. (Both companies declined to comment on the report.)

No big economic data are scheduled for release today. Tomorrow brings the

Commerce Department's

July

international trade

figures -- not something that usually gets much play in the market, but given the dollar/yen hijinks, more than a few traders will be on the lookout for a larger-than-expected trade deficit, which could put pressure on the greenback.

But the dollar continued its late resurgence against the yen overnight, amid a growing sense that the

Bank of Japan

will bow to pressure to further ease its already loosey-goosey monetary policy when it meets tomorrow. The

Nihon Keizai Shimbun

and the

Yomiuri

newspapers both reported over the weekend that the BOJ will discuss easing when it meets tomorrow.

Today, former Vice Finance Minister

Eisuke Sakakibara

, a.k.a. "Mr. Yen," told reporters that the BOJ should ease policy.

A relaxation of policy -- the most likely means of which seems to be the injection of capital into the banking system through open-market operations -- is widely seen as a precondition of coordinated intervention, which the

G-7

is expected to discuss when it meets this Saturday.

Expectations of easing helped the dollar extend its comeback against the yen overnight. Having moved through the 108 yen level in Tokyo, the dollar was sitting at 107.33 yen in early New York trading.

With fears that domestic currency strength would threaten Japan's embryonic economic recovery somewhat alleviated, the

Nikkei

advanced 232.99, or 1.3%, to 17,575.26.

Tokyo's gains didn't spill over to Hong Kong, where the

Hang Seng

languished around break-even despite concentrated strength in the technology sector. The benchmark index fell 12.47 to 13,472.37.

The big European indices were all solidly higher around midday. London's

FTSE

was up 41.9 to 6081.7, while the Paris

CAC

was up 42.30 to 4686.62. Frankfurt's

Xetra Dax

was 53.30 higher, or 1%, to 5357.24.

Monday's Wake-Up Watchlist

By

Tara Murphy

Staff Reporter

Mergers, Acquisitions and Joint Ventures

Microsoft and Ford are expected to forge a joint business that would allow Ford to make cars in answer to online orders, while giving Microsoft another industry partner in its Internet endeavors,

The Wall Street Journal

reported.

Separately, Microsoft,

Excite@Home

(ATHM) - Get Report

and

Ticketmaster Online-CitySearch

(TMCS)

announced their newly formed online auction network,

FairMarket

, which will compete with the No. 1 online auction site

eBay

(EBAY) - Get Report

. FairMarket said the network could connect with more than 46 million visitors, or 73.3% of all Internet users.

Lycos

(LCOS)

,

Xoom.com

(XMCM)

,

ZDNet

(ZDZ)

and

Dell

(DELL) - Get Report

are all part of the new venture.

Ogden

(OG)

announced plans to sell its entertainment and aviation divisions as an alternative to a spinoff, the

Journal

reported.

PSINet

(PSIX)

announced its acquisition of four Internet service providers, including Brazil's

ServNet Servicos de Informatica e Communicacao

, Hong Kong-based

Vision Network

and Spain's

Infase Comubicaciones

and

Ciberia Internet

.

Sonera

said it has authorized

VoiceStream's

(VSTR)

proposed merger with

Aerial

(AERL)

, in which Sonera has a major interest. In premarket trading, Aerial was up to 22 from Friday's closing price of 20.

Earnings/Revenue Reports and Previews

Dole Food

(DOL) - Get Report

warned investors that it would post third-quarter break-even results or a possible loss, missing the four-analyst estimate of 13 cents a share.

Offerings and Stock Action

Best Buy

(BBY) - Get Report

has set a stock buyback plan worth $200 million. The retailer said it finished a $100 million repurchasing plan last October and now has roughly 205 million outstanding shares.

Cost Plus

(CPWM)

said it has set a 3-for-2 common-share stock split.

Analyst Actions

Credit Suisse First Boston

raised its fiscal 1999 and 2000 earnings estimates for

ASM Lithography

(ASML) - Get Report

to 62 cents and $2.25 per share, respectively.

Donaldson Lufkin & Jenrette

said it sliced its rating of

Complete Business Solutions

(CBSI)

to a buy from a top pick.

Merrill Lynch

added

General Electric

(GE) - Get Report

to its Focus 1 list, noting that it could hit 150 by next year.

Warburg Dillon Read

upgraded shares of

Paychex

(PAYX) - Get Report

to a buy from a hold.

Warburg Dillon Read upped its rating on

priceline.com

(PCLN)

to a strong buy from a buy.

Credit Suisse First Boston rolled out coverage of

VeriSign

(VRSN) - Get Report

with a buy rating.

Miscellany

Wall Street analysts are fearing that

American Home Products'

(AHP)

planned fen-phen settlement may go too far to accommodate plaintiffs, leaving the drugmaker open to lengthy legal proceedings,

The New York Times

reported. According to the

Times

, the company and plaintiffs agreed to an initial draft of a memorandum of understanding, which has American Home Products handing over $4 billion to former fen-phen users.

The head of

DaimlerChrysler's

(DCX)

commercial-vehicle division, Kurt Lauk, has resigned from the company's management board, while Thomas Stalkamp's role as Chrysler's president is in jeopardy,

The Wall Street Journal

reported.

Wal-Mart

(WMT) - Get Report

unveiled plans to launch 10 trial

Computer Doctor

centers in its stores to service computers and install software, the

Journal

reported.