Stocks Look to Hang On to Friday's Gains
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.
