Stocks Looking Higher After Friendly Jobs Report

The euro breaks parity with the dollar overnight; in Monaco, billionaire banker Edmond Safra is killed in a fire set by armed intruders.
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A friendly employment report is hopping up the stock market this morning.

The

Labor Department

reported payrolls increased by 234,000 jobs in November, slightly higher than the 226,000 predicted by economists in the

Reuters

poll. The jobless rate stayed steady at 4.1%. Most importantly, hourly wages gained just 0.1%, two-tenths of a point lower than expected.

"The market liked the hourly earnings number," said Dan Mathisson, head stock trader at

D.E. Shaw Securities

. "That's really the most important number, the one people were worried about. So we're seeing the bond market rally, and

Globex

is following the bonds."

The long bond surged on the report's release, though it has since retraced nearly half of those gains. At 9 a.m. EST, it was up 16/32 to 97 29/32, putting the yield at 6.281%. At 9:05 a.m., the

S&P 500

futures were up 17.5, about 18 points above fair value and indicating a strong open.

"We're looking up this morning in all the interest rate sensitive areas," Mathisson said. "And the technology rally looks intact."

The jobs report comes at a key time for the market. Notwithstanding the still phenomenal gains in the

Nasdaq's

largest stocks, the blissful sense prevailing after the last

FOMC

meeting that the Federal Reserve is out of the picture has started to fade somewhat as market observers turn their eyes to 2000. The long-bond yield has added about a quarter-point in yield since the Fed hiked and adopted a neutral bias. And earlier this week a hawkish

speech by Governor

Laurence Meyer

reminded many of the Nov. 16 Fed

statement on the shrinking pool of available workers.

The large European bourses were flying in early afternoon trading despite the euro's double-dip below parity with the dollar overnight. London's

FTSE

was up 83.3, or 1.3%, to 6737.0, while the Paris

CAC

was 111.46 higher, or 2.1%, to 5465.65. Frankfurt's

Xetra Dax

was up 116.86, or 2%, to 6054.06.

After having fallen below $1 twice in Asian trading, the euro has firmed marginally, lately trading at $1.0011. In an interview with today's

Wall Street Journal Europe

,

European Central Bank

President

Wim Duisenberg

said that he doesn't expect intervention on behalf of the euro.

Meanwhile, billionaire banker

Edmond Safra

was killed in his Monaco apartment in a fire set by two armed intruders. Safra, 68, was in the last stages of

selling

Republic New York

(RNB)

to London-based

HSBC Holdings

(HBC)

. He owned 29% of Republic.

Tokyo continues to struggle against the strength of the yen, which investors fear will threaten the performance of Japan's export-oriented companies. The

Nikkei

sank 146.77, or 0.8%, to 18,368.14.

Dollar/yen ranged in a narrow band between 102.5 and 102.2 overnight. Finance Minister

Kiichi Miyazawa

played down the chances for coordinated intervention, saying that "it is not so easy to agree and coordinate intervention, so for intervention that is not so large, it is unavoidable that we will take the responsibility to act" alone.

The dollar was lately quoted at 102.35 yen.

Besides the U.S. jobs report, Tokyo markets were dealing with Monday's release of Japan's July-September

gross domestic product

data. The consensus of economists polled by the

Nihon Keizai Shimbun

calls for a contraction of 0.1% from the previous quarter. As usual, that consensus is composed of a wide band of individual forecasts, ranging from a contraction of 0.9% to an expansion of 0.9%. But Takashi Nakanomyo, the Economic Planning Agency's deputy director general, said it "wouldn't be surprising" if GDP contracted.

Seen outside a restaurant in New York City:

Top Five Reasons for the Seattle Protests:

  • 5. Someone dropped a Pokemon card
  • 4. It's not a riot - it's a mosh pit
  • 3. Someone ordered a double decaf soy latee with nutmeg and a shot of almond and called it coffee
  • 2. Eddie Vedder was rumored to be pairing up with Jimi Hendrix for a duet
  • 1. The strippers didn't show up for the Microsoft Christmas party

It was a welcome bit of comic relief from the arcana of trade negotiations and definitions of transparency. As he was reiterating the unique position of the President -- which does not constitute a change in U.S. trade negotiations in the

World Trade Organization

-- Director of the National Economic Council Gene Sperling's phone was ringing. "Ha, that's the President now, making sure I don't misquote him," joked Sperling. "Ah, we all know it's Gene's mother," retorted the normally controlled U.S. Trade Representative

Charlene Barshefsky

.

As negotiations on the format and topics for the next round of negotiations continued well into the night, some trade ministers from smaller nations such as Guyana were complaining that their views were being overshadowed by the richer states. Barshefsky, who is also the chair of the Seattle meeting, defended the transparency and inclusiveness of the negotiations. Though she did cause some eyebrows to be raised when she said that if the working groups -- which all 135 member countries can in theory participate in -- did not produce a format soon, she would "then have a more exclusive process. It is my right as the chair, though it is not what I want."

Parliamentarians from Europe adopted a proposal to establish a new WTO body. They hoped a new parliamentary body would help strengthen the accountability and transparency of the WTO. The WTO Director General welcomed the initiative.

In a press statement, the parliamentarians wrote, "In a week in which the WTO meeting has been dominated by street protests, this initiative represents a concerted effort by democratically elected parliamentarians to address the popular anxieties surrounding the WTO and tackle the perceived lack of accountability in international trade matters."

-- Heather Bourbeau

Friday's Wake-Up Watchlist

By

Tara Murphy

and

Brian Louis

Staff Reporters

Republic New York

(RNB)

founder Edmond Safra was killed after hooded attackers, armed with knives, broke into his Monaco apartment and set it on fire. Safra had just agreed to sell his interest in Republic Bank and another company,

Safra Republic

, to

HSBC Holdings

(HBC)

for $3 billion. The deal faced delays after a New Jersey money fund manager, who did business through Republic, sparked a probe at the bank after he was charged with scamming investors. In November, Safra agreed to accept $450 million less for his interest.

Mergers, acquisitions and joint ventures

Carnival

(CCL) - Get Report

said it would agree to sell its interest in its smaller rival

NCL Holding

if its $884 million takeover offer is countered by a higher bid. Including debt, the deal is valued at $1.7 billion. NCL Holding said that other firms have expressed interest in the company.

Chesapeake

(CSK)

said it has started a $500 million, or $17.25 a share, tender offer for

Shorewood

(SWD)

. Chesapeake had boosted its latest hostile takeover offer by 4%, after Shorewood called its $16.50-a-share bid "grossly inadequate.

The betting among analysts and others is that

PepsiCo

(PEP) - Get Report

will not make a bid for

Orangina

,

Pernod-Ricard's

orange-soda business, the Heard on the Street column in

The Wall Street Journal

said. Last week the French government blocked Pepsi rival

Coca-Cola's

(KO) - Get Report

bid to buy Orangina. Pepsi will not discuss its plans, though a spokesman does not rule out the possibility of an offer, the column said.

Pfizer

(PFE) - Get Report

said after yesterday's close that it will file by Christmas with the

Securities and Exchange Commission

to oust

Warner-Lambert's

(WLA)

board of directors. Pfizer also said its court date with Warner has been postponed until Jan. 31, but that it still wants the Warner antitakeover provisions lifted. Pfizer is trying to block Warner's proposed union with

American Home Products

(AHP)

.

Softbank

, the Japanese investment company, has been in talks to buy a large stake in

Island ECN

, an electronic network for stock trading,

The New York Times

reported, citing people who have been briefed on the talks. The newspaper said Softbank has made a multimillion-dollar offer to buy the stake from

Datek Online Holdings

, which owns the fourth-largest online brokerage in the U.S. and about 85% of Island. However, the talks have broken down, and it's unclear whether a deal will occur.

Earnings/revenue reports and previews

(Earnings estimates are from

First Call/Thomson Financial

.)

Carmike Cinemas

(CKE)

said it expects to posted a loss for the fourth quarter. The seven-analyst estimates the company will report a 17-cent profit.

Cidco

(CDCO)

is forecasting a fourth-quarter loss between 27 to 33 cents a share, greatly missing the single-analyst estimate of an 11-cent profit. The company blamed the disappointing estimates on softer-than-expected demand in the fourth quarter.

Tandy

(TAN) - Get Report

posted a 17% increase in November same-store sales.

Offerings and stock actions

Excite@Home

(ATHM) - Get Report

said it plans to set a convertible subordinated note offering for roughly $400 million to fund its purchase of Internet greeting card company

Bluemountain.com

. In October, Excite@Home inked a $780 million cash and stock deal to buy BlueMountain.com.

Inktomi

(INKT)

said its board approved a 2-for-1 stock split.

Analyst actions

Bear Stearns

raised its price target on

Apple

(AAPL) - Get Report

to a range of 115 to 120 from 90 to 95.

Miscellany

Aetna

(AET)

is examining strategies to increase its share price, including issuing a tracking stock related to its international or financial services business, selling assets or spinning off units, the

Journal

reported.

The

Justice Department

said after yesterday's close that it has retained New York-based investment bank

Greenhill

to advise it on the financial implications of a full range of potential remedies in the landmark

Microsoft

(MSFT) - Get Report

antitrust case. A Justice Department official made it clear that retention of the firm reflects no view by the department on whether the case would be resolved in court or through mediation.

The Inside Wall Street column in

Business Week

this week, penned by Gene Marcial, quotes

Donaldson Lufkin & Jenrette

analyst Peter Ruschmeier as saying that if

Louisiana-Pacific

(LPX) - Get Report

delays capacity expansion and instead buys back shares, the stock "can easily double." If the company doesn't do that, it's going to be tough for the shares to rally, "short of being acquired by a competitor,'' the column quotes Ruschmeier as saying. An unidentified money manager is quoted in the column as saying that a major paper concern "may make a pre-emptive bid, at around 23 a share" for beaten-up Louisiana-Pacific. The money manager also said that, based on fundamentals, Louisiana-Pacific is worth 18, according to the column. Louisiana-Pacific closed at 14 1/4 yesterday.

Elsewhere,

Cash Technologies

(CHNG) - Get Report

has attracted an ATM equipment maker to talk about the possibility of a merger, the column reported, citing an investor close to the company. The column also said a big financial-services concern was also interested in buying an equity stake in the company, citing a corporate insider. In Cash Technologies' most recent 10Q filing with the SEC, Bruce Korman, the company's chairman and CEO, disclosed that the concern was is in talks for either a merger or the sale of the company, the column reported.

Finally, the column serves up a bullish item on

SBA Communications

(SBAC) - Get Report

.