Skip to main content

Stocks Playing It Cooler This Morning

Things don't look as rampant as they've looked during the past two sessions.

For the first time since last Wednesday, stocks don't look absolutely rabid before the open.

But considering how hard they've rallied in the


two sessions, they don't look too shabby, either. At 9:05 a.m. EST, the

S&P 500

futures were down 2.9, about 3 points above fair value and indicating a moderately positive open.

"You can't go up every day by leaps and bounds," said Bryan Piskorowski, market analyst at

Prudential Securities

. "However, with the bonds off about half a point here, a couple bucks

down on the S&P's aren't bad." Piskorowski was referring to the December bond futures contract, lately down 14 ticks to 113 5/32.

This morning may be a good time to take pause, and not just because today marks the first appearance of the new (and improved?)

Dow Jones Industrial Average

. We're out of the heart of earnings season, with 84% of

S&P 500

companies having already reported, according to

First Call/Thomson Financial

Scroll to Continue

TheStreet Recommends

. And though S&P 500 stocks themselves -- the only way to judge S&P 500 earnings, ultimately -- are still more than 3% off their July highs, those still looking for the stock market's symmetrical reaction to earnings can take heart in the fact that the

Nasdaq Composite Index

will start trading at an all-time high today.

It's been said before, and it can be said at least once more: It's all about the data right now. The most salient variable in the calculus of the market's reaction to strong earnings is interest rates, and recent economic data have helped make that variable somewhat less scary. Today, the

National Association of Purchasing Management's

monthly survey of manufacturing conditions comes out at 10 a.m. Economists polled by


are looking for a reading of 56.4, down from last month's 57.8. Any number above 50 signifies expansion in the sector.

Ahead of the NAPM, the 30-year Treasury was down 7/32 to 99 7/32, putting the yield at 6.182%.

You'll often see follow-up rallies in the large Asian markets after a blowout session like Wall Street had Friday. Not this time. Tokyo and Hong Kong already played out that script Friday and couldn't muster enough momentum overnight for a second take.

After nosing above the psychologically key 18,000 level, the


relaxed to close up a modest 54.84, or 0.3%, to 17,996.93. As has often been the case lately, worries over the yen's strength played the market's bad cop, capping the upside for the big export-oriented stocks. The dollar moved toward the 103.7 yen level in Tokyo trading before reviving somewhat. It was lately quoted at 104.25 yen.

Traders in Hong Kong who braced for a pullback after Friday's 3.9% rally had to change strategies after unconfirmed newspaper reports that the government had cut a theme-park deal with


(DIS) - Get Walt Disney Company Report

boosted sentiment enough to keep the

Hang Seng

above water. The benchmark index rose 65.16, or 0.5%, to 13,322.11. The government will announce the outcome of the Disney negotiations late this evening.

In Malaysia, the

Kuala Lumpur Stock Exchange Composite Index

fell 11.39, or 1.5%, to 731.48 after

Morgan Stanley Capital International

said that it will hold off on putting Malaysia back into its widely tracked international indices until May 2000 because of concerns over possible leap-year computer glitches. MSCI had first planned to make the change on Feb. 29 of next year.

In Europe, observance of All Saints' Day was keeping the Paris bourse closed and the other big markets relatively quiet in early afternoon trading. Frankfurt's

Xetra Dax

was off 18.07 to 5507.33 its weakness offset by gains in insurance giant


, which set plans to buy 70% of U.S. fund manager

Pimco Advisors


. In London, the


was down 1 to 6254.7. Traders there are dealing with expectations that the

Bank of England

will raise interest rates at its Thursday meeting -- a


poll showed 25 of 30 economists expecting a quarter-point hike.

Same story in the eurozone. The

European Central Bank

also meets this Thursday, and expectations of a rate hike were bolstered after the German newspaper


quoted ECB President

Wim Duisenberg

as saying that the central bank's "inclination for higher interest rates has certainly risen somewhat" since July. That gave some juice to the euro, which moved from $1.053 up toward the $1.06 level. It was lately quoted at $1.0545.

Monday's Wake-Up Watchlist


Tara Murphy


Brian Louis

Staff Reporters

Mergers, acquisitions and joint ventures



said it would assume a goodwill charge for the $3.3 billion majority interest it has taken in

Pimco Advisors


of $2.4 billion to $2.5 billion. Allianz board member Helmut Perlet said at a news conference that the charge in 2000 would total roughly $120 million to $220 million in the following year,


reported. Allianz said earlier that it plans to have the goodwill completely written off over a 15-year period.

Separately, Allianz said that it could boost its 70% interest in Pimco Advisors while

Pacific Life Insurance

, in which Pimco shareholders have a 30% stake, would possibly lower its interest in the interim. Allianz also said that after closing the transaction, Pimco would be delisted.


General Electric

announced that its

Marconi Communications

division would acquire


(NOK) - Get Nokia Oyj Report

SDH/DWDM transport equipment unit.

said it will receive $22 million in third-round financing from


(EBAY) - Get eBay Inc. Report


Benchmark Capital


Morgan Stanley Dean Witter


. The deal calls for eBay CEO Meg Whitman and Benchmark venture capitalists Bill Gurley and David Beirne to sit on's board.



said it received a request from the

Justice Department

for additional information on the proposed acquisition of Visio by


(MSFT) - Get Microsoft Corporation Report


Online investment bank

Wit Capital


is buying

SoundView Technology

, a private investment banking concern based in Connecticut, for about $320 million in stock.

Offerings and stock actions



said it set a 10 million-share buyback.

Neuberger Berman's

(NEU) - Get NewMarket Corporation Report

board approved a $50 million stock buyback plan. Neuberger Berman went public last month.

Track Data


set a 2-for-1 stock split.


(UAL) - Get United Airlines Holdings, Inc. Report

, parent of

United Airlines

, said its board authorized a $300 million-share buyback plan.



announced plans to cancel its secondary offering. WorldGate plans to withdraw its registration statement, saying that it doesn't believe that an offering at this time is in the best interest of shareholders.

Earnings/revenue reports and previews

(Earnings estimates are from

First Call/Thomson Financial


Avado Brands


reported third-quarter earnings of 10 cents a share, shy of the six-analyst estimate of 18 cents and down from the year-ago 58 cents.

Mercury General

(MCY) - Get Mercury General Corporation Report

posted third-quarter earnings of 59 cents a share, missing the six analyst estimate of 69 cents and down from the year-ago 73 cents.


(ORBK) - Get Orbotech Ltd. Report

posted third-quarter earnings of 97 cents a share, beating the five-analyst estimate of 88 cents and up from the year-ago 75 cents.

Analyst actions

Morgan Stanley sliced its rating on

Allmerica Financial

(AFC) - Get Ares Capital Corporation 6.875 % Notes 2007-15.4.47 Global Report

to neutral from outperform.

Merrill Lynch

initiated coverage of

Calico Commerce


with an intermediate-term accumulate rating and a price target of 72.

Merrill reinstated coverage of

LSI Logic

(LSI) - Get Life Storage, Inc. Report

with an intermediate-term accumulate rating and a long-term buy rating.

Merrill named

News Corp.

(NWS) - Get News Corporation Class B Report

a Focus One selection and upped its 12-month price objective to 45 from 40. News Corp. closed Friday at 29 5/8.

Morgan Stanley initiated coverage of

Province Healthcare





with outperform ratings.



(T) - Get AT&T Inc. Report

announced plans to form a new public company,

AT&T Latin America

, that will merge the operations of


, the local exchange company AT&T is buying in Brazil, and


, a publicly traded company with telecommunications operations in Chile, Colombia and Peru.


(DIS) - Get Walt Disney Company Report

and the government of Hong Kong have reached a deal to construct a Disney theme park in Hong Kong, according to published reports.

DuPont Photomasks


said David Gino has resigned as executive vice president-finance and CFO.

Nearly two years after

Merrill Lynch's


acquisition of

Mercury Asset Management

of Britain, the get-together isn't working out as gracefully as expected, the Heard on the Street column in

The Wall Street Journal

says today.



unveiled its DSP56690 baseband processor, which can handle all major existing wireless standards as well as satellite-based products.


(RNWK) - Get RealNetworks, Inc. Report

RealJukebox software secretly monitors the listening habits and other activities of people who use it,

The New York Times

reported, citing a security expert. RealNetworks contends the practice does not violate consumer privacy because the info isn't stored by RealNetworks or distributed to other companies, the newspaper reported.