Stocks Ready to Start the Week Higher - TheStreet

Stocks Ready to Start the Week Higher

Sprint is leading this morning's corporate news, as it ponders an unsolicited bid from BellSouth that competes with MCI WorldCom's friendly offer.
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Stocks are ready to start the week higher.

At 9 a.m. EDT, the

S&P 500

futures were up 6.5, more than 7 points above fair value and indicating a positive bias to the opening.

This morning's opening rally may turn a bit tentative ahead of tomorrow's

Federal Open Market Committee

meeting, though, especially after the

hot prices-paid component in Friday's

National Association of Purchasing Management

survey. The strength in stock futures this morning is coming in spite of the Fed, even though the general consensus is that a rate hike is extremely unlikely.

"At this point, the Fed is definitely going to be a negative factor until the

FOMC meeting," said Dan Mathisson, head stock trader at

D.E. Shaw Securities

. "It's just another cause of uncertainty."

With 29 of the 30 primary dealers polled by

Reuters

expecting the Fed to stand pat, most of that uncertainty has to do with the policy bias. The

Reuters

poll shows 13 dealers see the Fed adopting a tightening bias, a move that could keep the market hamstrung until the next FOMC meeting on Nov. 16.

But things look strong in the early going today. The day's M&A news is led by

Sprint

(FON)

, whose board met last night to weigh an unsolicited takeover bid from

BellSouth

(BLS)

against

MCI WorldCom's

(WCOM)

friendly offer, both

The Wall Street Journal

and

The New York Times

reported, citing people familiar with the situation. The papers wrote that the board adjourned without making a decision, but is expected to opt for MCI WorldCom's prior but less lucrative offer.

Meanwhile, the old story that

AT&T

(T) - Get Report

is considering creating a tracking stock has returned in spades. Telephone is now mulling the issuance of several tracking stocks -- possibly covering wireless operations, its cable and Internet businesses and its business outsourcing unit, the

Journal

reported.

Gold was spiking again this morning. The

79th element on the periodic table was lately trading at $313 an ounce, about $10 above its Friday New York close.

The 30-year Treasury was lately unchanged at 99 29/32, its yield sitting at 6.131%.

Investors who feared that a stronger-than-expected

tankan

report would send the dollar into another tailspin against the yen are breathing easier this morning. The

Bank of Japan's

quarterly survey of business confidence for large manufacturing companies came in at negative 22, better than the negative 26 expected by economists polled by the

Nihon Keizai Shimbun

and up from the June's negative 37. But that wasn't strong enough to give the yen a significant boost against the dollar.

Quite the contrary. After briefly dipping below 105 yen level, the greenback traded for most of the Tokyo session around 105.8 yen, 0.9 yen above its New York close.

The dollar was lately quoted at 105.9 yen.

No sign yet that the BOJ is any closer to a qualitative easing of monetary policy. The central bank left a 1.5 trillion-yen surplus in the banking system, higher than the usual 1 trillion-yen surplus but down from the 1.9 trillion-yen surplus it left at the end of last week to increase liquidity for the close of the fiscal half-year.

The

Nikkei

ended modestly higher, gaining 51.15, or 0.3%, to 17,763.71.

In Hong Kong, the

Hang Seng

rose 142.62, or 1.1%, to 12,875.86. The rally was quite top-heavy, though, with decliners beating advancers 389 to 183.

The big European indices were all higher around midday. The London

FTSE

was up 55.0, or 0.9%, to 6025.7, while Frankfurt's

Xetra Dax

was 89.69 higher, or 1.8%, to 5214.24. The Paris

CAC

was up 54.51, or 1.2%, to 4605.08.

Monday's Wake-Up Watchlist

By

Tara Murphy and Brian Louis

Staff Reporters

BellSouth has offered to buy Sprint, a bid that is higher than the buyout offer Sprint has received from MCI WorldCom, according to reports in

The Wall Street Journal

and

The New York Times

.

Clear Channel Communications

(CCU) - Get Report

is buying

AMFM

(AFM)

. Under terms of the deal, AMFM shareholders will receive 0.94 of a Clear Channel share for each AMFM share they own, held on the record date of the deal, which is expected to be in the second half of 2000.

Mergers, Acquisitions and Joint Ventures

America Online

(AOL)

and

Travelocity.com

set a multiyear content and commerce pact valued at up to $200 million. Under the deal, Travelocity.com will become the exclusive reservations engine integrated into the AOL service,

AOL.com

,

CompuServe

,

Digital City

and

Netscape

when Travelocity and

Preview Travel's

(PTVL)

merger is completed. Separately,

Sabre Holdings'

(TSG) - Get Report

Travelocity and Preview Travel announced they're merging. Sabre also announced it agreed on terms with

Yahoo!

(YHOO)

for an extension of their existing contract.

CBS

(CBS) - Get Report

and

Medscape

(MSCP)

unveiled plans to start a consumer health Web site.

Paul Allen's

Vulcan Ventures

is making a $1.65 billion investment in

RCN

(RCNC)

, a telecommunications company. Allen is a co-founder of

Microsoft

(MSFT) - Get Report

.

Summit Bancorp

(SUB) - Get Report

is buying

NMBT

(NMBT)

for $69.4 million.

Temple Inland

(TIN)

said it plans to sell its bleached paperboard unit to

Westvaco

(W) - Get Report

for roughly $625 million, in an attempt to concentrate on its core corrugated packaging business. The deal is expected to be completed by the end of the year.

Offerings and Stock Actions

In an effort to increase shareholders' return, AT&T is pondering issuing several tracking stocks, the

Journal

reported, citing people familiar with the matter. Under one proposal, Ma Bell would issue three stocks that would track AT&T's wireless division, its cable and Net undertakings and its outsourcing unit for businesses.

iVillage

(IVIL)

said it filed with the

Securities and Exchange Commission

to offer 3 million shares of common stock.

King Pharmaceuticals

(KING)

set a 3-for-2 stock split.

Earnings/Revenue Reports and Previews

(Earnings estimates are from

First Call/Thomson Financial

.)

Harleysville

(HGIC)

warned its second-half results will fall well below analysts' estimates due in part to higher catastrophe losses resulting from Hurricane Floyd.

Analyst Actions

Merrill Lynch

reinstated coverage of

AmSouth Bancorp

(ASO)

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

Morgan Stanley

upped its rating on

Commonwealth

(CMIN)

to outperform from neutral.

Credit Suisse First Boston

lowered its third-quarter earnings estimate on

Compaq

(CPQ)

to 5 cents a share from 9 cents and its fourth-quarter estimate to 22 cents from 34 cents. CSFB also cut its estimate for fiscal 2000 to $1 from $1.25.

Merrill Lynch sliced its rating on

Hospitality Properties Trust

(HPT)

to accumulate from buy.

Morgan Stanley upped its rating on

Lamar Advertising

(LAMR) - Get Report

to strong buy from outperform.

Warburg Dillon Read

rolled out coverage of

Lifepoint Hospitals

(LPNT)

with a buy rating.

Warburg Dillon Read cut its rating on

Revlon

(REV) - Get Report

to hold from buy.

Miscellany

Boeing

(BA) - Get Report

announced its plans to restructure its customer-finance division in order to enhance its jet-leasing service and increase its profits, the

Journal

reported. The reorganization effort helps put Boeing in closer competition with leasing firms that purchase its planes, the newspaper reported.