Stocks Set for Mixed Open This Morning

The Microsoft decision is weighing on the market, but things look better now than they did a couple of hours ago.
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The bad news is that Judge Thomas Penfield Jackson's preliminary

ruling in the

Microsoft

(MSFT) - Get Report

case is weighing on the market this morning.

The good news is that things don't look nearly as bad as they did earlier in the morning, when the

S&P 500

futures were down more than 15 points. At 9:05 a.m. EST, the futures were down 10.3, just 2 points below fair value. That's still indicating a tilt toward a negative open, but the selling will be much more selective than previously feared.

Stocks are "taking the Microsoft news pretty much in stride," said Jim Volk, co-director of institutional trading at

D.A. Davidson

. "Our market is reacting better than the initial assumption would have been after looking at the newspapers over the weekend."

Microsoft, which Jackson ruled wields monopoly power in the personal computer operating system market, was lately indicated down more than 7 points in premarket trading, poised to take chunks out of both the

Dow Jones Industrial Average

(nice timing,

Dow Jones

(DJ)

) and the

Nasdaq Composite Index

.

Of those benchmarks, the Nasdaq is the more vulnerable this morning, and not only because Microsoft represents more than 13% of its market capitalization. Technology stocks have a lot of wiggle room on the downside -- with the Nasdaq fresh off its sixth-consecutive record close, they're due for some consolidation, with or without Microsoft.

As for the broader market, we'll see how much clout Microsoft wields on sentiment after the sell programs burn themselves out shortly after the open. The level-headed bond market, hanging tough this morning after last week's impressive rallies, isn't indicating that anything's changed since Friday, when lower-than-expected wage gains bolstered arguments that a Fed hike on Nov. 16 may not be a done deal. The 30-year Treasury was lately flat at 100 30/32, putting the yield at 6.056%. The December bond futures were down 4 ticks to 114 16/32.

"The market has been struggling to get above 11,000" on the Dow, Volk said. "At this point, it should back off a bit, which would be healthy. But until we get some more news on earnings or inflation, and what the

Federal Open Market Committee

is going to do, I think these markets will be relatively stable."

No major economic data are scheduled for today. The big numbers will come out later this week, with the

Producer Price Index

on Wednesday and

retail sales

and preliminary third-quarter productivity figures on Friday.

Anticipation of a lower open in New York was putting a modest crimp in the large European indices in early afternoon trading. Frankfurt's

Xetra Dax

was off 15.84 to 5642.26, while the Paris

CAC

was 14.89 lower to 4961.01. London's

FTSE

was off 14.8 to 6341.8.

The euro was lately trading at $1.0376, down slightly from $1.0416 late Friday.

In the big Asian markets, fear over possible fallout in U.S. stocks from the Microsoft decision was a good enough reason to book some more profits from last Thursday's huge gains. Stocks in Hong Kong and Tokyo dipped along with the S&P 500 futures trading on

Globex

overnight. The

Hang Seng

fell 89.16, or 0.7%, to 13,521.11, while the

Nikkei

sank 113.92, or 0.6%, to 18,240.98.

The dollar held onto its Friday gains against the yen amid news that the

Bank of Japan

has set plans to buy government debt from the

Ministry of Finance's

Trust Fund Bureau in an effort to help that cash-strapped agency meet upcoming redemptions. The move is being viewed as another incremental step toward an easing of monetary policy, but it isn't set to begin until the new Japanese fiscal year starts on April 1, 2000.

A downward revision of gross domestic product may also have capped the yen. Japan's Economic Planning Agency revised April-June GDP growth to 0.1% from the 0.2% originally reported in September.

The dollar was lately trading at 106.1 yen, near its level in late New York trading on Friday.

Monday's Wake-Up Watchlist

By

Eileen Kinsella

and

Brian Louis

Staff Reporters

Mergers, acquisitions and joint ventures

Arch Communications

(APGR)

and

Paging Network

(PAGE)

agreed to a merger that will combine PageNet's wireless network and products with Arch's accounts and sales presence nationwide. Arch shareholders will retain one share of common stock in the combined company for each share currently owned, while PageNet shareholders will receive 0.1247 share of common stock for each share of PageNet currently owned.

Autocam

(ACAM) - Get Report

has agreed to be bought by

Tital Acquisition

, a company formed by

Aurora Capital Group

of Los Angeles, for $18.75 a share.

Enron

(ENE)

said it would sell its

Portland General Electric

utility unit to

Sierra Pacific

(SRP)

for $2.1 billion in cash.

Globix

(GBIX)

said

Hicks Muse Tate & Furst

would invest $80 million in the company.

HSBC Holdings

(HBC)

,

Republic New York

(RNB)

and

Safra Republic Holdings

have reached a deal to allow HSBC to close its planned acquisition of the two banks.

Prodigy Communications

(PRGY)

is buying

FlashNet Communications

(FLAS)

. Prodigy will issue 0.35 a share for each FlashNet share.

Siebel

(SEBL)

and

Ariba

(ARBA)

announced an e-commerce software alliance.

Williams

(WMB) - Get Report

said it inked a deal to sell

Thermogas

to

Ferrellgas

(FGP) - Get Report

for $432.5 million.

Earnings/revenue reports and previews

(Earnings estimates are from

First Call/Thomson Financial

.)

BP Amoco

(BPA)

said its third-quarter replacement cost profit was $1.955 billion, a 72% increase over the year-ago period, thanks in part to higher oil prices. Meanwhile, BP Amoco and

Atlantic Richfield

(ARC) - Get Report

said Friday they reached a provisional agreement with Alaska in an effort to help BP Amoco move ahead with its planned takeover of Arco.

Complete Business Solutions

(CBSI)

posted third-quarter earnings of 22 cents a share, in line with the seven-analyst estimate, and down from a year-ago 24 cents before charges.

May Department Stores

(MAY)

posted third-quarter earnings of 38 cents a share, in line with the 19-analyst estimate and up from the year-ago 35 cents.

Prime Retail

(PRT) - Get Report

reported third-quarter funds from operations of 38 cents a share, in line with the five-analyst estimate and a penny better than a year ago.

Wyndham International

(WYN)

posted a third-quarter loss of 41 cents a share including charges, compared with a year-ago loss of $1.02 a share, also with charges. The single-analyst estimate was for a loss of 1 cent a share.

Offerings and stock actions

Actuate

(ACTU)

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

Brocade Communications

(BRCD)

set a 2-for-1 stock split.

Detroit Diesel

(DDC)

said it will buy back up to 10% of its shares.

Seagate

(SEG)

set an additional 50 million-share buyback.

Analyst actions

Warburg Dillon Read

started coverage on

Medarex

(MEDX)

with a buy rating.

Miscellany

U.S. District Court Judge Thomas Penfield Jackson released his findings of fact in the

Microsoft

(MSFT) - Get Report

case Friday night, stating in part that the software titan enjoys monopoly power in the personal computer market. For more information, check out

TheStreet.com's

coverage of the Microsoft

decision.

Online grocer

Peapod

(PPOD)

said it has more than $15 million in cash and marketable securities, in response to rumors it is out of cash. The company said it is in talks with parties interested in investing in the company.

Raytheon

(RTN.A)

plans a vast revamp of its defense-electronics business,

The Wall Street Journal

reported, citing people familiar with the situation.

The Heard on the Street column in the

Journal

said a number of software companies whose business is based around Linux, the operating-system software seen as a growing threat to Microsoft, have taken to pitching themselves as dot-coms to tiptoe around the fact that the operating software can be downloaded free from the Internet. The column cites the recent IPO of

Red Hat

(RHAT)

, whose overall success has other Linux-based firms

lining up behind it.