Stocks Set to Move Higher Early

The last hour has brought some firming in the bonds and the S&P 500 futures, improving the outlook for the open.
Publish date:

It looks like technology is going to pull another rally out of its hat this morning.

At 9:05 a.m. EST, after spending much of the morning around break-even, the

S&P 500

futures were up 4.3. Since they closed nearly 4 points below fair value last night, that points to some rather modest strength for the underlying index. But tech stocks in particular were getting rather good bids in the premarket, led by



, exploding nearly 40 points higher on



last night's earnings report and split announcement.

The stock market hasn't seemed to care much about the bond market lately, but yields continue to move toward levels that stocks have had difficulty with in the past. The 30-year Treasury was lately off 8/32 to 97 2/32, swelling its yield to 6.345%.

The bonds had been down as much as 15 ticks before the release of the morning's economic data -- data that was, on the surface at least, not very bond-friendly. The

Commerce Department

said that the

trade deficit

widened to a record $25.94 billion in October from a revised $24.41 billion the month before. And

initial jobless claims

for the week ended Dec. 11 declined sharply to 266,000 from the prior week's revised 295,000.

Later this morning, at 10 a.m., the bond market will get a look at the December

Philadelphia Fed


"I thought the key would be the response to the trade deficit data, which were worse than anticipated," said Bill Meehan, chief market analyst at

Cantor Fitzgerald

. "But the response in the bonds was pretty muted. As long as the bonds remain within their trading range" -- with yields below 6.4% -- "I think we'll see more of the same until year-end."

The major European indices were all higher in early afternoon trading. London's


was up 58.2, or 0.9%, to 6692.0, while the Paris


was 24.57 higher, or 0.4%, to 5554.70. Frankfurt's

Xetra Dax

was up 97.22, or 1.6%, to 6329.97, primed by a stronger-than-expected survey of West German business confidence.



research institute's confidence survey rose to 98.9 in November from 96.1 last month, well above market expectations, and the latest in a string of good indications for Germany, the euro-zone's largest economy. The news helped the euro spike upward from the $1.006 level in early London trading; it was lately quoted at $1.0138.

Hong Kong equities took a big hit for the second straight day. After falling more than 450 points yesterday, the

Hang Seng

dropped 253.95, or 1.6%, to 15,571.36. Before today's losses, the benchmark index had gained more than 57% on the year.

In Tokyo, stocks struggled through a mixed session, the


sinking 27.05 to 18,111.31. The yen edged higher overnight against the dollar, which fell from the 103.5-yen level to as low as 102.6. The greenback was lately sitting back up at 102.88 yen.

Thursday's Wake-Up Watchlist


Tara Murphy

Staff Reporter

Mergers, acquisitions and joint ventures



said it has agreed to purchase closely held


, in a stock deal valued at $1.96 billion. Ariba said it expects the transaction to be completed in the second quarter of 2000.



said it has agreed to a pact with

Liberty Media


involving direct marketing initiative over cable. Cendant said Liberty Media would invest $400 million in Cendant, while Liberty's CEO John Malone, will buy 1 million shares.

Cox Communications


said it has entered an agreement with


(ATHM) - Get Report

to jointly develop digital services.


(IBM) - Get Report

said after yesterday's close that it has been awarded a deal with

Deutsche Telecom

to supply the biggest data system warehouse ever. The data system, known as


, which is set to begin development in the third quarter of 2000, will be able to handle 100 terabytes of information.

Vodafone Airtouch

(VOD) - Get Report

said it agreed to a pact with the


to equip mobile phones in Britain with text, audio and video services, including news.

Shorewood Packaging


said it has rejected



$17.25 a share offer, calling it inadequate.


(WMT) - Get Report


America Online


said they will form a strategic pact to launch a jointly branded Internet access provider. The two companies said they would use cross-marketing efforts, which include Wal-Mart issuing AOL software at its stores and joint advertising through print, television and radio .

Earnings/revenue reports and previews


Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.



(AIR) - Get Report

reported second-quarter earnings of 40 cents a share, missing the seven-analyst estimate of 42 cents but up from the year-ago 36 cents a share.

Bed Bath & Beyond

(BBBY) - Get Report

reported after yesterday's close third-quarter earnings of 22 cents a share, in line with the 19-analyst estimate and up from the year-ago 17 cents. The company said it plans to open five superstores in the fourth quarter, and 60 new superstores in fiscal 2000.



posted after yesterday's close a narrower-than-expected loss and announced a 2-for-1 stock split.

CMGI posted a first-quarter loss of $1.08 a share, smaller than the three-analyst estimate of a loss of $1.76 a share, but down from the year-ago profit of 38 cents a share. CMGI said, excluding items, the company lost 10 cents a share for the quarter. Revenue jumped to $123.7 million in the latest quarter, from $37.4 million a year ago.

The stock split will be distributed Jan. 11 to shareholders of record Dec. 28.


(FDX) - Get Report

reported second-quarter earnings of 57 cents a share, beating the 12-analyst estimate of 55 cents but down from the year-ago 61 cents.

Gtech Holdings


posted third-quarter earnings of 65 cents a share, beating the single-analyst estimate of 63 cents a share and up from the year-ago 64 cents.

Offerings and stock actions

Merrill Lynch

priced a 51.2 million shares of

Infonet Services


at $21 a share.



said it has set a repurchasing plan to buy back up to 5% of its outstanding stock.

Vitra Technology


said it set a 2-for-1 stock split.

Analyst actions

Bear Stearns

rolled out coverage of

American National Can


with a neutral rating.

Bear Stearns began coverage of



with a neutral rating.

Morgan Stanley Dean Witter

upped its price target on


(STM) - Get Report

to 120 euros from 175 euros and maintained a strong buy rating.


Standard Pacific


said it has tapped Stephen Scarborough to become its CEO.


Tara Murphy