Stocks Set to Rally This Morning

A late charge in the S&P 500 futures has the Nasdaq ready to surmount the 3K barrier again.
Publish date:

A late surge in the futures markets has stocks headed toward a big open this morning.

At 9:05 a.m. EST, the

S&P 500

futures were up 10.2, about 7 points above fair value and indicating a very strong open. That's just about how things have looked at this point for each of the past two sessions, and we know what that led to: solid rallies on solid breadth evaporating late in the afternoon, with the blue-chips finishing modestly lower and the


eking out consecutive record closes.

"I'm inclined to think we're going to see the same kind of action," said Todd Clark, head of listed trading at

Volpe Brown & Whelan

. "All the cash put to work early in the day, and then the market comes

back afterwards." Clark noted that the S&P 500 futures had what technicians call an "outside day" yesterday -- that is, they traded in a range both higher and lower than the previous session's highs and lows. That suggests risk to Clark.

"I'm a little cautious to chase the market higher here at the open," he said.

Investors starved for big M&A deals have something very meaty to chew on this morning, or at least gum.

The Wall Street Journal

has reported that perennial bridesmaid

American Home Products





are in talks to combine in a deal worth about $65 billion. Hopes of further consolidation could heat up the drug sector today.

Meanwhile, keep your eye on


(QCOM) - Get Report

. The company

announced upside earnings and a 4-for-1 stock split last night, and its stock is certain to explode higher when it opens this morning. Qualcomm, which has been tearing up the Nasdaq all year long, was lately indicated up 25 1/16 to 250 in premarket trading.

Stocks may have to contend at some point with the bond market, which isn't providing any upside direction for stocks this morning. The 30-year Treasury was lately down 7/32 to 99 17/32, putting the yield at 6.159%. The December bond futures were down 7/32 to 113 10/32.

No major economic data are scheduled for today. At 2 p.m., the

Federal Reserve

will release its

Beige Book

, a beige-covered anecdotal report on economic conditions around the country. The closely watched

jobs report

comes out on Friday.

Tokyo markets were closed for National Culture Day. But the holiday couldn't stop beleaguered PC maker

Packard Bell

. Majority owner



announced that it will pull the plug on Packard Bell's U.S. operations, firing up to 88% of its workforce there.

The yen edged higher against the dollar overnight in regional Asian forex markets. The dollar fell clear below the 104-yen level, trading as low as 103.59 yen before bouncing. The greenback was lately quoted at 104.49 yen.

In Hong Kong, the

Hang Seng

closed down 78.51, or 0.6%, to 13,257.33 in another day of very light volume. Heavy buying in index heavyweight

China Telecom

had driven the Hang Seng up more than 1% in early trading before profit-taking set in late in the session. Construction stocks got a delayed pop from the government's theme park deal with Disney. (

took an extended look at Disney's prospects in

a story last night.)

The big European indices had recovered from early selling and were higher in early afternoon trading ahead of tomorrow's meetings of the

European Central Bank

and the

Bank of England

. Frankfurt's

Xetra Dax

was up 33.98, or 0.6%, to 5580.93, while the Paris


was up 14.79 to 4913.31. London's


was 36.6 higher, or 0.6%, to 6288.6, helped by drug stocks brimming over on consolidation speculation related to the AHP/Warner-Lambert report.

Both the BOE and the ECB are widely expected to raise interest rates tomorrow, the BOE by a quarter-point, and the ECB by as much as 50 basis points.

The euro was lately quoted at $1.046.

Wednesday's Wake-Up Watchlist


Tara Murphy


Brian Louis

Staff Reporters

American Home Products





are negotiating a $65 billion merger that would join two of the world's largest pharmaceutical companies,

The Wall Street Journal

reported. AHP Chairman John Stanford would likely be tapped as chairman of the merged company, while Warner-Lambert Chairman Lodewijk J.R. de Vink would probably become CEO, the newspaper said.


(QCOM) - Get Report

posted fourth-quarter operating earnings of 91 cents a share, beating the

First Call/Thomson Financial

16-analyst estimate of 88 cents and the year-ago 27 cents. Qualcomm also said its board approved a 4-for-1 common stock split and would hold a special meeting in December to vote on the split. For more details on Qualcomm's quarter, take a gander at the

story reported by


Mergers, acquisitions and joint ventures

America Online




(BBI) - Get Report

set a multiyear pact whereby Blockbuster will become the premier home video provider on AOL's Entertainment Channel, while AOL will be heavily promoted through Blockbuster. As part of the pact, AOL will make a $30 million equity investment in


American Greetings

(AM) - Get Report

is acquiring

Gibson Greetings


for $10.25 a share in cash, or $162.3 million. American Greetings said the takeover is expected to be additive to earnings in the upcoming fiscal year.

General Electric's

(GE) - Get Report


has offered about $700 million for

Chronicle Publishing's

San Francisco


television station, the


reported, citing people familiar with the bid.

Earnings/revenue reports and previews

(Earnings estimates are from First Call/Thomson Financial.)

AXA Financial


posted third-quarter earnings of 54 cents a share, a penny ahead of the 12-analyst estimate and up from the year-ago 31 cents.

Kenneth Cole


posted third-quarter earnings of 57 cents a share, beating the seven-analyst estimate of 53 cents and up from the year-ago 42 cents.

Cyprus Amax


reported a third-quarter loss of 17 cents a share, wider than the six-analyst estimate of a 16-cent loss but narrower than the year-ago 38-cent loss.


(HRC) - Get Report

posted third-quarter earnings of 16 cents a share, in line with the nine-analyst estimate but down from the year-ago 28 cents.



posted third-quarter earnings of 57 cents a share, missing the 11-analyst estimate by a penny and down from the year-ago 74 cents.

Tommy Hilfiger


posted fiscal second-quarter earnings of 79 cents a share, ahead of the 15-analyst estimate of 73 cents and above the year-ago 60 cents.



reported third-quarter earnings of 7 cents a share, missing the 16-analyst estimate of 9 cents and down from the year-ago 15 cents.

United HealthCare

(UNH) - Get Report

posted third-quarter earnings of 81 cents a share, beating the 22-analyst estimate of 78 cents and ahead of the year-ago 66 cents.

Offerings and stock actions



said it set a $40 million addition to its existing stock buyback.

Donaldson Lufkin & Jenrette


Be Free's


5.6 million-share IPO top-range at $12.

Goldman Sachs

is poised to price



25 million-share IPO today. For more on Webvan, check out's

Adam Lashinsky's


Analyst actions

Morgan Stanley Dean Witter

sliced its rating on

Beckman Coulter


to neutral from outperform.

J.P. Morgan

sliced its rating on


(NAV) - Get Report

to market perform from buy.

J.P. Morgan downgraded shares of


(PCAR) - Get Report

to market perform from buy.

Merrill Lynch

rolled out coverage of

Spanish Broadcasting


with a buy rating and a price target of 36.


Intimate Brands'


October same-store sales rose 10%.