Stocks to Watch: Microsoft, DaimlerChrysler, IBM

The software giant makes concessions to the government, according to reports.
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Microsoft

(MSFT) - Get Report

has made a proposal to the government to settle the antitrust case against it, which makes several major concessions,

The Wall Street Journal

reported. The newspaper said that while some government officials said the offer from Microsoft doesn't go far enough, others said it signaled that the software titan is serious about reaching a settlement. The

Journal

reported that under the Microsoft proposal, software makers and PC makers would be permitted to modify the source code underlying Windows to add rival products and that Microsoft would also offer a version of Windows without its own Internet software.

Mergers, acquisitions and joint ventures

Spain's

Iberdrola

is in talks to buy

FPL Group

(FPL) - Get Report

, the parent of

Florida Power & Light

, in a transaction valued at up to $11 billion, the

Journal

reported, citing people familiar with the matter.

Ahold

(AHO)

, the Dutch supermarket group, said the

Federal Trade Commission

has approved its takeover of

U.S. Foodservice

(UFS) - Get Report

. Ahold is buying U.S. Foodservice for $3.6 billion.

DaimlerChrysler

(DCX)

has

agreed to take a 34% stake in Japanese automaker

Mitsubishi Motors

for $2 billion.

Deutsche Telekom

(DT) - Get Report

has bought a controlling stake in

DaimlerChrysler's

(DCX)

IT services firm

Debis Systemhaus

.

Home Properties

(HME)

said it is considering strategic alternatives for its affordable housing development unit,

Conifer Realty

, including a public spinoff or a sale of all or part of Conifer.

IBM

(IBM) - Get Report

and

Qwest Communications

(Q)

set a multiyear pact to deliver e-business services and applications via the creation and deployment of Qwest's Internet data centers. The companies expect more than $5 billion in revenue is expected from the agreement and will be split almost equally between the two companies.

Liberty Media

(LMG.A)

said it will buy a 9% stake in

IDT

(IDTC)

for $130 million.

Monsanto

(MTC) - Get Report

said it will sell its sweetener ingredient business to

JW Childs

for $440 million in cash.

OpenTV

(OPTV)

is buying

Spyglass

(SPYG) - Get Report

in a stock swap valued at $2.5 billion. Under terms of the deal, OpenTV will acquire all of Spyglass' outstanding stock in a tax-free stock swap. Spyglass shareholders will receive 0.7236 OpenTV Series A ordinary share in exchange for each share of Spyglass stock they own. Based on OpenTV's closing stock price on March 24, the deal values Spyglass at $122.28 a share, a whopping premium to Spyglass' closing price Friday of 69 7/8.

PaineWebber

(PWJ)

is in discussions to buy regional brokerage firm

J.C. Bradford

, which is based in Nashville, the

Journal

reported, citing people familiar with the talks. The

Journal

story said PaineWebber declined to comment, while closely held J.C. Bradford said it doesn't comment on rumors.

Talk.com

(TALK)

is buying privately held

Access One Communications

, a private, local telecommunications service provider to nine states in the Southeast for $200 million in stock.

Separately, Talk.com said it reached a deal with

Soros Private Equity Partners

to invest $80 million in the company in exchange for 80,000 shares of 7% convertible preferred Talk.com stock, which is convertible into 4.5 million shares of Talk.com's common stock and warrants to acquire 200,000 shares of stock at $17.91 a share. Also, the company said a partner of Soros Private Equity Partners will join the company's board.

Earnings/revenue reports and previews

(

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

):

Waste Management

(WMI)

posted fourth-quarter pro forma net income of 32 cents a share, 2 cents shy of the eight-analyst estimate. Waste Management expects proceeds of $3 billion from the sale of international and nonstrategic or underperforming assets, the majority of which is expected during the second and third quarters of this year. The company plans to use $2 billion of these expected proceeds to pay down debt. Waste Management anticipates posting revenue in the range of $3 billion to $3.1 billion in the first quarter.

Datalink

(DTLK)

said it will modify its earnings in response to the

Securities and Exchange Commission's

revenue policy. The company said it will take an undetermined first-quarter charge due to the accounting change.

Finova

(FNV) - Get Report

is taking a special charge of $80 million to bolster loss reserves and provide payment of deferred compensation and executive severance. The additional loss reserves will be used to cover write-offs in the first quarter related to a $70 million loss on a major customer of Finova's Distribution & Channel Finance unit. The remainder of the charge will be used to provide payment of deferred compensation and severance to Samuel L. Eichenfield, chairman, president and CEO, who, it was announced this morning, is taking an early retirement for health and personal reasons. Finova said that excluding the charge, the company expects to meet Wall Street's expectations for the first quarter. The company also said it's "comfortable" with meeting consensus earnings estimates for the rest of the quarters of the year.

Red Hat

(RHAT)

posted a fourth-quarter loss of 4 cents a share, a penny narrower than the four-analyst estimate, but wider than the year-ago loss of 3 cents a share.

Offerings and stock actions

Philips Electronics

(PHG) - Get Report

said it sold 20% of its holding in U.S. fiber-optics firm

JDS Uniphase

(JDSU)

. Philips said its first-quarter results would include a $509.7 million aftertax gain from the sale.

Analyst actions

IBM

(IBM) - Get Report

: UP at

Morgan Stanley Dean Witter

,

CNBC

said.

Angiotech Pharma

(ANPI)

: NEW buy at

Deutsche Bank Alex. Brown

; 12-month price target: 70.

Carbo Ceramics

(CRBO)

: INITIATED at

Lehman Brothers

; 12-month price target: 37-38.

Onvia.com

(ONVI)

: NEW strong buy at

Credit Suisse First Boston

.

Rare Medium

(RRRR)

: INITIATED strong buy at CSFB; 12-month price target: 80.

Miscellany

US Airways

(U) - Get Report

and its flight attendants union reached a tentative deal on a new contract this morning. The pact is still subject to ratification by the union membership.

Colgate-Palmolive

(CL) - Get Report

named Lois D. Juliber COO responsible for operations in Europe, Latin America, Asia, the South Pacific, Central Europe, and Africa. In other personnel news out of the company, it promoted Javier G. Teruel to the newly created position of chief growth officer; Ian M. Cook was promoted to executive vice president, where he will continue as president of Colgate North America and have additional responsibility for Colgate Oral Pharmaceuticals, the company's professional oral care business; and Michael J. Tangney was promoted to executive vice president, where he will continue as president of Colgate Latin America, the company's largest division in terms of sales and profits.

NBC Internet

(NBCI)

said William J. Lansing, former chairman and CEO of

Fingerhut

, and a former senior exec at

General Electric

(GE) - Get Report

, has been named CEO, succeeding Chris Kitze, who has been appointed vice chairman.

The Heard on the Street column in the

Journal

said quick moves by individual investors have helped power the current stretch of the nearly 10-year old bull market run. Participation by individual investors has also contributed to the by-now familiar lurches in stock prices and soaring valuations of technology stocks, according to the story. The change comes after years in which the stock market has largely been dominated by big institutions, usually leaving small investors with the leftovers, the story said.

For analysis of the market's preopen tone and trends, see the Wake-Up Call, published separately.