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Time Warner



America Online


received the European Commission's conditional approval of their merger, the companies said in a joint press release today.

The statement said that both companies are confident that proceedings with U.S. regulators will conclude successfully and that the merger is on track to close in the fall. Time Warner closed down $3.71, or 4.4%, to $81.39; AOL was down $2.36, or 4.1%, to $54.88.



posted third-quarter earnings of 13 cents a share, beating by a penny the 32-analyst estimate and up from year-ago earnings of 6 cents a share. But the company didn't quell fears that sales were slowing.

wrote about the company's

cautious words in a separate story. Yahoo! ended the day down $17.31, or 20.9%, to $65.38.

A day after releasing its third-quarter results, cell-phone and chipmaker



decided to get all the other negative news out of the way early. The company lowered earnings expectations for the fourth quarter and for 2000 and 2001, blaming slower-than-expected growth in mobile-phone units.

The company and said it was dropping its estimate for phone unit sales to between 410 million and 425 million from a previous range of 425 million to 450 million. It also said the euro would be responsible for the loss of about 3 cents of earnings per share in the fourth quarter. But the company added that it expects 20% growth for its global telecommunications unit in the fourth quarter.

Analysts have responded by downgrading the company.

Morgan Stanley Dean Witter

cut the company to outperform from strong buy, and

Merrill Lynch

cut earnings estimates on the company.

For more, check out's


story. Motorola closed down $4.69, or 17.9%, to $21.56.

The attack dogs, sensing the wounded, were feasting.

Lucent Technologies


got hammered after the company's earnings warning yesterday and several downgrades from analysts earlier today.

Analysts took a blunt object to Lucent after the company cut its growth outlook for the fiscal fourth quarter. The company said lower-than-expected optical sales and declining sales in your garden-variety telephone circuit-switching equipment ('cause it's all about fiber optics these days, guys) was responsible for the expected shortfall.

In a note, analysts at

W. R. Hambrecht

pointed out that the loss of market share in fiber optics for leading names such as







Sycamore Networks


was hurting Lucent.

And since technology is moving away from traditional switching, other analysts are hardly optimistic.

The roll call goes like this:

ABN Amro

cut the company to hold from outperform;

Credit Suisse First Boston

dropped it to buy from strong buy, and Morgan Stanley Dean Wittercut it to outperform from strong buy. Merrill Lynch and


cut earnings estimates but left its rating alone;

Lehman Brothers

maintained its neutral rating, but resignedly said it expects another downward adjustment to guidance when the company reports results Oct. 24.

Earnings for the fourth quarter are expected to come in around 17 cents to 18 cents a share, lower than the 27 cent

First Call/Thomson Financial

estimate. Lucent ended the day down $10, or 31.9%, to $21.38. Nortel was up 94 cents, or 1.6%, to $60.94; Ciena was down $2.69, or 2.3%, to $112; and Sycamore Networks closed down $5.69, or 7.3%, to $72.69.

For more, check out's

extended coverage:

Another Shortfall Deepens Lucent's Dive


Lucent Warns, but Many Fund Managers Exited Earlier


Mergers, acquisitions and joint ventures

France Telecom


confirmed it is in talks with Amsterdam-based



about a possible alliance, but the French company said a transaction is unlikely in current market conditions.

There were reports earlier today that France Telecom was close to an agreement to pay $10 billion for Equant and merge it with its own

Global One

unit. According to the reports, the companies were in talks earlier this summer, but broke them off when they couldn't agree on a price. France Telecom ended the trading day down $4, or 4.5%, to $85.25, while Equant was down $1.38, or 3.9%, to $33.50.



, a leading specialist firm on the

New York Stock Exchange

, has agreed to buy privately held

Robb Peck & McGooey

, the sixth-largest specialist firm on the Big Board, for $286 million in stock.

Specialists manage the buying and selling of a stock on the exchange floor, making their money by keeping the difference. The deal advances the consolidation in the market-making industry, with brokers such as

Merrill Lynch



Goldman Sachs


buying stock-dealing houses.

LaBranche closed down $1, or 3.4%, to $28.38. And just for the heck of it: Merrill Lynch closed up $1.06, or 1.8%, to $59.06, and Goldman Sachs was up $1.31, or 1.3%, to $104.



, which provides telephone service over the Internet, said today that PC-maker



will begin bundling its YAP phone with its new Compaq Presario computers. Net2Phone closed down $2.36, or 9.8%, to $21.81; Compaq was down 6 cents, or 0.3%, to $24.19.

After Tuesday's Close



, provider of services to improve Web site performance, agreed to acquire privately held


for about $440 million in stock. Entera provides technologies for streaming Internet content. CacheFlow ended the day down $1.88, or 1.7%, to $108.13.


Federal Reserve approved

Wells Fargo's


acquisition of

First Security


. Wells Fargo closed down 94 cents, or 2.1%, to $43.88, and First Security was down 38 cents, or 2.4%, to $15.44.

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Earnings/revenue reports and previews

Alaska Air


warned that its third-quarter earnings would come in between 50 cents and 70 cents, well below

First Call/Thomson Financial's

11-analyst estimate of $1.26 a share.

The company blamed its missed earnings in part on a 3.2% decline in available seats, an increase fuel expenses and higher labor and maintenance costs. The airline closed down $3.44, or 13.96%, to $21.19.

Newspaper publisher



posted third-quarter earnings of 79 cents a share, in line with the 14-analyst estimate and above the year-ago 70 cent earnings. Gannett ended the day up 31 cents, or 0.6%, to $52.

General Electric


posted third-quarter earnings of 32 cents a share, in line with the nine-analyst estimate and up from year-ago earnings of 27 cents a share.

The company said its earnings, which grew 20%, were fueled by strong growth in its power- and medical-systems businesses. GE closed down $1.50, or 2.6%, to $56.56.

Publishing company

Harcourt General


said it expects to list a one-time charge of about $100 million in its fourth quarter. The charge stems from lease liabilities resulting from the bankruptcy filing by its affiliate

GC Cos

, the parent of General Cinema Theaters. Harcourt closed down $2, or 3.3%, to $58.85.

Upscale retailer



hurt its retailing brethren today. The company warned that its earnings would not make estimates due to softer-than-expected sales and bigger-than-planned markdowns. The company is also taking a charge related to its losses in online grocer


Excluding charges, results are expected to drop to 18 cents to 21 cents a share for the quarter. Including charges, earnings are expected to be trimmed in the third quarter by 23 cents to 27 cents a share from the First Call/Thomson Financial consensus of 25 cents a share.

Investors were concerned that a slowdown in consumer demand and (warning -- here comes another lame blame-the-weather excuse) a mild summer would hurt have retail sales. But retail stocks have been in the dumps pretty much all year.

Nordstrom ended the day down $1.06, or 6.8%, to $14.63.

Health-care provider

PacifiCare Health


announced that it expects to report lower-than expected earnings due to higher-than-expected costs. It said it expects to report results ranging from break even to a loss of as much as 10 cents a share. Analysts had expected Pacificare to earn $1.90 a share. The stock closed down $16.94, or 51.9%, to $15.69.



announced that it anticipates third-quarter earnings of at least 21 cents per diluted share, a penny above analysts' target and 40% above the year-ago result. Tiffany ended the day up 38 cents, or 1.1%, to $35.88.

After Tuesday's Close

Biopharmaceutical company



posted a 44 cent profit, beating the 21-analyst estimate by a penny and up from the year-ago 39 cent result. The company closed down $1.25, or 2.4%, to $50.25.

Not all preannouncements are negative. Case in point:

Rare Hospitality


said it expects to report third-quarter earnings of 25 cents a share, 5 cents ahead of the current seven-analyst First Call/Thomson Financial estimate. The company cited hot growth at its

LongHorn Steakhouse


Capital Grille


Bugaboo Creek

restaurants. Rare Hospitality closed up 56 cents, or 2.9%, to $20.13.

Seagate Technology


reported first-quarter earnings of 26 cents a share, topping the six-analyst 21 cent estimate and the year-ago 7 cent result. Seagate closed up $3.81, or 6.1%, to $66.75.

Another case in point:

Trigon Healthcare


said it expects its third- and fourth-quarter earnings to beat analysts' expectations, citing strong investment income, better cost containment and big enrollment gains. The managed-care provider said it expects to report third-quarter earnings of 89 cents to 93 cents a share, well ahead of the 15-analyst view of 79 cents. For the fourth quarter, Trigon sees earnings of 82 cents to 86 cents, compared with the 13-analyst forecast of 80 cents.

The stock's third-quarter earnings estimates were raised to 93 cents a share from 80 cents at

Merrill Lynch

; fourth-quarter earnings were upped to 86 cents a share from 81 cents; 2000 EPS estimates were lifted to $3.29 from $3.10 and 2001 EPS were raised to a range of $3.75 to $3.85 from a range of $3.55 to $3.60. Trigon ended the day up $4.50, or 7.6%, $64.



reported third-quarter earnings of 15 cents a share, 2 cents better than the six-analyst outlook. ViaSystems ended down 63 cents, or 4.6%, to $12.94.

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Analyst actions

A.G. Edwards

slashed its ratings to reduce from maintain on





. closed down $1.34, or 19.8%, to $5.44; Webvan was down 6 cents, or 3.3%, to $1.81.



: NEW buy at

ABN Amro

; price target: $145. closed down $18.94, or 17.1%, to $91.56.

Group Moves

Lehman Brothers

upgraded 12-month price targets on four managed-care firms:

  • Humana (HUM) : UP to $13 from $9.50. Humana ended the day down 44 cents, or 3.8%, to $11.
  • WellPoint (WLP) : UP to $120 from $100. WellPoint closed up $1.06, or 1.1%, to $98.
  • UnitedHealth Group (UNH) : UP to $120 from $105. UnitedHealth closed down 38 cents, or 0.4%, to $105.50.
  • Cigna (CI) : UP to $130 from $120. Cigna ended the day up $1.55, or 1.4%, to $112.05.

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Offerings and stock actions

Eaton Vance


said its board announced a 2-for-1 stock split; the company also said it would repurchase up to 4 million shares. The stock closed down 56 cents, or 1.2%, to $44.63.



said its board had approved a 2-for-1 stock split, which, according to CEO, Chairman and President Arnold Zetcher, was the company's first since its 1993 IPO. Talbots ended the day higher by 31 cents, or 0.4%, to $71.88.



raised its quarterly dividend 3.7% to $0.035 per share. Walgreen closed up 56 cents, or 1.4%, to $39.69.

After Tuesday's Close


set the price range and size of its planned IPO. It will trade under the

Nasdaq ticker "ILON." The Ocala, Fla.-based company, which makes devices for connecting home electronics via electrical lines, will offer 6.25 million shares from $11 to $13.

Merrill Lynch


Bear Stearns


Wit SoundView

are underwriting the offering.

Watson Wyatt


, a benefits and Human-resources consulting firm based in Bethesda, Md., priced its 5.6 million share IPO at $12.50 a share.

Deutsche Banc Alex. Brown

was the lead underwriter. The expected price range had been $11.50 to $13.50. Watson Wyatt ended the day higher by $3.88, or 31%, to $16.38.

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Managed-care provider

Coventry Health Care


announced that its Group Health Plan subsidiary in St. Louis will receive $7.4 million from a settlement with Unity Health Network. Coventry ended the day up 13 cents, or 0.8%, to $16.13.

Global Crossing's


CEO Leo Hindery resigned after only seven months on the job. Vice Chairman Thomas Casey will replace him.

This morning,

The Wall Street Journal

cited someone close to the company as saying Hindery stepped down by "mutual agreement" and will continue as chairman and CEO of Global Crossing's


unit. Hindery was originally hired to run GlobalCenter -- which was recently acquired by

Exodus Communication


for $6.5 billion in stock -- but was tapped for the top spot after predecessor Robert Annunziata's surprise departure in March.

The article said Global Crossing's board felt it needed a CEO more involved in all aspects of its business. Hindery has been focused on GlobalCenter's Acquisition -- in which he will make as much as $247.5 million in stock -- as well as involved as an investor or board member in other businesses. Hindery will stay on at GlobalCenter until its deal with Exodus is completed.

Global Crossing closed down $2.44, or 10.2%, to $21.44; Exodus was down $2.31, or 5.8%, to $37.50.



said W. August Hillenbrand will retire as chief executive, effective Dec. 1. Frederick Rockwood, the company's president, will take on the additional duty. He will be the first person outside the family to run the company, which makes caskets, finances funerals and provides beds and stretcher to hospitals. Hillenbrand closed down 31 cents, or 0.7%, to $44.44.

Tenet Healthcare


reported that its preliminary count of shareholder votes indicates that it will re-elect the company's nominees for directors. The health-care services firm has been fighting certain shareholders for control of its board of directors. Tenet closed up $1.63, or 4.2%, to $40.06.

After Tuesday's Close

Magazine publisher

Penton Media


said it has formed four operating units in an effort to boost growth and development. The groups are Technology Media, Industry Media, Retail Media and Lifestyle Media. Penton closed down 50 cents, or 1.8%, to $28.

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By the Numbers

The data on NYSE and Nasdaq percent winners and losers are filtered to exclude stocks whose previous day's volume was less than 25,000 shares; whose last price was less than 5; and whose net change was less than 1/2.

Dow point gain and loss data are based on New York closing prices and do not reflect late composite trading.

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