Yesterday's Late Rally Is Spilling Over to This Morning

But the market will have to contend with the latest in profit warnings. This morning, Waste Management confirmed that a review of its accounting procedures will hurt third-quarter results.
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The market is ready to shrug its way higher this morning.

Yesterday, stocks -- or at least a very narrow measure of them -- were able to shrug off enough of the negative sentiment inspired by


(IBM) - Get Report

Y2K-related profit warning to close respectably mixed. This morning, they'll have to shrug off negative warnings from a couple of old familiars,


(G) - Get Report


Waste Management



Gillette issued its latest profit warning

last night, and Waste Management this morning confirmed that its third-quarter results will be hurt by a review of its accounting procedures.

But looking at the stock futures right now, yesterday's late upside momentum hasn't left Wall Street yet. At 9 a.m. EDT, the

S&P 500

futures were up 6.2, about 10 points above fair value and indicating a strong open.

"Part of it is a response to the sentiment that

the recent selling pattern was definitely overdone," said Doug Myers, vice president of equity trading at

IJL Wachovia

. "A lot of people put a fork in it and said, 'Let's eat.'"

Perhaps. But you wouldn't be faulted for doubting the market's early strength today, given how volatile it's been lately and how stiff the competition from the bond market has been looking. The 30-year Treasury was lately up 6/32 to 96 31/32, putting its yield at a still rather succulent 6.351%.

Myers also expects a bit of short covering as the session progresses: "You tend to see a flattening of positions going into the end of the week. If people got short these couple of days, you'll see them cover."

No major economic data are scheduled for release today.

In Tokyo, the


fell 9.47 to 17,438.80. The benchmark index had risen as high as 17,607.66 early in the session, but that strength was tempered by the yen, which picked up strength after the

Ministry of International Trade and Industry

said that Japan's all-industry activity index rose a solid 1.2% in August from July. Investors fear that a strong yen will damage profits at Japan's big export-oriented companies.

The dollar moved from around 106.2 yen toward the 105.2 level in Tokyo trading. It was lately quoted at 105.55 yen.

Hong Kong fared much better, with the

Hang Seng

gaining 340.08, or 2.7%, to 12,863.08 amid rumors of more telecommunications takeovers and hopes that the government's first floating of its blue-chip

Tracker Fund

on Monday won't dry up liquidity as much as previously feared. The Tracker Fund is a

unit trust holding much of the stock the government acquired during its $15 billion market intervention in August of last year.

Yesterday, Hang Seng constituent

Hutchison Whampoa

said it would raise about $33 billion in stock, cash and debt by selling a controlling stake in U.K. mobile-phone company



to Germany's




Today's big telecom deal is coming out of Germany, where

Deutsche Telekom

(DT) - Get Report

set plans to buy the



wireless assets in Poland, Hungary and Russia for about $2 billion.

Deutsche Telekom was helping drive Frankfurt's

Xetra Dax

up 94.31, or 1.8%, to 5340.80 around midsession. The other big European indices were also solidly higher, with the Paris


up 73.16, or 1.6%, to 4675.55, and London's


up 83.3, or 1.4%, to 6022.6.

Friday's Wake-Up Watchlist


Tara Murphy


Brian Louis

Staff Reporters

Consumer goods giant


(G) - Get Report

dropped some bad news after the market closed, warning that it sees fourth-quarter sales and earnings declining as it tries to trim excess inventory. Gillette said it expected its results to bounce back and return to high growth rates "in the near future," according to



took a look at Gillette's announcement in a

story last night. The company announced third-quarter earnings of 32 cents a share, in line with the downward-revised 12-analyst

First Call/Thomson Financial

estimate and up from the year-ago 30 cents. Separately, Gillette said its board authorized the repurchase of an additional 25 million shares as part of its stock buyback plan, bringing the total plan to 100 million shares.

Waste Management


, the garbage-hauling titan, warned that preliminary findings from an internal audit will likely "have a material unfavorable impact" on the company's third-quarter and full-year results.



administration and


reached a pact early today that is expected to clear the way for overhauling Depression-era banking laws,



Mergers, acquisitions and joint ventures

Deutsche Telekom

(DT) - Get Report

is buying

MediaOne Group's


mobile-phone assets in Poland, Hungary and Russia for $2 billion.

Earnings/revenue reports and previews

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

Cincinnati Bell


posted third-quarter earnings of 22 cents a share, a penny better than the six-analyst estimate and up from the year-ago 15 cents a share.



said third-quarter sales rose 14% over last year, but income before taxes fell 19% from the year-ago period.

IXC Communications


posted a third-quarter loss of $2.29 a share, which includes a restructuring charge. The six-analyst estimate was for a $2.27 loss, while the year-ago report was a $3.53 loss, which also included a restructuring charge.

U S West


posted third-quarter earnings of 83 cents a share, beating the 16-analyst estimate of 80 cents and the year-ago 75 cents.

Analyst actions

ABN Amro

sliced its price target on



to 75.

Merrill Lynch




to intermediate-term neutral from intermediate-term accumulate for valuation reasons and "a significant increase in our operating-loss estimates" for fiscal year 2000. Merrill maintained its long-term buy rating on Inktomi, however.

Deutsche Bank

upped its 1999 earnings estimates for


(NOK) - Get Report

by 9% and its fiscal 2000 estimates by 19%, while maintaining its buy rating.

Deutsche Bank sliced its 1999 earnings estimates for



by 5% and its fiscal 2000 estimates by 10%, while maintaining its market perform rating.

Merrill Lynch upgraded

Symbol Technologies


to intermediate-term buy from accumulate.



(INTC) - Get Report

said it plans to roll out its fastest

Pentium III

chips on Monday without its highly anticipated 820 chipset family, which PC makers such as


(DELL) - Get Report

are relying on for their own products' production. The 700-megahertz chipset will compete with

Advanced Micro Devices'

(AMD) - Get Report



chip family.

The Inside Wall Street column in

Business Week

, written by Gene Marcial, offers up a favorable item on

Northrop Grumman

(NOC) - Get Report

, quoting an unidentified New York money manager, who has been buying the stock, as saying that the defense giant "has emerged as the top buyout choice for the likes of

British Aerospace

'' in light of the consolidation taking place in the European aerospace arena.

Also, the column cites Richard Bookbinder, head of

Bookbinder Capital Management

, a hedge fund, who thinks

Silicon Valley Bancshares

(SIVB) - Get Report

is on its way to 50 a share. The stock closed yesterday at 27 5/8.

Concentric Network


is also the subject of a bullish item in the column.