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Dow's Latest Move Is Up as Search for Direction Continues

A midmorning swoon has given way to a midsession improvement, but there's little confidence just yet.
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By midday, the

Dow Jones Industrial Average

was showing some of that "little engine that could" attitude that Wall Street has been hoping for after its two-day red streak. After a midmorning derailment, the blue-chips chugged back into positive territory.

The Dow was up 36 to 10,560, led by




J.P. Morgan




Nasdaq Composite Index

, continued to falter a tad after yesterday's gains, but was down just 1 to 2857 after trading as low as 2830.24.

"People are generally cautious," said Barry Berman, head of stock trading at

Robert W. Baird

, citing oil price increases, the

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and earnings as possible explanations for the markets performance.

The merger announcement between






brought mixed news to the

Nasdaq Stock Market

, with shares of MindSpring skidding 11% while EarthLink popped 5.3%.



, soaring 17.5%, and



were at their best after receiving positive analyst comments.

"The Fed raising rates and the possibility of another rate increase is weighing on the market," said Steve Goldman, stock market strategist for


in Greenwich, Conn., speaking before the market upturn of recent minutes. "With the blue-chips bouncing and the average stock continuing to fail, we're starting to move down a road of continued weak internals and could see the trading range decline below 10%."

The dollar was quoted midday at 104.15 yen, showing little change from yesterday's position. Goldman said the trend of focusing on the two currencies' relationship to gauge the market is "for a lack of a better commentary on the market. We are not seeing any evidence in bond prices."

Other major stock proxies were mixed, with the

S&P 500

up 1 to 1312 while the

Russell 2000

remained down 1 to 427. Internet Sector

index was up 1 to 652 in a recent return to the plus side, but



, down 3.9%, and MindSpring were countering the rallying



and keeping the index from a bigger breakout. Outside the DOT,



was jumping 4 to 153 1/16.


New York Stock Exchange


Rite Aid


needed some Band-Aids, bleeding 1 13/16, or 13%, to 12 3/16, after the Florida Attorney General's Office brought charges of civil theft and racketeering against the drugstore chain, alleging it charged customers different prices for the same prescriptions.



was down 4.9% after earnings trends and management restructuring changes spurred

Lehman Brothers

analyst Nick Lobaccaro to recommend that investors take their money elsewhere, namely to



. Shares of Ford were up 1/8 to 49 15/16.

On the Big Board, decliners were leveling advancers 1,592 to 1,189 on 500 million shares, while on the Nasdaq laggards were also edging out leaders 1,840 to 1,634 on 644 million shares. New 52-week lows were pummeling new 52-week highs on the NYSE, 159 to 21, but on the Nasdaq new highs were beating new lows 76 to 67.

On the bond front, the benchmark 30-year Treasury was up 19/32 to 100 1/32, its yield easing to 6.05%. (For more on the fixed-income market, see today's early

Bond Focus.)

Thursday's Midday Watchlist

By Eileen Kinsella
Staff Reporter


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


EarthLink climbed 2 5/16, or 5.3%, to 45 13/16 and MindSpring slipped 3 9/16, or 11%, to 29 5/16 after the companies said they will merge in a deal valued at about $1.7 billion. Under the terms of the agreement , MindSpring holders would receive 1 share of the new company for each of their shares, while EarthLink holders would get 1.615 shares for each of their shares.

Mergers, acquisitions and joint ventures



added 1/6 to 9 3/4 after saying it offered to negotiate to buy

Cronos Group


, but said it was prepared to solicit proxies from its shareholders in a bid to overpower its board. Shares of Cronos were halted on the

Nasdaq Stock Market

for news dissemination at 3 3/4.

ITT Industries


slipped 11/16 to 33 5/16 after announcing plans to acquire



space division for $191 million. Stanford climbed 2 5/8, or 7.9%, to 31 7/8.

Jakks Pacific


rose 2 7/8, or 8.8%, to 36 1/8 after it said it would acquire the

Flying Colors

business of privately held

Colorbok Paper Products




slipped 11/16 to 21 7/8 after the company said it would sell its Oregon newsprint mill for $220 million.



lost 1/4 to 75 after saying it plans to pay $24.50 per share to buy

Litchfield Financial


lately up 6 3/16, or 34.9%, to 23 15/16.

Tradepoint Financial Networks


Credit Suisse First Boston


Dresdner Kleinwort Benson


Merrill Lynch


joined a consortium of banks and brokerages which own more than half of the London-based electronic stock exchange. Shares of Merrill fell 7/16 to 70 3/8.



fell 1/2 to 36 9/16 after forging a solid agreement with



, a merger that would generate $12.4 billion in revenue. Peco lost 1 1/8 to 37.

Earnings/revenue reports and previews

Allegheny Teledyne


edged down 11/16 to 16 13/16 after warning investors it would post third-quarter earnings between 17 cents to 21 cents a share, greatly missing the nine-analyst estimate of 28 cents. The company blamed the disappointing results on softness in oil and gas markets.

ASI Solutions


dropped 2 7/16, or 34.8%, to 4 3/4 after warning that second and third-quarter profits may fall below the year-ago period due to slack revenues.



climbed a 1/4 to 5 3/4 after it said it would take a third-quarter charge of 9 cents a share. The company said, excluding the charge, earnings per share would be in the range of analyst estimates. Chiquita also said it would eliminate 200 positions.

Bed Bath & Beyond


added 1/8 to 32 1/8 after

last night posting second-quarter earnings of 23 cents a share, beating both the 17-analyst estimate of 22 cents and the year-ago 18 cents.

Lehman Brothers


rose 1/8 to 55 3/8 after posting third-quarter earnings of $2.20 a share, beating both the 11-analyst estimate of $2.01 and the year-ago $1.10.

Global Crossing


jumped 2 3/16, or 9%, to 26 9/16 after yesterday announcing voter approval for its proposed merger with




Standard & Poor's

said Global would take Frontier's place in the S&P 500 index.

Texas Industries


added 5/8 to 33 1/8 after reporting first-quarter earnings of 75 cents a share, easily beating the five-analyst estimate of 49 cents but down from the year-ago $1.17.

Offerings and stock actions

Interactive Intelligence


was flying 17 3/4, or 136.5%, to 30 3/4 in its trading debut after being priced at $13 a share.

Network Associates


slipped 1/16 to 21 9/16 after it said its

division has filed an IPO for $57.5 million of Class A common shares.

R.R. Donnelly & Sons


added 9/16 to 29 11/16 after the company approved a stock buyback of up to $300 million in the next year.

Analyst actions

A number of oil service companies barely reacted to news that

Banc of America Securities

cut earnings estimates:

Baker Hughes


climbed 1/2 to 28 15/16;



added 13/16 to 43 9/16;



added 7/8 to 61;

Smith International


climbed 1/4 to 44, and

Weatherford International


lost 1/16 to 34 3/16.

R&B Falcon


added 5/8 14 15/16 after its loss estimates were nudged modestly narrower.



slipped 5/8 to 14 3/4 after

Lehman Brothers

trimmed its 1999 earnings-per-share estimate to $1.24 from $1.27 and its 2000 estimate to $1.35 a share from $1.42. Lehman also dropped its price target on the stock to 22 from 25. Yesterday the company warned it would miss analyst estimates for 1999 earnings.



jumped 2 5/8, or 12.5%, to 23 5/8 after

Goldman Sachs

boosted the company to its recommended list from market outperform.

Harken Energy


lost 3 1/6, or 13%, to 1 1/4 after


sliced its rating to neutral from attractive.

Warburg Dillon Read

upped its average oil-price estimate to $17.60 per barrel for 1999 and to $18.50 from $17 per barrel for 2000.

Philip Morris inched up 5/8 to 35 1/8 after

Morgan Stanley Dean Witter

upped its rating to strong buy from outperform.




added 3/16 to 19 11/16 after saying this week's earthquake in Taiwan would not hurt its operations. The company said its manufacturing hubs were in the Philippines and South Korea.

Aside from the Lehman news noted above, DaimlerChrysler dropped 3 7/16 to 66 3/4 after saying its supervisory board would convene Friday to devise a restructuring plan that would include axing four of its 17 board members. According to media reports, the automaker would let go of North American President Thomas Stallkamp, while retaining CFO Manfred Gentz, a source confirmed in an interview with





slipped 13/16 to 35 9/16 after

The Wall Street Journal

reported that the carrier unveiled plans to broaden its intra-European services, adding more cargo flights and a new overnight delivery service. According to the


, FDX plans to centralize its operations in Paris.

Johnson & Johnson


lost 3/4 to 92 1/2 despite a report in

The Wall Street Journal

which said the company received kudos from 10,830 online survey participants as the American company with the best corporate reputation.