Holiday-Thinned Trading Leaves Stocks Bereft of Catalysts

With many market players observing Yom Kippur, volume is extremely low and stocks aren't moving much.
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Wall Street could use some collard greens and steak.

To say that trading is anemic today is almost an understatement. Even without many market players taking the day off in observance of Yom Kippur, things would likely be on the thin side. There has been little of the merger-and-acquisition news that usually comes on a Monday. With no major economic data out, investors remain in a sort of never-never land when it comes to interest rates -- fed funds futures show a market that is dead even on whether the

Federal Open Market Committee

will hike by its November meeting.

Moreover, the market's recent obsession with the dollar makes today a particularly dangerous time to take on new positions. The currency market is focused on tomorrow's policy meeting of the

Bank of Japan

. There has been a lot of speculation lately that Japanese policy makers have struck some sort of deal with the U.S., wherein the BOJ will increase money supply, and the

Treasury Department

will join Japan in intervening to beef up the dollar. Traders know that when they come in tomorrow, the dollar will either be significantly higher against the yen or lower, and that stocks will follow suit. Yet another reason to stay away.

"This is one day where there's not much to do," said Doug Myers, vice president of equity trading at

Wachovia Securities

in Atlanta. "It's slow, light volume -- not much going on." Wall Street looked on track for one of the lowest-volume days of the year.

So tentative is the action that thus far the market hasn't even shown the kind of volatility usually associated with thin volume. Major indices have spent time spent time on either side of the flat line -- but not by much.

Lately, the

Dow Jones Industrial Average

was down 4 to 10,799, while the broader

S&P 500

was off 3 to 1333.

The tech-muffled

Nasdaq Composite Index

was up 5 to 2875.

TheStreet.com Internet Sector

index was up less than a point to 621.

The small-cap

Russell 2000

was down 1 1/2 to 433.

Breadth was negative. On the

New York Stock Exchange

, decliners led advancers 1,637 to 1,074 on 316 million shares. There were 35 new 52-week highs and 118 new lows. In

Nasdaq Stock Market

action, decliners were beating advancing issues 1,935 to 1,539 on 438 million shares. There were 91 new highs and 46 new lows.

That poor breadth has been something of a trend lately, and it worries technical analysts greatly.

"The advance/decline line continues to slowly erode, and that means the market will eventually break its back," said Robert Dickey, managing director of technical analysis at

Dain Rauscher Wessels

in Minneapolis. "I think it will happen over the next few weeks. We'll see the big stocks catch up with the rest of the market, which is already a correction in progress."

Dickey suspects that any move down will be the same sort of quick and dirty drop that has characterized the market for much of the decade. "Hard and fast and over soon," he said. "I think it's going to be a short enough correction that by year-end the market will already be recovering."

Monday's Midday Watchlist

By Eileen Kinsella
Staff Reporter

Insurance underwriter

Jefferson-Pilot

(JP) - Get Report

fell 1 7/16 to 66 1/16 after the company inked an agreement to buy

Guarantee Life

(GUAR)

for about $296 million, in an effort to strengthen its group life and disability insurance operations. Guarantee rose 1 3/8 to 30 3/8. Jefferson-Pilot will pay $32 a share for Guarantee, in the half-stock, half-cash deal, which also includes the assumption of about $115 million in debt.

Microsoft

(MSFT) - Get Report

inched up 1/2 to 96 15/16 and

Ford

(F) - Get Report

slipped 1/16 to 49 7/8 after

The Wall Street Journal

reported the two companies are expected to forge a joint business that would allow Ford to make cars in answer to online orders.

Separately, Microsoft,

Excite@Home

(ATHM) - Get Report

and

Ticketmaster Online-CitySearch

(TMCS)

announced their newly formed online auction network,

FairMarket

, which will compete with the No. 1 online auction site,

eBay

(EBAY) - Get Report

. Investors didn't exactly seem thrilled, with Excite down 3/4 to 37 5/8, while Ticketmaster Online added 7/16 to 26 1/4. eBay however, was getting some unwanted attention, down 7 1/8, or 5%, to 133 7/8.

FairMarket said the network could connect with more than 46 million visitors, or 73.3% of all Internet users. Among other participants in the new venture,

Lycos

(LCOS)

lost 3/4 to 43 11/16,

Xoom.com

(XMCM)

edged up 7/8 to 38 13/16,

ZDNet

(ZDZ)

zoomed 2 1/4, or 12.4%, to 20 3/8 and

Dell

(DELL) - Get Report

doled out 1/2, to 48 3/8.

Mergers, acquisitions and joint ventures

Ogden

(OG)

fell 3/4, or 5.9%, to 12 after the company announced plans to sell its entertainment and aviation divisions as an alternative to a spinoff, the

The Wall Street Journal

reported.

PSINet

(PSIX)

added 7/16 to 41 1/8 after it announced its acquisition of four Internet service providers: Brazil's

ServNet Servicos de Informatica e Communicacao

, Hong Kong-based

Vision Network

and Spain's

Infase Comubicaciones

and

Ciberia Internet

.

German drug maker

Schering

said it would buy New Hampshire-based

Diatide

(DITI)

, for $9.50 a share, or about $100 million. Schering said its goal is to become active in the radiopharmaceutical business, which involves the use of radioactive chemicals to test the location, size or function of tissues, organs and blood vessels. Diatide lifted 1 1/2, or 19.7%, to 9 9/64.

Sonera

authorized

VoiceStream's

(VSTR)

proposed merger with

Aerial

(AERL)

, in which Sonera has a major interest. VoiceStream added 3, or 5.4%, to 59, while Aerial flew 5 5/16, or 26.7%, to 25 1/4. Meanwhile, Aerial's majority shareholder,

Telephone & Data Systems

(TDS) - Get Report

gained 3 1/4 to 78 3/4, after saying it canceled plans to spin off the digital cellular phone company in light of the VoiceStream merger. TDS said it would tender its 59.1 million-share stake to VoiceStream.

Earnings/revenue reports and previews

A.G. Edwards

(AGE) - Get Report

inched up 1/16 to 24 13/16 after the company posted better-than-expected second-quarter results of 86 cents a share, compared with the two-analyst estimate of 81 cents, and up from a year-ago 74 cents.

Consol Energy

(CNX) - Get Report

slipped 5/16 to 13 3/16 after the company lowered earnings expectations for the quarter and the year, citing lower prices for bituminous coal. Consol said it expects results for the current quarter to between 12 cents and 18 cents a share, while the single analyst estimate calls for earnings of 51 cents a share.

Dole Food

(DOL) - Get Report

fell 1 3/8, or 5.7%, to 22 5/8 after it warned investors it would post third-quarter break-even results or a possible loss, missing the four-analyst estimate of 13 cents a share.

Offerings and stock actions

Best Buy

(BBY) - Get Report

tacked on 2 1/4 to 48 1/2 after it set a stock buyback plan worth $200 million. The retailer said it finished a $100 million repurchasing plan last October and now has roughly 205 million outstanding shares.

Cost Plus

(CPWM)

lost 1/16 to 47 1/4 after it set a 3-for-2 stock split.

Analyst actions

ASM Lithography

(ASML) - Get Report

added 5/16 to 65 1/4 after

Credit Suisse First Boston

raised its fiscal 1999 and 2000 earnings estimates to 62 cents and $2.25 a share, respectively.

Complete Business Solutions

(CBSI)

fell 1 1/16, or 7%, to 14 1/16 after

Donaldson Lufkin & Jenrette

sliced its rating to buy from top pick.

Duke Energy

(DUK) - Get Report

rose 5/8 to 56 1/2 after First Boston upgraded the stock to buy from hold, and raised 2000 earnings estimates to $3.95 a share, from $3.85 and 2001 earnings-per-share estimates to $4.29 from $4.12.

General Electric

(GE) - Get Report

moved up 7/8 to 120 7/8 after

Merrill Lynch

added the stock to its Focus One list, and said it could hit 150 by next year.

MedQuist

(MEDQ)

fell 2 5/16, or 6.5%, to 33 1/4 despite some help from First Boston, which upped its rating to strong buy from buy.

Paychex

(PAYX) - Get Report

added 1/8 to 33 after

Warburg Dillon Read

upgraded the stock to buy from hold.

priceline.com

(PCLN)

powered up 5 3/8, or 9.2%, to 63 15/16 after Warburg Dillon Read upped its rating on the stock to strong buy from buy.

UnitedHealth

(UNH) - Get Report

fell 2 11/16 to 58 1/4, despite First Boston's optimism about its net pricing yields and an increased 2000 earnings estimates to $3.55 a share from $3.00.

VeriSign

(VRSN) - Get Report

climbed 5 7/8 , or 5.3%, to 116 5/16 after Credit Suisse First Boston started coverage with a buy rating.

Miscellany

American Home Products

(AHP)

added 1/8 to 46 1/8 after a story in

The New York Times

said Wall Street analysts fear the planned fen-phen settlement may go too far to accommodate plaintiffs, leaving the drugmaker open to lengthy legal proceedings. According to the

Times

, the company and plaintiffs agreed to an initial draft of a memorandum of understanding, which has American Home Products handing over $4 billion to former fen-phen users. Despite the doubts,

Salomon Smith Barney

analyst Christina Heuer raised her rating on the stock to outperform from neutral, citing strategic events including the settlement and potential merger and acquisition activity.

Asarco

(AR) - Get Report

slipped 3/16 to 21 1/8 after it filed a complaint in federal court in Manhattan alleging that

Phelps Dodge's

(PD) - Get Report

unsolicited bid for it and

Cyprus Amax

(CYM)

is a violation of U.S. antitrust laws. Cyprus also slipped 1/8 to 17 7/16, while Phelps Dodge fell 5/16 to 57 11/16. Asarco is seeking damages for what it says is Phelps' wrongful interference with Asarco's proposed merger with Cyprus.

DaimlerChrysler

(DCX)

added 1/8 to 71 3/8 after

The Wall Street Journal

reported the head of the commercial-vehicle division, Kurt Lauk, resigned from the company's management board. The story also said Thomas Stallkamp's role as Chrysler's president is in jeopardy.

Wal-Mart

(WMT) - Get Report

was unchanged at 46 5/8 after the

Journal

said it unveiled plans to launch 10 trial

Computer Doctor

centers in its stores to service computers and install software.