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The merger talks between

United Technologies





are officially "terminated" after Honeywell said it was considering an alternative merger proposal received this morning, according to United Technologies.


David Faber, who broke the story yesterday, said possible suitors would be

General Electric









United Technologies was to have offered $40 billion, or a 40% premium over Honeywell's closing price yesterday. The news had shares of United Technologies down 10.3% before trading was halted in that stock and Honeywell around 2:40 p.m. EDT. Honeywell was up 14.6% when it was halted.

wrote about the discussions in a

story last night.


Traders and investors are ready for the weekend. To start it off right, they've sent the

Nasdaq Composite Index and the

Dow Jones Industrial Average rallying.

The Comp and the Dow lately were adding onto yesterday's gains and trying to erase the damage done earlier in the week.

The Dow turned around at midday after spending most of the morning in the negative, weighed down by

United Technologies


on news of the possibility of a blue-chip marriage between it and



. United Technologies was off 10.9% since offering to pay $40 billion for Honeywell, a 40% premium on the closing price of the latter's shares yesterday. Lately, United Technologies was weighing the index down by 43 points, while Honeywell was countering that with about 31 points of upside.

wrote about the discussions last night in a

separate story.



was subtracting about 17 points from the blue-chip index. It was getting the cold shoulder from investors after the company announced this morning that a weak euro could put pressure on its earnings going forward. The soft-drink top dog

narrowly beat earnings forecasts this morning. Coca-Cola was off 5%.




, up 5.3%, was still benefiting from its shining post-close earnings report Wednesday. It was adding 22 points to the index.

And one of Microsoft's partners,

Commerce One


was also basking in the warm glow of investor optimism. It was lately 10.4% higher. After Thursday's close, Commerce One posted a loss that was

narrower than expected.

Unfortunately, the Nasdaq's most active was mobile-phone giant



, down 14.8% after it cut its

sales and profitability forecasts , citing mobile-phone losses. The stock was downgraded by

Lehman Brothers

this morning.

Ericsson's announcement had early on put a damper on telecoms, but






were lately higher, getting some extended lift from separate positive earnings announcements. Also, Nokia said handset demand remains strong, despite fears of a slowdown in that business.

earlier wrote separate stories on

Broadcom and





which announced last night it handily

beat estimates lately was 16.3% higher. The news sent

JDS Uniphase


, which is planning to buy SDL, up 12.5%.

Internet stocks were getting a boost on the heels of blowout earnings from



last night.

Goldman Sachs

raised its EPS estimates for this year and the next on eBay, and


raised its EPS estimates for this year and next on SDL.

wrote a separate story on

eBay's earnings.

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Sector Watch

Financials were mixed. The

American Stock Exchange Broker/Dealer Index

was up an impressive 4.5% and the

S&P Insurance Index

0.4%% higher. But the

Philadelphia Stock Exchange/KBW Bank Index

was down 0.2%.

Bear Stearns


was up 11.7% on takeover rumors, while

Morgan Stanley Dean Witter


, benefiting from an upgrade, gained 6.1%.

Oil sectors were back in the game after November crude oil futures increased to $33.20 from $32.91, with the

American Stock Exchange Natural Gas Index

up 2%, and the

Philadelphia Stock Exchange Oil Service Index

up 3.3%.


Philadelphia Stock Exchange Forest & Paper Products Index

, down 1.3%, and

S&P Retail Index

, off 1.9%, were suffering, after rallying earlier this week when nothing else was.

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The bond market continues to improve overall. The benchmark 10-year

Treasury note was 2/32 higher at 100 24/32, yielding 5.648%.

The 30-year

Treasury bond was at 107 9/32, 9/32 higher, to yield 5.735%.

With no economic releases due today, there will probably be little new to cause any change in the market's view. Mixed performance in equities and ongoing Mideast tensions are likely to dominate the market's interest.

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