Skip to main content

Friday, May 7, 1999

Techs lead the indices higher, while Treasuries skid; Viacom files for a Blockbuster spinoff.


It took investors a few hours to figure out what to do with the

Labor Department's

nonthreatening April

employment report (see below). Many didn't do anything at all; volume was light on both the

New York Stock Exchange

and the

Nasdaq Stock Market

. But the rest finally did the only sensible thing to do: run up the recently deflated technology sector. The

Nasdaq Composite Index

led the major indices, gaining 31.33 to 2,503.61.

The other major proxies fared well, too. The

Dow Jones Industrial Average

rose 84.77 to 11,031.59; the

S&P 500

added 12.95 to 1345.00; the small-cap

Russell 2000

grew 2.73 to 436.11; and Internet Sector

index picked up 2.35 to 614.15. A skittish bond market sent the 30-year Treasuries solidly lower despite the employment report's glad tidings.

Major European indices finished mixed, with Germany's


up 0.4% but France's

CAC 40

and London's

FTSE 100

off 1% and 0.8%, respectively. In Asia, Hong Kong's

Hang Seng

sank 572.81, or 4.2%, to 12,997.43, while Tokyo's


gave back 354.09, or 2%, to 16,946.52

Britain said it will sell more than half of its gold reserves and invest the proceeds in foreign bonds, sending gold prices tumbling more than 2% in London. Meanwhile, the

Bank of England

said its governor, "Steady"

Eddie George

, will not seek a third term when his current stretch ends in June 2003.

For more markets action and news, click




(AA) - Get Free Report

has elected

Alain J.P. Belda

CEO, replacing

Paul H. O'Neill

. O'Neill will stay on as chairman until December 2000, when Belda will assume that post also.


Justice Department

approved the merger of

Bell Atlantic




(GTE) - Get Free Report

after the companies agreed to sell some cellular interests in nine states. The deal still has to pass the scrutiny of the

Federal Communications Commission

and several public utility commissions.

FCC Chairman

William Kennard

said the


(T) - Get Free Report

acquisition of



will require "very careful scrutiny" by the FCC.

Defense and electronics giant

Litton Industries

(LIT) - Get Free Report

yesterday made separate offers to buy shipbuilding firms

Avondale Industries

(AVDL) - Get Free Report


Newport News Shipbuilding


. The deals are valued at a total of about $2.4 billion in stock and cash.

The boards of farming cooperatives

Farmland Industries


Cenex Harvest States Cooperatives

approved preliminary resolutions to combine their operations. No cash would be exchange in the deal, which is subject to both membership and regulatory approval.


(VIA) - Get Free Report

yesterday filed with the

Securities and Exchange Commission

for an IPO of its

Blockbuster Entertainment

subsidiary. The filing did not specify the percentage of Blockbuster to be spun off, but said the offering could raise as much as $100 million.

For more news on companies and stocks, click



Graphics software firm


, headed by former




Jean-Louis Gassee

, yesterday filed with the SEC for an IPO worth $57.5 million.

For more tech news and commentary, click


General News

The Labor Department released figures showing nonfarm payrolls increased 234,000 in April, close to the expected 230,000; the unemployment rate jumped to 4.3%, 0.1 percentage point above last month's rate and economists' expectations; and average hourly earnings rose just 0.2%, just half the forecast.

Yugoslav President

Slobodan Milosevic

is ready to discuss a Kosovo peace agreement, he said in a statement distributed by state media. Yesterday Russia and Western powers hammered out a rough sketch of a peace settlement. At stake in any negotiation will be


insistence on an armed peacekeeping force in Kosovo, which Milosevic has repeatedly said he will not accept.


Germany's seasonally adjusted unemployment rate unexpectedly rose 0.1 percentage point to 10.6% in April, according to figures released today by the



Honda Motor

(HMC) - Get Free Report

set plans to invest about $300 million in its two largest Japanese factories as part of its drive to increase productivity; yesterday Honda said it will inject about $460 million into its North American operations.

For more international news and commentary, click



A jury found

The Jenny Jones Show

negligent in the murder of Scott Amedure, who was murdered by fellow guest Jonathan Schmitz after the victim admitting having a crush on him on the show. The show's producer,

Time Warner



Warner Bros.

, will appeal the decision, which ordered it to pay more than $25 million in damages to Amedure's family.

New York Jets

owner and former oil tycoon

Leon Hess

died today from complications from a blood disease. He was 85.

Trying to set the world record for Step Nine amends,

Bryan J. Neal

yesterday pleaded guilty to a felony charge stemming from the drunken rage he went into while on board an

Airtours International Airways

flight from Orlando, Fla., to Manchester, England. According to an


affidavit, after breaking an interior window on the plane, Neal threatened a group of terrified passengers by telling them he would break the exterior window so they would "get sucked out and die."

Have a dumb question relating to finance? Great. Have a


dumb question? Even better. Send it to, and I'll do my best to answer every Saturday. Include your full name, and please, no questions seeking personal financial advice or regarding personal brokerage disputes. And this reminder: Because of the volume of mail, personal replies can't be guaranteed.


here to read the most recent MonEmailbag.