Friday, Oct. 8, 1999

Hi/fn gains -- yes, gains -- in an after-hours Island ECN session led by Global Crossing's 108,000+ shares. Jupiter and E-Stamp tick higher.
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After-Hours Markets

Battered

Hi/fn

(HIFN)

finally caught a bit of a break after hours, rising in the No. 3 volume position on

Island ECN

. Two of today's standout IPOs saw some upside action as well, but overall the late session was sleepy.

Island ECN offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EDT

.

--

John J. Edwards III

Day Session Report

The major stock proxies finished with solid gains. The

Dow Jones Industrial Average

advanced 109.86 to 10,647.86, while the

Nasdaq Composite Index

climbed 25.87 to 2886.57 -- less than a point away from a record high.

The big European indices ended the trading session in negative territory with France's

CAC

declining 20.33 to 4721.93 and Germany's

Dax

slipping 0.05 to 5419.26, while London's

FTSE

fell 1 to 6199.40.

In Asia's market news, Japan's

Nikkei

ended the trading session down 74.37 to 18062.18 and Hong Kong's

Hang Seng

also had a negative finish, down 0.78 to 13112.42.

Mergers, acquisitions and joint ventures

AT&T

(T) - Get Report

Chairman Mike Armstrong said that the company is coming close to receiving

Federal Communications Commission

approval for its $10 billion joint venture with

British Telecom

(BTY)

after it inked an agreement with the

FBI

and the

Justice Department

that enables law enforcement officials to wiretap international calls when necessary.

DuPont's

(DD) - Get Report

DuPont Pharmaceuticals

division said it bought the global marketing rights and patent for a chemical compound called

Definity

through its purchase of

ImaRx Pharmaceuticals's

outstanding shares. DuPont plans to sell Definity as the first ultrasound contrast agent for heart, liver and kidney imaging in the U.S.

Separately, DuPont announced plans to spend $51 million to boost its operations in Kinston, Ontario.

EMC

(EMC)

said its merger with

Data General

(DGN)

should close shortly since it received regulatory and shareholder approval.

KPN Telecom

announced its plans to team up with

Oracle

(ORCL) - Get Report

to sell business software packages on the Internet to small or mid-sized businesses in the Benelux.

Phelps Dodge

(PD) - Get Report

said it would not up its $1.13 billion cash and stock bid for

Asarco

(AR) - Get Report

, after

Grupo Mexico

raised its original offer to $1.17 billion in cash.

Separately, Asarco said it plans to meet with Grupo Mexico to talk about the new offer.

Polaroid

(PRD)

said it would sell its graphic business to

Andlinger & Co

and assume a third-quarter charge of $40 million. Polaroid said the division has been losing roughly $10 million a year for the last several years. After the deal's completion in the fourth quarter, the division will be known as

PGI Graphics Imaging LLC

.

Volvo

(VOLVY)

is buying a 5% stake in

Mitsubishi Motors

of Japan and forming a strategic truck and bus alliance.

Earnings/revenue reports and previews

(

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

.)

Analogic

(ALOG)

posted fourth-quarter earnings of 30 cents a share, greatly missing the single-analyst estimate of 45 cents and the year-ago 56 cents.

Clark/Bardes

(CLKB)

said it expects to post third-quarter earnings between 8 cents to 10 cents a share, missing the five-analyst estimate of 15 cents and the year-ago 11 cents.

Consolidated Papers

(CDP)

posted third-quarter earnings of 21 cents a share, well ahead of the 10-analyst estimate of 15 cents and above the year-ago 19 cents.

Ericsson's

(ERICY)

new handset models would lead to stronger fourth-quarter results compared with those in the second quarter and boost earnings in 2000, according to a

Reuters

report.

First Virginia Banks

(FVB)

posted third-quarter earnings of 69 cents a share, in line with the 11-analyst estimate of 69 cents and up from the year-ago 62 cents.

HA-LO Industries

(HMK)

said that it expects to post a third-quarter loss between 3 to 5 cents, greatly below the nine-analyst estimate of a 9-cent profit, and the year-ago 17-cent gain.

Hi/fn, whose stock got crushed yesterday, said it expects to report fourth-quarter earnings above the five-analyst estimate of 37 cents. Hi/fn said, after its shares were halted on the

Nasdaq Stock Market

, that after a 30% price decline, two major customers had sliced their specialty semiconductor orders for the fourth quarter.

SG Cowen

and

BancBoston Robertson Stephens

cut their ratings on the shares to neutral from buy and long-term attractive from buy respectively.

Idec Pharmaceuticals

(IDPH)

said it anticipates posting third-quarter earnings of 42 cents a share, beating the 11-analyst estimate of 41 cents a share and the year-ago 8 cents.

Landmark Systems

(LDMK)

said it expects to post third-quarter earnings between a 1-cent to 2-cent gain, greatly below the two-analyst estimate of 16 cents a share.

M&T Bank

(MTB) - Get Report

reported third-quarter earnings of $8.29 a share, beating the three-analyst estimate of $8.25 and the year-ago $6.81.

RPM

(RPM) - Get Report

posted first-quarter earnings of 31 cents a share, in line with the six-analyst estimate and up from the year-ago 29 cents.

SLI

(SLI)

warned it expects third-quarter earnings to come in between 20 cents to 25 cents a share, below the seven-analyst estimate of 35 cents. For the full year, before restructuring and other charges, the company expects to post earnings of between $1.36 and $1.46 a share, below the seven-analyst estimate of $1.72.

Retailers' September same-store sales were up, with discount chains in the lead, according to

The Wall Street Journal

. The newspaper reported that some analysts plan to up their earnings estimates for

Wal-Mart

(WMT) - Get Report

,

Dayton Hudson

(DH)

and

Costco

(COST) - Get Report

as a result of the strong sales.

Xerox

(XRX) - Get Report

warned that it expects to post essentially flat revenue for the third quarter and to see about a 10% to 12% slump in earnings compared with the year-ago 53 cents a share. The

First Call/Thomson Financial

13-analyst consensus estimate called for the company to earn 58 cents a share in the quarter. Xerox blamed weaker revenue in combination with an unfavorable product-mix and heightened competitive pressures.

Prudential Securities

lowered its rating on Xerox to accumulate from buy, while cutting its fiscal 1999 and 2000 earnings estimates to $2.42 from $2.57 a share and to $2.70 from $2.85 per share, respectively.

PaineWebber

also cut its rating on Xerox to neutral from buy, while Goldman Sachs removed the stock from its recommended list and rated it a market perform.

Separately,

Credit Suisse First Boston

upped its rating on the stock to a buy to a hold.

York Research

(YORK)

reported second-quarter earnings of 3 cents a share, beating the single-analyst estimate of 1 cent but down from the year-ago 14 cents.

Offerings and stock actions

J.P. Morgan

, Goldman Sachs and

Salomon Smith Barney

priced a 14 million-share offering for

AES

(AES) - Get Report

at $57.1875 a share. Shares of AES were down 15/16 to 56 1/4.

Aetna

(AET)

announced it plans to set a $1 billion share-repurchasing plan. Separately, another lawsuit against Aetna was filed yesterday in Mississippi federal court, claiming that the HMO denied participants care.

Donaldson Lufkin & Jenrette

,

Banc of America Securities

and

Deutsche Banc Alex. Brown

priced a 7 million-share IPO for

E-Stamp

(ESTM)

above range at 17. E-stamp shares leapt 5 3/8, or 31.6%, to 22 3/8.

Genentech

(DNA)

said

Roche Holdings

plans to sell 20 million shares of Genentech stock in an underwritten public offering, which will represent 15.6% of the outstanding common stock of Genentech. Genentech also said its board approved a 2-for-1 stock split. In the wake of the planned offering, Roche's economic and voting ownership of Genentech will be trimmed to about 65%. In conjunction with the stock offering, Roche also plans to issue U.S. dollar-denominated bonds exchangeable with Roche for up to about 5.5 million shares of Genentech stock owned by Roche.

Credit Suisse First Boston priced

Interwoven's

(IWOV)

3.2 million-share IPO above-range at $17 a share. Shares of Interwoven soared 23 7/8, 140.4%, to 41.

Donaldson Lufkin & Jenrette priced

Jupiter Communications'

(JPTR)

3.1 million-share IPO above-range at $21. Jupiter Communications jumped 14 1/2, or 69%, to 35 1/2.

K-Swiss

(KSWS)

set a $25 million share-repurchasing plan.

Bear Stearns

priced

TriZetto Group's

(TZIX)

4.2 million-share IPO at $9, the low end of the estimated $9-to-$10 range. Shares of Trizetto were unchanged at 9.

Analyst actions

PaineWebber initiated coverage of

Automatic Data Processing

(AUD)

and

Tanning Technology

(TANN)

with buy ratings.

Donaldson Lufkin & Jenrette raised its rating on

AMR

(AMR)

,

Northwest

(NWAC)

to outperform from marketperform.

Merrill Lynch

initiated coverage of

Applied Micro Circuits

(AMCC)

with near-term accumulate, long-term buy ratings.

Credit Suisse First Boston initiated coverage of

CD Radio

(CDRD)

as a buy.

Warburg Dillon Read

rolled out coverage of

Cytec Industries

(CYT)

with a buy rating.

Warburg Dillon Read initiated coverage of

DuPont

(DD) - Get Report

with a hold rating.

Warburg Dillon Read raised its rating on

Dow Chemical

(DOW) - Get Report

to buy from hold and set a price target of 130.

Warburg Dillon Read initiated coverage of

Engelhard

(EC) - Get Report

with a strong buy rating.

PaineWebber upped its rating on

Ferrellgas

(FGP) - Get Report

to buy from attractive.

BancBoston Robertson Stephens

upped its rating on

Harbinger

(HRBC)

to long-term attractive from market perform.

Merrill Lynch added

Infinity Broadcasting

(INF) - Get Report

to its

Focus One

list.

PaineWebber started

Keane

(KEA)

and

Perot Systems

(PER) - Get Report

with neutral ratings.

Morgan Stanley Dean Witter

raised its rating on

Kennametal

(KMT) - Get Report

to outperform from neutral.

Deutsche Banc Alex. Brown lowered its rating on

Marten Transport

(MRTN) - Get Report

to neutral from buy.

Morgan Stanley Dean Witter sliced its rating on

Merrill Lynch

(MER)

and

TD Waterhouse

(TWE)

to neutral from outperform. Morgan Stanley also downgraded

Schwab

(SCH)

to neutral from outperform.

Lehman Brothers

began coverage of

PMC-Sierra

(PMCS)

with a buy rating.

ING Barings

rolled out coverage of

Priceline.com

(PCLN)

with a strong buy rating.

Goldman Sachs upgraded shares of

Southern Peru Copper

(PCU)

to market outperform from market perform.

PaineWebber lowered its rating on

Southwest Airlines

(LUV) - Get Report

to attractive from buy.

DLJ began coverage of

Starwood Hotels

(HOT)

with a market perform rating and sliced its rating on

Marriott

(MAR) - Get Report

to market perform.

Merrill Lynch started coverage of

TranSwitch

(TXCC)

with a near-term and long-term accumulate.

Goldman Sachs

upped its rating of

Tredegar

(TG) - Get Report

to market outperform from market perform.

Goldman Sachs raised its rating on

Plains All American

(PAA) - Get Report

to its recommended list.

Salomon Smith Barney

sliced its rating on

Vitesse Semiconductor

(VTSS)

to outperform from buy, in the wake of hi/fn's announcement of fiscal 2000 first-quarter earnings woes. Hi/fn supplies components to Lucent, which gives Vitesse 20% of its business.

Miscellany

Ford

(F) - Get Report

and the

UAW

are still in talks to reach an accord before tonight's 11:59 p.m. strike deadline, the

Journal

reported. According to the newspaper, negotiations have been hindered by Ford's desire to spin off its

Visteon

parts division.

IBM

(IBM) - Get Report

announced plans to fold its consumer PC business into its broader PC operation, cutting its workforce by 500 to 1,000 jobs.

Mattel

(MAT) - Get Report

CEO Jill Barad told the company's board that she did not fully understand what was wrong at the company's

Learning Co.

division, but assured the board that she would produce a full accounting in the near future, the

Journal

reported.

Wendy's

(WEN) - Get Report

said it plans to shut down seven restaurants in the U.K. as a result of high real-estate and operating costs. The company said the closures would not have a negative impact on fourth-quarter earnings.

An advisory board said it will recommend that the

Food and Drug Administration

approve

Pfizer's

(PFE) - Get Report

antidepression remedy

Zoloft

to treat post-traumatic stress disorder.