Thursday, July 29, 1999

Stocks submerge in response to Employment Cost Index; NASD board set to explore raising cash; gunfire breaks out at Atlanta daytrading firm.
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Markets

Stocks were spanked across the board as a hotter-than-expected

Employment Cost Index

sent investors scurrying back to their

Fed

watch posts. All the indices finished deep in the red on moderate volume.

The

Dow Jones Industrial Average

dumped 181.10 to 10,790.97; the

S&P 500

shed 24.37 to 1341.03; and the

Nasdaq Composite Index

sank 65.83 to 2640.01. Internet stocks and small-caps also took their lumps, with TheStreet.com Internet Sector index falling 21.88 to 562.44, and the

Russell 2000

giving back 5.03 to close at 441.58.

The

National Association of Securities Dealers

said its board OK'd a plan to explore various ways of raising money, including spinning off the

Nasdaq Stock Market

in an initial public offering. The news comes a week after

New York Stock Exchange

Chairman

Richard Grasso

said that he expects the NYSE to go public by Thanksgiving.

The big European indices got hammered today, paced by the

Xetra Dax

in Frankfurt, which fell about 3.4%. The London

FTSE

and France's

CAC

were each off more than 2.5%.

Asian markets were mixed overnight, as Hong Kong's

Hang Seng

slipped 22.58 to 13,117.84, while Tokyo's

Nikkei

climbed 290.01, or 1.65%, to 17,869.92.

More markets news and commentary are available in

TSC's

Markets section.

Companies

Aetna

(AET)

posted second-quarter operating earnings of $1.10 a share, ahead of the 15-analyst

First Call

estimate of $1.09, and up from the year-ago 95 cents.

Dow Jones Industrial Average

component

AT&T

(T) - Get Report

reported second-quarter profits from continuing operations of 49 cents a share, a penny ahead of the 21-analyst estimate but down from the year-ago 54 cents.

Nasdaq heavy-hitter

MCI WorldCom

(WCOM)

posted second-quarter earnings of 44 cents a share, matching the 27-analyst view and up from the year-ago 16 cents.

3M

(MMM) - Get Report

reported second-quarter operating earnings of $1.03 a share, ahead of the nine-analyst estimate of $1.

Waste Management

(WMI)

revised its second-quarter earnings target -- again -- to 58 to 60 cents a share from an already revised 67 to 70 cents a share. The company, which said it would conduct a review of its operations, also set plans to end its benefit pension plan, incurring $215 million in expenses. In addition, Waste Management said that CFO Earl DeFrates has resigned his position, though he will remain with the company.

More news on companies and stocks is available in

TSC's

Stock News section.

Tech

Apple

(AAPL) - Get Report

signed a deal with

America Online

(AOL)

to create software products to link Mac users to AOL Instant Messenger service users.

Compaq

(CPQ)

yesterday reported a second-quarter loss of 10 cents a share, a penny narrower than the 30-analyst view. Compaq earned 2 cents a share in the year-ago period. The company also set a restructuring plan calling for the elimination of as many as 8,000 jobs.

Two new issues swam upstream today against the broader market's decline. Canadian printing technology firm

Creo Products

(CREOV:Nasdaq) gained 5 1/16, or 33.8%, to 20 1/16 after being priced top-range at $15 a share yesterday by lead underwriter

Salomon Smith Barney

. And Web telephone company

Net2Phone

(NTOP:Nasdaq) surged 11 9/16, or 77.1%, to 26 9/16,

Hambrecht & Quist

having yesterday priced the stock above-range at $15 a share.

PaineWebber

raised its price target on

Micron Technology

(MU) - Get Report

to 72 after the company yesterday said it expects long-declining prices for computer memory chips to rise slightly starting next month, as a result of increased demand and low inventory levels. Micron was up 1 1/4 to 63.

More tech news and commentary are available in

TSC's

Tech Stocks section.

General News

A gunman opened fire today in the offices of Atlanta day trading firm

All Tech Investment Group

, wounding several people, according to wire reports and

CNBC

.

The

Labor Department

released its Employment Cost Index, which increased 1.1%. The figure is significantly higher than the expected jump of 0.8% and the previous quarter's 0.4% clip, and the largest gain since the 1.2% pop in the June 1991 ECI. The inflationary implications of the high ECI are compounded by evidence of the job market's continued tightening; Labor today also released figures showing initial jobless claims at 275,000 for the week ended July 24, lower than the 303,000 expected by economists and the previous week's 313,000.

The

Commerce Department

said that the nation's

gross domestic product

grew at a slower-than-expected 2.3% rate in the second quarter, vs. the previous quarter's 4.3% breakneck pace. Economists had expected second-quarter GDP to increase about 3.3%.

International

AMR

(AMR)

unit

American Airlines

and

British Airways

(BAB) - Get Report

have ended their three-year effort to form a global alliance, the

Financial Times

reported. The deal's final hitch was the airlines' failure to get immunity from antitrust proceedings from the

Transportation Department

, the paper wrote.

Deutsche Telekom

(DT) - Get Report

is looking into the possibility of buying

Sprint

(FON)

, according to

The Wall Street Journal

, which cited people close to the situation. Specifically, the paper wrote that Deutsche Telekom is in talks to buy

France Telecom's

(FTE)

10% stake in Sprint -- which France Telecom holds as part of its

Global One

joint venture with Sprint and Deutsche Telekom -- as a first step in an eventual outright purchase of Sprint.

More international news and commentary are available in

TSC's

International section.

Elsewhere

Police arrested a 28-year-old San Jose man this week on charges of scamming up to 100 people with a bogus Internet auction of Beanie Babies, today's

San Jose Mercury News

reported. Worst of all, apparently not content with the satisfaction of ripping off a bunch of morons, the alleged perp sent the following gloating email to one of his victims: "Ha, ha, ha, ha, ha. Never see the person, never meet the person, never speak with the person and then get upset when you get ripped off. ... You must be a bunch of morons."

Buffalo Sabres

netminder extraordinaire

Dominik Hasek

today announced his intention to retire after the upcoming season, citing his fears that his children are losing their Czech heritage. Repatriation from Buffalo to the Czech Republic presumably would have the immediate effect of replacing the Hasek family's steady diet of hot wings and beer with a menu of kielbasa and beer.