Tuesday, August 10, 1999

Major proxies finish lower, but the DOT index ends higher after late rally. Cisco beats earnings estimates by a penny. Goldman raises Red Hat's pricing range.
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Markets

All this over a 25 basis-point hike. Right.

It may be that the market's starting to give credence to the unlikely theory that the Fed will raise rates by 50 points when it meets on Aug. 24. It may also be that people are looking ahead and pricing in more than one hike. All that's certain is that there's not a lot of confidence in stocks right now.

The market continued its seasonal swoon today. Despite a late rally, all the major proxies finished decidedly lower amid sharply negative breadth. The

Dow Jones Industrial Average

lost 52.55 to 10,655.15; the

Nasdaq Composite Index

fell 28.94 to 2490.04; the

S&P 500

shed 16.37 to 1281.43; and the small-cap

Russell 2000

shaved off 3.07 to 422.82. An afternoon Net rally helped

TheStreet.com Internet Sector

index bounce back to 488.40, up 8.37.

The 30-year Treasury bond slumped 4/32 to 86 20/32, its yield rising to 6.248%.

The big European indices closed solidly lower, led by London's

FTSE

, which lost 2.4%.

Asian markets went both ways overnight, as Hong Kong's

Hang Seng

dropped 348.76, or 2.7%, to 12,596.71 while Tokyo's

Nikkei

added 11.64 to close at 17,202.09.

More markets news and commentary are available in

TSC's

Markets section.

Companies

General Motors

(GM) - Get Report

set plans to form a separate business unit to focus on Internet commerce.

Lucent

(LU)

is buying

International Network Services

(INSS)

for $3.7 billion in stock. Under terms of the deal, each share of INS will be converted into 0.8473 shares of Lucent. That's about $54 a share for INS shareholders.

Soros Fund Management

has hired former

Bankers Trust

treasurer Duncan Hennes as its first-ever chief executive. The move will let chief investment strategist Stanley Druckenmiller concentrate on running the firm's flagship

Quantum Fund

, the company said.

The price war is on. One day after

MCI WorldCom

(WCOM)

cut some of its phone rates to as low as 5 cents a minute,

Qwest Communications

(QWST)

has started offering free Internet access to customers buying a 250-minute package of domestic long-distance calling service for a flat rate of $24.95 a month.

Wal-Mart

(WMT) - Get Report

posted second-quarter operating earnings of 31 cents a share, which excludes a litigation settlement charge of 3 cents, ahead of the 17-analyst

First Call

estimate of 28 cents and up from the year-ago 23 cents.

More news on companies and stocks are available in

TSC's

Stock News section.

Tech

Cisco Systems

(CSCO) - Get Report

posted fourth-quarter earnings of 21 cents a share, surpassing the 30-analyst estimate of 20 cents a share and up from the year-ago 16 cents.

Undaunted by the recent break-down in Net stocks,

Goldman Sachs

raised the pricing range for

Linux

distributor

Red Hat Software's

initial public offering to $12 to $14 a share from $10 to $12 a share.

Razorfish

(RAZF)

is acquiring

i-Cube

(ICUB)

for about $677 million in stock.

Setting its second restructuring plan in less than a year,

Silicon Graphics

(SGI)

said it plans to spin off its media operations, cut up to 1,500 jobs and form a marketing alliance with

NEC

(NIPNY)

.

More tech news and commentary are available in

TSC's

Tech Stocks section.

General News

Indian war planes shot down a Pakistani navy surveillance plane today, killing 16 people. Pakistan is claiming that the attack took place within Pakistani air space. India says it shot down the aircraft over Indian territory, though the plane's wreckage was found in Pakistan.

International

Aluminum companies

Alcan

(AL) - Get Report

of Canada,

Pechiney

(PY) - Get Report

of France and

Alusuisse Lonza

of Switzerland confirmed a report in

The Wall Street Journal

that they are in merger talks.

Helped along by higher crude oil prices,

BP Amoco

(BPA)

posted a 14% jump in second-quarter earnings before extraordinary items, surpassing analysts' expectations. Excluding inventory losses and gains, the company said it earned 13 cents a share, up a penny from last year.

TotalFina's

(TOT) - Get Report

board rejected

Elf Aquitaine's

(ELF) - Get Report

counter bid for the second time at a meeting on Monday.

More international news and commentary are available in

TSC's

International section.

Elsewhere

Derrick Coleman

hasn't lost his edge yet. Possibly boning up on some new post moves, the once-dominant

NBA

power forward unzipped his pants and urinated in the dining room of Detroit's Intermezzo Italian Ristorante Saturday in front of dozens of restaurant patrons. Coleman could face charges of indecent and obscene conduct.