Tuesday, February 9, 1999

Selloff continues in U.S. markets; Lycos falls as market reacts to its USA Networks deal; UBS can't find a buyer.
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Markets

U.S. stocks had gone from bad to worse at midday. Blue-chips traded lower, while Internet issues

dropped sharply along with shares of

Lycos

(LCOS)

, lately down 27 to 100 1/4 (see below). The Net selloff gave the tech-heaped

Nasdaq Composite Index

yet another reason to spiral.

National Association of Securities Dealers

Chairman

Frank Zarb

sent a letter to NASD members emphasizing the need to make day traders "understand what they are getting into."

European bourses closed lower, while Asian markets closed mixed, as Japan's

Nikkei

shed 89.83 to 13,902.66, while Hong Kong's

Hang Seng

gained 104.89 to 9,244.49.

For more markets action and news, click

here.

Companies

AMR's American Airlines

(AMR)

said it will sue its pilots union if it doesn't call off its "sickout" by

President's Day

weekend.

SmithKline Beecham's

(SBH) - Get Report

slimming down. The pharma giant announced the sale of pharmacy benefits unit

Diversified Pharmaceutical Services

to

Express Scripts

(ESRX)

for $700 million in cash, and the sale of its clinical labs unit to

Quest Diagnostics

(DGX) - Get Report

for $1.27 billion.

Move over, Addison and Steele.

Starbucks

(SBUX) - Get Report

and

Time Warner

(TWX)

unit

Time Inc.

will jointly publish a magazine called

Joe

.

Joe

will be sold at the modern-day

salon

-- Starbucks' North American coffeehouses.

For more news on companies and stocks, click

here.

Tech

You knew Lycos wouldn't be lonely for long.

USA Networks

(USAI) - Get Report

announced that it will buy the Web portal, combine it with its

Home Shopping Network

and name the new company

USA/Lycos Interactive Networks

.

MCI WorldCom

(WCOM)

said it has signed a 10-year, $1.5 billion telecommunications service deal with the

Defense Department

.

For more tech news and commentary, click

here.

International

Swiss banking behemoth

UBS

says it can't find a buyer for 25 retail branches that Switzerland's competition commission required it to sell as part of last year's merger of

Union Bank of Switzerland

and

Swiss Bank

. Swiss regulators say they are looking into the matter.

Raising funds under the rising sun:

J.P. Morgan

said that in 1999, Japan will account for more than 90% of net government bond issuance among the world's top 18 economies.

For more international news and commentary, click

here.

General News

Labor Department

figures show that U.S. workers' productivity increased a healthy 2.21% in 1998.

Fighting continues between Ethiopia and Eritrea over the unmarked border between those countries.

Weeks after Iran's intelligence ministry admitted its agents were involved in the killing of two dissidents, that nation's Minister of Intelligence

Qorbanali Dorri-Najafabadi

has resigned.

Elsewhere

Atlanta Falcons receiver

Tony Martin

appeared in a Miami court to face money-laundering and conspiracy charges associated with his relationship to "the mayor of Opa-Locka," drug dealer

Ricky Brownlee

.

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

really

dumb question? Even better. Send it to

MonEmailbag@thestreet.com, and

TSC

columnist

Herb Greenberg

and I will do our best to answer. 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.