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Tuesday, February 9, 1999

Stocks collapse; Lycos leads Internet stocks down the slippery slope.


U.S. stocks collapsed in the last hour of trading after spending much of the afternoon struggling back from early losses. The damage was marketwide, but lofty technology and Internet issues took the worst hits.

Cued by


, which

plummeted 33 to 94 1/4 on news of its acquisition by

USA Networks

(USAI) - Get Free Report

, Internet Sector

index exhaled nearly 10% of its value, dumping 48.59 to 456.26, while the tech-teeming

Nasdaq Composite Index

fell 94.06 to 2310.86. The

Dow Jones Industrial Average

dropped 158.08 to 9133.03, and the

S&P 500

dumped 27.63 to 1216.14. The normally placid

Russell 2000

coughed up a relatively large 8.20 to 403.13.

National Association of Securities Dealers


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


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




(AMR) - Get Free Report

American Airlines

said it will sue its pilots union if it doesn't call off its "sickout" by President's Day weekend. Meanwhile, crew shortages forced the airline to cancel 32% of its Tuesday flights.

Sears, Roebuck

(S) - Get Free Report

said it will plead guilty to criminal fraud and pay a fine of $60 million for illegally pursuing credit card debtors in Chapter 7 bankruptcy protection.

Service Merchandise


will close as many as 134 of its 347 stores and use the proceeds from inventory sales to pay off bank debt. In December the company missed a $13.5 million interest payment on its corporate bonds.

SmithKline Beecham's

(SBH) - Get Free Report

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

Diversified Pharmaceutical Services


Express Scripts


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

Quest Diagnostics

(DGX) - Get Free Report

for $1.27 billion.

Move over, Addison and Steele.


(SBUX) - Get Free Report


Time Warner



Time Inc.

will jointly publish a magazine called




will be sold at the modern-day


-- Starbucks' North American coffeehouses.

For more news on companies and stocks, click



(AMZN) - Get Free Report

today placated outraged users by saying that it will make clear when books have been featured because of payments by publishers.

You knew Lycos wouldn't be lonely for long.

USA Networks

(USAI) - Get Free 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



weighed in on the deal today.

MCI WorldCom


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

Defense Department


For more tech news and commentary, click



Swiss banking behemoth


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


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


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.


Another reason to save social security: Bands of monkeys have taken to raiding small villages in northeast Thailand for food. The local government recently stopped subsidizing the feeding of the simian bandits, who are unable to survive on the paltry bounty of their natural forest habitat.

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


dumb question? Even better. Send it to, and



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.