Wednesday, April 14, 1999

Big selloff belies positive breadth; Brazil's largest natural gas distributor goes private.

Author:: Thomas Lepri
Publish date:: Apr 14, 1999 4:37 PM EDT

Markets

J.P. Morgan

was looking like a Net stock today -- except for the smashing earnings (see below). Morgan was up a whopping half a sawbuck at midafternoon before profit-taking sent it downward, along with most other

Dow Jones Industrial Average

components.

The Dow closed at yet another record high despite the selloff, up 16.65 to 10,411.66 as money flew out of the tech and Internet sectors and into cyclicals like

Alcoa

(AA) - Get Report

Caterpillar

(CAT) - Get Report

and

United Technologies

. The

Nasdaq Composite Index

dropped 76.02 to 2507.48; the

S&P 500

fell 21.36 to 1328.46; the small-cap

Russell 2000

gained a puny 0.15 to 417.39; and

TheStreet.com Internet Sector

plummeted 82.01 to 694.17 -- a level the DOT hasn't seen since ... well ... since last Thursday. The transport sector was sharply higher.

Both the NYSE and the Nasdaq saw positive breadth.

Major European indices finished modestly lower, while Asian markets were mixed overnight. Hong Kong's

Hang Seng

gained 65.56 to 11,834.13, and Japan's

Nikkei

rose 49.52 to 16,764.68.

For more markets action and news, click

here.

Companies

Boston-based REIT

Berkshire Realty

(BRI)

is being acquired for about $1.26 billion in cash and debt by a group led by Berkshire chairman

Douglass Krupp

and real estate funds run by

Blackstone Group

and

Goldman Sachs

Accounting colossus

Deloitte Touche Tohmatsu International

has named

James Copeland Jr.

its new CEO, replacing

Edward A. Kangas

, who will stay on as chairman.

Gray Communications Systems

(GCS)

set plans to buy three

CBS

television affiliates -- two in Texas and one in Oklahoma -- for about $139 million in cash and stock, giving the company 10 CBS stations in all.

Shares of J.P. Morgan surged after the company posted first-quarter earnings of $3.01 a share, well above the

First Call

consensus of $1.73 a share. J.P. Morgan closed up 3 9/16 to 132 7/8, having hit an intraday high of 140 1/16.

For more news on companies and stocks, click

here.

Tech

The latest Web broadcasting announcement:

CMGI

(CMGI)

today said it will commit at least $100 million to an Internet broadcasting initiative to be headed by former

NBC

president

Neil Braun

Intel

(INTC) - Get Report

last night reported first-quarter earnings of 57 cents a share, 2 cents better than the First Call consensus. But the company said that second-quarter revenue may be flat to slightly lower.

TheStreet.com

looked at Intel's quarter in a

story last night.

Lucent Technologies

(LU)

last night told investors that its second-quarter earnings would meet or exceed analysts' expectations of 15 cents a share.

TSC

columnist

James Cramer

has

mixed feelings about the announcement.

For more tech news and commentary, click

here.

General News

NATO

forces continue to bomb Serbian targets today. In Brussels, Germany proposed a peace initiative to NATO that would suspend the air strikes for 24 hours if Yugoslav President

Slobodan Milosevic

began the withdrawal of his forces from Kosovo. Meanwhile, Yugoslav media reported that NATO warplanes struck a convoy of ethnic Albanian refugees, killing at least 64 and wounding 20; NATO has yet to confirm the report.

A Malaysian High Court judge found former Deputy Prime Minister and political reformer

Anwar Ibrahim

guilty of abusing his office to cover up elicit sexual practices and sentenced him to a longer-than-expected six years in prison. Thousands of Anwar's supporters took to the streets in protest immediately after the verdict. Anwar still faces another corruption charge, as well as five counts of sodomy.

International

A consortium formed by

Royal Dutch/Shell

and

British Gas

won the bidding war for Brazil's largest natural gas distributor, the state-owned

Companhia de Gas de Sao Paulo

. The consortium will pay about $1 billion for the privatized company.

Endesa Spain

made a tender offer for

Empresa Nacional de Electricidad

, known as

Endesa Chile

, rivaling

Duke Energy's

(DUK) - Get Report

$2.1 billion bid for 51% of the company. Endesa Spain already holds about 25% of Endesa Chile through subsidiary

Enersis

and is offering about $19 per ADR for an additional 29.7% of the company -- a nearly $3.50 premium to Duke's offer.

Dutch retail group

Vendex

is not happy with the performance of its

FAO Schwarz

unit, and isn't ruling out its sale. In a masterful use of

litotes, Chairman Jan-Michiel Hessels described such a sale as "not impossible."

For more international news and commentary, click

here.

In the Papers

In today's

Boston Globe

TSC

contributor

Steven Syre

and

Charles Stein

take a look at the recent fortune of Boston-based

Atlantic Bank & Trust

(ATLB)

, a modest commercial bank whose stock has skyrocketed since it announced a pair of Internet deals last week.

The Jerusalum Post

reports that Israel's

Interuniversity Calculation Center

and

Gilat Communications'

(GICOF)

satellite subsidiary,

Israsat

, have signed an agreement to provide limited satellite access to Internet 2, the hyperquick network as much as 600 times quicker than the network you're using right now. Israel will be the first country to link to Internet 2 via satellite, as opposed to fiber optics, according to the paper.

Elsewhere

A judge yesterday rejected residents' bid to turn their small community of Brooksville, Ala., into a city governed only by the Ten Commandments and the teachings of Jesus, saying that the proposal does "not even begin to meet the minimum standards" for incorporation. Melvin Duran, mayor of the town of Priceville, within whose borders Brooksville presently falls, said that "

one of their big issues is that we won't let them shoot guns off their back porch." But a Brooksville resident also noted, "We don't want no beer store on that corner."

Fifty-four-year-old Chilean immigrant

Maria Grasso

today claimed the $197 million

Big Game

jackpot, the largest lottery prize ever collected by an individual in the U.S. Grasso thus realizes the American Dream of a huge pile of free money.

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