<FONT COLOR=BLUE>MARKET SNAPSHOT--Earnings, merger boost the Dow
3M sees good growth, GE buying Honeywell
By Rex Nutting, CBS.MarketWatch.com
Last Update: 2:22 PM ET Oct 23, 2000
NEW YORK (CBS.MW) - Strong earnings from a couple of blue chips and a big merger boosted the Dow Jones Industrial Average on Monday. The Nasdaq couldn't hold its gains and slipped into the red.
"We're seeing a lot of depressed stocks turning back around," said Peter Cardillo, chief strategist for Westfalia Investments. "Earnings are finally giving this market a lift."
"This is the third day of follow-through since the market reached a bottom on Wednesday," said Art Hogan, chief market strategist at Jefferies & Co.
The Dow Jones Industrial Average ($INDU) rose 80 points to 10,305 or 0.8 percent. The Nasdaq Composite ($COMPQ) fell 10 points to 3,473 or 0.3 percent and the S&P 500 ($SPX) gained 2 points at 1,399.
The Nasdaq 100 index ($NDX) sank 27 points to 3,429. Listen to the mid-day report.
"Today doesn't mean a whole lot," said Ned Collins, head of trading at Daiwa Securities. "We need to do more work to see if we have reached a bottom."
Decliners outpaced advancers 5 to 4 on the New York Stock Exchange, but advancers were narrowly ahead of decliners on the Nasdaq. Some 661 million shares changed hands on the NYSE and 1.12 billion on Nasdaq.
A $45 billion plan by General Electric (GE) to buy Honeywell (HON) was one of the key items shaping the trading day.
Shares of General Electric fell $3 to $49.25 Monday after the industrial giant said late Sunday it would outbid United Technologies (UTX) for Honeywell.
Honeywell gained $3.81 to $49.81, after surging $10.13 on Friday.
Under terms of the deal, GE will pay 1.055 shares of its stock for each Honeywell share. Honeywell is valued at $55.12 each under the deal. The price is a premium over the company's $46 close on Friday.
Rockwell (ROK) shares rose 10 percent to $38.63 and Raytheon (RTN.B) added 8 percent to $33.94 on the possibility that their aerospace units could be attractive to UTX or others. CS First Boston upgraded its ratings on Rockwell, Raytheon and Litton Industries (LIT).
GE, Honeywell and UTX are among the 30 components of the Dow Jones Industrial Average. See full story.
Earnings news
Dow component Minnesota, Mining & Manufacturing (MMM) posted third quarter earnings of $1.25 per share vs. $1.24 per share in a survey of analysts by First Call. The company said it expects to meet earnings expectations for the fourth quarter and for 2001. Shares jumped $1.75 to $89.13.
Dow component SBC Communications (SBC) earned 57 cents a share excluding items on revenue of $13.5 billion, a penny ahead of the First Call consensus estimates. The Baby Bell sees double-digit revenue growth and earnings growth in the "mid-teens" in 2001. Shares climbed $3.38 to $54.13.
Corning (GLW) reported third-quarter earnings of 35 cents per share vs. expectations of 34 cents a share. Revenue rose 54 percent over last year to $1.9 billion. The company forecast "strong revenue and earnings growth throughout 2001." Shares dropped $5.19 to $100.75.
On Tuesday, the Street expects earnings reports from oil companies Exxon Mobil (XOM), Texaco (TX), Chevron (CHV), and Halliburton (HAL). In the tech sector, Qwest (Q), Nortel (NT), LSI Logic (LSI) and Computer Associates (CA) are on the plate. Others include Goodyear (GT), Schering-Plough (SGP), Pfizer (PFE) and Tyco International (TYC),
Sectors
Technology stocks turned higher after a slow start with semiconductor stocks ($SOX) in the lead.
Drug stocks ($DRG) were benefiting from Merck's success.
The market's volatile internet stocks ($GIN) and biotech sector ($BTK) were also higher. Among the few laggards were oil services ($OSX), down 3.3 percent, and networking stocks ($NWX), off 2.2 percent. Financials ($XBD) were also lower.
Lucent fires CEO
Saying that it determined "an immediate change in leadership was necessary," Lucent Technologies (LU) ousted Chief Executive Officer Richard McGinn. Henry Schacht, 66, who led the company from 1995-97, is returning temporarily.
The company also warned it expects pro forma revenue from continuing operations for the current quarter to decline about 7 percent and pro forma earnings per share from continuing operations to break even. It said it would report after the bell on Tuesday.
Shares of Lucent sank 75 cents to $21.88, after falling 3 percent, then rising 3 percent.
Other factors
Merck (MRK) added $3 to $84.88 after a rating upgrade from Salomon Smith Barney.
Ariba (ARBA) gained $3.25 to $133 after the Nasdaq said the business-to-business electronic commerce and network services company would join the Nasdaq 100 index on Oct. 27.
AT&T (T) continues to be in the spotlight as the communications giant's board meets to mull over a plan to break itself up, according to published reports in The New York Times and The Wall Street Journal.
Ma Bell would re-establish itself under its most profitable unit, business services, and break off its broadband business, and struggling long distance services. It issued a tracking stock for its wireless unit (AWE) earlier this year.
The bond market was essentially flat, supported by nervousness about the Middle East and buffeted by flows in and out of stocks. |
