Finance - Full Closing Bell for Thursday, July 16, 1998
** Wrong! Dispatches from the Front: Cramer Expects a Hot Dow Today
Yesterday was a frightening under-performance day for most mutual funds. Unless you are over-weighted in specific Dow stocks you couldn't keep up. Same will be true today. Managers know this. It should have the effect of really over-boosting today's Dow winners. For the entire story: Click here to read the entire story <http://audit.infobeat.com/cgi/audit.fcgi?src=ib.finance.theStreet_tip_cb_full.19980716&ad=19&click=1>
"Special Advertising Section"
Charles Schwab Corp (SCH)
CHARLES SCHWAB CORP reported 2Q EPS of $0.28 vs $0.23 in the prior year period, on revenue of $638.0 mln vs $530.7 mln. Analysts' mean estimates were $0.28, according to First Call. (Reuters 09:53 AM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555100773-fb2>
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Compaq Computer Corp (CPQ)
Late yesterday, COMPAQ COMPUTER CORP said it made "significant reductions" in its inventory levels between its factories and the consumer. "This was achieved largely by focusing the company's sales and marketing efforts on sales out of its commercial distribution channel," the company said. The company said during the most recent quarter it increased its "unit sales out" by 36% worldwide. "The company's regional business units in North America and Europe, Middle East, and Africa each realized significant increases over the same quarter a year ago," the statement added. (Reuters 08:11 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555092294-66a>
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Compaq Computer Corp (CPQ)
COMPAQ COMPUTER CORP's local arm Compaq Computer Hong Kong Ltd said it would lay off less than 10% of its staff after restructuring. Compaq, the world's largest global supplier of personal computers, acquired Tandem Computers last summer and Digital Equipment Corp on June 11, and is still in the process of restructuring. "We do not expect to lay off any more than 10% of Hong Kong-based staff," newly appointed managing director Peter Yeung told a news conference. Local staff number 250 to 300, he said. (Reuters 05:59 AM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555098139-d18>
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General Electric Company (GE)
USA NETWORKS INC Chairman Barry Diller held preliminary talks with GENERAL ELECTRIC CO about merging NBC Inc. with his company but was thwarted by Edgar Bronfman Jr., whose Seagram Co. owns 45% of USA, the Los Angeles Times reported. Citing sources close to the talks, the newspaper reported that the deal would have been structured as a stock swap valued at about $15 bln to $20 bln. Bronfman, CEO of Seagram, objected to the deal because it would have significantly reduced his stake in USA Networks, the Times reported. (Reuters 12:07 PM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555102189-098>
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General Electric Company (GE)
Television network NBC said it was buying a 5% stake in TDN, a joint venture of GEMSTAR INT GROUP LTD and Thomson Consumer Electronics that is developing an interactive television guide called Guide Plus+ Gold. As part of the agreement NBC, a unit of GENERAL ELECTRIC CO, will provide data bandwidth in its television signal to support demand for the television guide, support a multimillion dollar advertising campaign to promote its services, and itself will become a charter advertiser. In return for its investment, NBC will get featured placement on Guide Plus+ Gold, along with its cable networks, MSNBC and CNBC. (Reuters 08:43 AM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555100086-b0a>
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IBM (IBM)
IBM and NEC CORP have agreed to work together to establish a standard for "electronic watermarks" to protect copyrights on the contents of products such as digital video discs (DVD). The two firms said they plan to integrate their electronic watermark technology and then present the standard to the Copyright Protection Technical Working Group. Electronic watermarks can authenticate electronic images by embedding hidden data patterns within the video signal, they said. (Reuters 02:46 AM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555096222-b53>
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Lucent Technologies (LU)
Motorola Inc. (MOT)
A battle for world supremacy in mobile telephone technology is heating up. On one side is CDMA, comprising big U.S. and Asian telecommunications companies. On the other is the European-based GSM group. The CDMA Development Group (CDG), comprising 100 companies including LUCENT TECHNOLOGIES, MOTOROLA INC and QUALCOMM INC, says its technology has superior voice quality, increased base station capacity and unequalled coverage. It accuses the Europeans of unfair trade by essentially stopping commercial CMDA technology from entering Europe and trying to tweak future "third generation" mobile telecommunications standards, to put current CDMA operators at a disadvantage. (Reuters 12:42 AM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555094972-c00>
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MCI Communications Corporation (MCIC)
Late yesterday, MCI COMMUNICATIONS CORP said it may accelerate its capital spending to replace the revenue and earnings growth potential it will lose due to the sale of its Internet business. MCI said it will use the proceeds of the deal, which are expected to be about $1.5 billion before taxes, to pay down debt. The asset sale will give MCI the, "flexibility to accelerate capital spending, including internationally, to replace over time the revenues and earnings potential of the Internet MCI business or the impact of non-competes," MCI's chief financial officer Michael Rowney said in a conference call. (Reuters 06:34 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555091526-0f9>
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MCI Communications Corporation (MCIC)
Worldcom Inc (WCOM)
Late yesterday, MCI COMMUNICATIONS CORP and WORLDCOM INC said they still need the approval of utilities regulators in four states to complete their merger. The companies said in a conference call with analysts that they expect those approvals, along with an okay from the FCC, by the end of the summer. "We do not see any significant issues that would preclude a summertime completion of the merger," MCI CFO Michael Rowney said. Earlier on Wednesday, the U.S. Justice Department said it would approve the merger as long as MCI sold all of its Internet businesses. That followed approval under similar conditions by the European Union last week. Rowney said the four states yet to approve the merger were California, Montana, Pennsylvania and West Virginia. (Reuters 06:06 PM ET 07/15/98)
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MCI Communications Corporation (MCIC)
Late yesterday, CABLE AND WIRELESS said it had established itself as a leader in the global Internet market with a $1.75 billion acquisition of the Internet assets of MCI COMMUNICATIONS CORP. Chief executive Richard Brown told Reuters that the acquisition, which accounts for an estimated 25% to 35% of the booming U.S. Internet market, was forecast to grow by 50% to 100% per year, yielding revenues of $650 million in the first full year. More than 1,000 employees from MCI will be transfered to C&W in a move the company said complemented its strong Internet presence in the Asia Pacific region, Britain and Australia. (Reuters 10:31 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555093649-cc9>
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MCI Communications Corporation (MCIC)
Worldcom Inc (WCOM)
A divestiture agreement announced late on Wednesday will not prevent MCI COMMUNICATIONS CORP and WORLDCOM INC. from immediately wooing back more than 300,000 customers of dial-up Internet service from CABLE AND WIRELESS ADR. In a call with analysts, MCI officials said that under so-called non-compete arrangements they would be barred from approaching some customers sold to Cable & Wireless for as much as two years. But the non-compete arrangements do not apply to dial-up customers, the officials said. (Reuters 06:37 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555091484-336>
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Merck And Co. Inc. (MRK)
Two new asthma drugs can help prevent attacks after exercising according to two studies. One study looked at the long-term use of GLAXO WELLCOME PLC's drug Serevert. A month-long test of 20 volunteers found that the medicine worked, but the day-to-day duration of its effectiveness waned over time. In the second study, 110 patients received either a placebo or MERCK AND CO. INC.'s Singulair. Dr. Jonathan Leff of Merck, and his colleagues, concluded that the drug "provided significant protection against exercise-induced asthma over a 12-week period." Unfortunately, it fails to work in 1 out of 4 people. (Reuters 10:06 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555093406-6be>
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Microsoft Corporation (MSFT)
Late yesterday, NETSCAPE COMMUNICATIONS CORP will introduce a new and improved Internet browser along with an aggressive marketing campaign designed to stem the loss of customers to archrival MICROSOFT CORP. The new Communicator 4.5 browser will incorporate innovations that make it easier to surf the Net, such as a "smart browsing" system. Netscape plans to support the new browser with a $10 million marketing plan and a broad program to distribute 125 million copies. "It will improve our position because it creates even more product superiority relative to Microsoft's browser," said Bob Lisbonne, Netscape's senior vice president of client products. (Reuters 11:36 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555094321-a3c>
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Microsoft Corporation (MSFT)
Late yesterday, NIPPON TELEGRAPH AND TELEPHONE said that it and MICROSOFT CORP of the United States had agreed on a broad tie-up in the electronic commerce business. Under the agreement, NTT would market electronic commerce business solution packages based on Microsoft's software for web-servers starting from September. (Reuters 12:51 AM ET 07/16/98)
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Microsoft Corporation (MSFT)
Salomon Smith Barney analyst Neil Herman said he expects MICROSOFT CORP will beat Wall Street estimates when it reports 4Q earnings. In a note, released late Wednesday, Herman said he expected Microsoft would report earnings per share of about $0.02 above his and the Wall Street consensus estimate of $0.48 a share. However, he said he believed market anticipation of strong results was largely priced into Microsoft's stock. (Reuters 12:46 PM ET 07/16/98)
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Microsoft Corporation (MSFT)
After market close, MICROSOFT CORP reported 4Q EPS of $0.50 vs $0.40 on revenues of $3.9 bln vs $3.1 bln last year. Analysts' mean estimates were $0.48, according to First Call. For FY 98 the company reported EPS of $1.67 vs $1.32 last year. (Reuters 05:02 PM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555105408-d8e>
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Microsoft Corporation (MSFT)
MICROSOFT CORP expects its revenue and profit growth rates to slow further in the coming fiscal year, a company executive said after market close. Carla Lewis, senior director of investor relations, said as the company grows in size it becomes increasingly difficult to maintain its high revenue growth rates, which slowed to 28% in the year just ended from 57% in fiscal 1997. Although the Windows 98 operating system upgrade only shipped June 25, Lewis said in an interview that Microsoft recognized $150 million in revenue from the product for the 4Q based on what she called an enthusiastic retail sell-in. (Reuters 05:34 PM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555105893-6b6>
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Philip Morris Companies Inc. (MO)
The anti-tobacco lobby opened a new front against cigarette and cigar makers late Wednesday when the city of Los Angeles sued 16 of them for failing to warn about the dangers of second-hand smoke. City Attorney Jim Hahn, said it was the first legal action of its kind in the United States. The lawsuit claims the tobacco companies are violating California Proposition 65, a voter-passed initiative that requires anyone doing business in the state to warn the public before exposing them to carcinogens or other toxins. Spokesmen for the tobacco industry were not immediately available for comment. (Reuters 01:19 AM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555095327-726>
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Sun Microsystems Inc. (SUNW)
Late yesterday, SUN MICROSYSTEMS INC said it is developing new software called Jini that allows any computing device to be easily connected to a computer network, with potentially wide-reaching implications. The goal of Jini, a research project inspired by Sun Micro co-founder Bill Joy, is to dramatically simplify interaction with networks, Sun executives said. The software would let any computing device -- including cellular phones, pagers, laptops and even home appliances -- easily connect to any computer network. "It's all about simplifying the world," said Mike Clary, senior product manager of Jini. "It's a very simple idea that has wide-ranging implications in terms of bringing back simplicity." (Reuters 10:24 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555093578-098>
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Sun Microsystems Inc. (SUNW)
After market close, SUN MICROSYSTEMS INC. reported 4Q EPS of $0.69 vs $0.61 in prior year period, on revenues of $2.88 bln vs $2.54 bln. Analysts' mean estimates were $0.72, according to First Call. (Reuters 04:38 PM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555105144-44c>
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Sun Microsystems Inc. (SUNW)
After market close, SUN MICROSYSTEMS INC reported higher earnings for its 4Q, citing record shipments of server and workstation computers and lower expenses. "We are delighted with the record revenue and net income levels achieved in both the 4Q and fiscal year 1998," said Chief Executive Scott McNealy. "The results speak for themselves, Sun continues to gain share," he said. (Reuters 05:17 PM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555105583-1bc>
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Telecommunicaoes Brasileiras Sa (TBR)
Late yesterday, Brazil's government believes it can overcome a barrage of legal challenges and stage the $14-billion-rated privatization of TELECOMMUNICAOES BRASILEIRAS SA on schedule on July 29, Communications Minister Luiz Carlos Mendonca de Barros said. With two weeks to go before Latin America's biggest-ever privatization, 400 lawyers from the government's legal department and from Telebras were on the lookout for attempts to block the sale, the minister told foreign correspondents. (Reuters 07:52 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555092122-54f>
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Telecommunicaoes Brasileiras Sa (TBR)
The Brazilian government will challenge a proposal to charge tax on cellular telephones retroactively, with the privatization of TELECOMMUNICAOES BRASILEIRAS SA just two week away, the Communications Ministry said. Communications Minister Luiz Carlos Mendonca de Barros and Finance Minister Pedro Malan met late Wednesday to discuss a decision by states to levy a so-called ICMS tax on start-up fees for telephone users, a ministry spokesman said. Before the meeting, Mendonca de Barros said the issue was "nothing to lose any sleep over" and that the ministry's lawyers believed it would not affect the privatization of Telebras, slated for July 29, the spokesman said. (Reuters 11:09 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555094050-417>
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Telecommunicaoes Brasileiras Sa (TBR)
A proposal to extend a tax to include telephone start-up charges will not have "a significant impact" on the value of TELECOMMUNICAOES BRASILEIRAS SA, the head of Brazil's telecommunications regulator said. "I do not believe that this will create a significant impact on the prices (of the Telebras subsidiaries) because all their revenues are already taxed," said Renato Guerreiro, head of the National Telecommunications Agency (ANATEL). But Guerreiro told a news conference taxing start-up charges would raise the cost of access to telephones, reducing the number of new clients among poorer Brazilians. (Reuters 03:50 PM ET 07/16/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555105129-dd9>
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Travelers Group Inc. (TRV)
A potential merger of two giants of the U.S. health care business, MCKESSON CORP and HBO AND CO, fell apart late Wednesday amid angry charges of a damaging leak by investment banker Salomon Smith Barney. HBO CEO Charles McCall said in an interview with Reuters that Salomon, a TRAVELERS GROUP INC. unit, leaked the deal, causing a sell-off in HBO shares. McCall stopped short of blaming the deal's collapse on the Salomon leak, but he said HBO shareholders were damaged by it. "We lost over $1 bln worth of market cap yesterday because of their leak on that. But I think the deal had basically broken up before that," McCall said. (Reuters 11:49 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555094443-fc2>
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Worldcom Inc (WCOM)
Morgan Stanley Dean Witter said it raised its share price target on WORLDCOM INC to the mid-$60s from $52. Analyst Stephanie Comfort reiterated strong buy on the stock. (Reuters 09:52 AM ET 07/16/98)
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Yahoo Corporation (YHOO)
Internet media company YAHOO CORP plans to use local advertising agencies for creative work in Europe after splitting with Publicis. A spokeswoman for Yahoo!'s European headquarters said on Wednesday that it was reviewing the pan-European creative work produced by Publicis earlier this year using the tag "Do you Yahoo!?" to attract first-time users. Yahoo! said in a statement that it was retaining Publicis' Optimedia unit for media buying across Europe and the decision to part company on creative work was by mutual consent. (Reuters 06:34 PM ET 07/15/98) For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555091374-f0c>
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Dow Jones 30 Industrials (DJIA)
MARKET NEWS: The Dow resumed its summer rally with more scorching gains Thursday to end at a record high, also helping the Nasdaq close above 2000 for the first time, as investors rewarded good earnings. The Dow closed up 94 points, or 1.01% higher, at 9328. The Dow's prior record was 9246, set Tuesday. The tech-heavy Nasdaq index gained six points to end at 2000.56, its first close above 2000, and a doubling of the mark set three years ago. The S&P 500 gained nine to 1184. On the New York Stock Exchange, advancing issues led decliners by a slim 8-to-6 margin with 680 million shares changing hands. The long bond fell 14/32 to yield 5.74%. For the full text story, see full story <http://www.infobeat.com/stories/cgi/story.cgi?id=2555105818-1ed>
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