Friday, the August personal income report will be presented at 8:30 a.m. ET. Most forecasters expect a 0.4 percent gain in personal income and a 0.7 percent rise in personal consumption. The Commerce Department releases the personal income data at the end of a month or the very beginning of the next month. The report surveys income from a variety of sources including investment income from dividends, interest, and rents. Wages and salaries comprise the largest income segment, however, and are forecast by examining the average hourly earnings and nonfarm payroll data from the employment report. The personal consumption component of the report consists of durable, nondurable, and service items. Economists use the retail sales report to provide insight into expenditures on durable and nondurable items. Therefore, due to services consumption being less cyclical in nature, there are few surprises within the consumption section of the personal income report.
At 10:00 a.m. ET, the August construction spending report will be released. Compared to the housing starts release, the bond market does not view this report to be particularly valuable in terms of forecasting future economic growth. Most economists are forecasting a rise of 0.4 percent.
AT&T (T: news, msgs) denied it was in talks to sell its stake in ExciteAtHome (ATHM: news, msgs) or that it was in a deal with America Online (AOL: news, msgs), Reuters reported. ExciteAtHome shares declined 2 to 41 7/16 and AOL stock fell 5 1/4 to 104. Telephone shares tacked on 3/16 to 43 11/16. "We believe that such a transaction makes sense for both parties, as ExciteAtHome faces substantial challenges in executing its vision of integrated content and access, both broadband and narrowband," said Merrill Lynch analysts Henry Blodget and Virginia Syer, in a report. See related story.
Guidant (GDT: news, msgs) added 3 3/4 to 53 7/16 after Merrill Lynch named the issue a "Focus One Stock." Guidant manufactures products used in cardiac rhythm management and coronary artery disease intervention. See full story.
Internet holding company CMGI (CMGI: news, msgs) said it's acquiring Web-based advertising solutions provider Flycast Communications (FCST: news, msgs) for $690 million in stock. Stock of CMGI grew 2 1/16 to 102 3/8 and Flycast shares rallied 7 5/8 to 45 5/8. See full story.
Charles Schwab (SCH: news, msgs) slumped 1 1/16 to 33 9/16. Morgan Stanley Dean Witter analyst Henry McVey trimmed his 2000 earnings estimate to 79 cents a share from 85 cents and sliced his price objective to $44 from $50. See full story.
E-Loan (EELN: news, msgs) shrank 2 5/8 to 21 1/2 after the online provider of mortgages guided the Street to expect a pro forma loss of 34 cents or 35 cents a share in the third quarter. Most analysts surveyed by First Call had envisioned 29 cents. See full story.
EBay (EBAY: news, msgs) rallied 2 to 141. The company will become a component of the Nasdaq 100 index, replacing Centocor (CNTO: news, msgs), which is being acquired by Johnson & Johnson (JNJ: news, msgs).
Safeway (SWY: news, msgs) depreciated 4 3/16 to 38 1/16. The grocery chain operator recorded 44 cents a share in third-quarter profit, matching the First Call estimate of Wall Street analysts. A year ago, Safeway earned 38 cents. Revenue grew 16 percent. See full story.
New issue TiVo (TIVO: news, msgs) soared 13 15/16, or 87 percent, to 29 15/16. The company sold 5.5 million shares at $16 apiece, above the expected range of $11 to $13. Tivo makes a video-recorder-type device that allows viewers to watch what they want when they want. See related story.
Health maintenance organization stocks were flogged in the wake of an article in The Wall Street Journal. The piece suggested that HMOs might be the subject of a bevy of class action lawsuits brought by high-profile attorneys. United Healthcare (UNH: news, msgs) skidded 11 13/16 to 48 11/16, Aetna (AET: news, msgs) 11 7/16 to 48 1/4, and Cigna (CI: news, msgs) 8 5/8 to 78 3/8.
Wal-Mart Stores (WMT: news, msgs) climbed 1 13/16 to 47 7/16 ahead of its annual meeting with analysts Tuesday and Wednesday. "We believe that a positive tone will emanate from these meetings, which will in turn be a catalyst for the shares," said Lehman Brothers in a research note.
Hewlett-Packard (HWP: news, msgs) gained 1 3/4 to 91 following Wednesday's 5 15/16-point fall. "UNIX server business in the U.S. remains sluggish in the fourth quarter," said SG Cowen, in a note. "Other businesses remain on or ahead of plan."
Morrison Knudsen (MK: news, msgs) said it earned 23 cents a share in the third quarter, matching the Wall Street forecast, per First Call. The engineering and construction services provider earned 18 cents a year ago. The stock added 1/4 to 10 3/8.
Flowers Industries (FLO: news, msgs) said third-quarter operating net will likely undercut most analysts' forecasts. The baked foods concern blamed continued production realignment costs at its Mrs. Smith's Bakeries unit and the resulting loss of sales due to product shortages. The shares gave back 5/8 to 13 5/8.
CompUSA (CPU: news, msgs) said fiscal first-quarter sales declined 2 percent to $1.36 billion. Sales at outlets open a year or more fell 0.3 percent. The stock climbed 1/16 to 6 1/16.
Rexall Sundown (RXSD: news, msgs) recorded fiscal fourth-quarter pro forma earnings of 21 cents a share, mirroring the First Call projection. In the year-ago period, the nutritional supplements interest earned 28 cents. The shares decreased 2 1/16 to 12 5/16.
After the close of Thursday's trade, enterprise software developer Broadvision (BVSN: news, msgs) said it will split its stock 3-for-1.
After the close of Thursday's trade, Cidco (CDCO: news, msgs) said third-quarter net should come in between 1 cent and 3 cents a share vs. most analysts' estimate of 7 cents, per First Call. The marketer of caller ID products blamed its demise on Hurricane Floyd, which derailed a large East Coast marketing program, and the Taiwan earthquake, which temporarily shuttered critical component manufacturers.
MGM Grand (MGG: news, msgs) shares could get a boost Friday morning on news that BancBoston Robertson Stephens upped its estimate and reiterated a "buy" rating. Analyst Harry C. Curtis raised his estimate for fiscal 1999 to $2.15 a share from $1.97 a share. Shares rose 1 5/16 to 51 1/8.
Catalyst International (CLYS: news, msgs) said it expects a third-quarter loss due to lower-than-expected revenue as a result of longer sales cycles to prospective customers. Including one-time items, the company expects a loss of $5.7 million to $6.5 million, or 78 to 89 cents a share. Analysts polled by First Call currently expect a profit of 10 cents a share. The longer sales cycles were attributed to clients' holding off purchases due to Y2K concerns. Shares closed up 1/4 to 12 1/8.
Musicland Stores said after the market closed that its board has cleared the way for the retailer (MLG: news, msgs) to buy back up to 3 million shares. Ahead of the announcement, the stock closed unchanged at 8 7/8, down from 14 at the beginning of the year.
Hewlett-Packard Chief Executive Carly Fiorina will give a "business update" to analysts at 8:30 a.m. ET on Friday, said John Streibich, an H-P options trader at the CBOE. The tech giant (HWP: news, msgs) is currently wrapping up the second month of its fourth quarter. Shares rebounded 2 3/4 to 92 after starting September at 105.
CellStar Corp. (CLST: news, msgs) shares rose 1/8 to 7 1/2 after the leading distributor of cellular phones posted third-quarter net income of $15 million, or 25 cents a share. The per-share figure was 2 cents shy of the consensus estimate. However, the quarterly results exceeded the year-ago total of $8.2 million, or 14 cents a share. Revenue totaled $560.2 million, up 12 percent over the $501.8 million posted in the year-ago period.
U.S. Xpress Enterprises (XPRSA: news, msgs) shares sank 35 percent after the trucking company warned that earnings will fall well below the consensus estimate. Earnings for the third quarter will range between 12 to 14 cents a share, compared to the 39 cents earned in the year-ago period. Analysts polled by First Call expect a profit of 36 cents a share. U.S. Xpress cited a revenue drop due to a shortfall in tractor additions and lower-than-expected equipment utilization. Shares fell 3 3/16 to close at 5 13/16.
Penn-America Group (PNG: news, msgs) shares closed down 3/8 to 8 7/16 after the company warned it will post a surprise third-quarter loss, saying it will take a $3.6 million charge to increase its unpaid loss and loss-adjustment expenses. The increase reflects continuing losses in the company's non-standard personal automobile insurance line. Penn-America has increased its reserves, resulting in a third-quarter loss of 38 to 40 cents a share. The current estimate on Wall Street is a profit of 20 cents a share, according to First Call. In the year-ago period, earnings totaled 21 cents a share.
E-Loan (EELN: news, msgs) shares sank 2 9/16 to 21 9/16 on news third-quarter losses will be wider than expected as a 38 percent decline in the electronic mortgage lender's business reflected rising interest rates. Its loss will total 34 to 35 cents a share, vs. analysts' expectation of a loss of 29 cents. That would compare with year-ago loss per share of 11 cents. In addition, the company cited the effect of capacity constraints in secondary marketing operations. See full story.
OfficeMax (OMX: news, msgs) closed down 1 1/4 to 5 13/16 after the operator of office-supply superstores warned that Hurricane Floyd and increased expenses will hurt third- and fourth-quarter earnings. See full story.
Diversinet Corp. (DVNT: news, msgs) shares soared 2, or 24 percent, to 10 3/16 after the security software company said it will acquire Ubiq Communications for $1 million in stock. See press release.
Morrison Knudsen (MK: news, msgs) shares rose 3/16 to close at 10 5/16. The company reported third-quarter net income of $12.3 million, or 23 cents a share, on revenue of $595 million, in line with the consensus estimate. The report exceeded the year-ago totals of $9.6 million, or 18 cents a share, on revenue of $498 million.
Rite-Aid (RAD: news, msgs) shares rose 7/16 to close at 13 13/16 after the drugstore chain posted higher same-store sales for the month of September. Same-store sales rose 8.3 percent over the year-ago period, led by pharmacy same-store sales increases of 16.7 percent. However, front-end same-store sales declined by 2 percent. Total drugstore sales for the four-week period rose to $1.0 billion compared to $923 million in the year-ago period.
Stamps.com shares (STMP: news, msgs) rose 2 15/16 to close at 34 3/4 after the company announced alliances with both Lotus Development and ZDNet. Lotus will have a Stamps.com icon on its Lotus Organizer Release 6 toolbar and ZDNet will give Stamps a featured recommendation on its Web site and e-mail list. Separately, 3M said it will make Stamps.com's service available on its stationary products. |
