US EQUITIES MIDDAY: WAVERING, SEEKING DIRECTION IN NEWS VACUUM
--DJIA up 16; Nasdaq 6; S&P; 500 up 3 --Chip stocks higher; financial shrs slip
By Rebecca Byrne, U.S. stocks hovered around
unchanged levels in midday trade, with little economic or earnings news to
inspire investors. A trio of mergers in the media, semiconductor and biotech
arenas sparked some selective buying, however. The Nasdaq was last up 6, or
0.18%, to 3796 and the Dow Jones industrial average was up 16, or 0.14% to
11,042. The S&P; 500 was up 3, or 0.24%, to 1475.
* * * "We're deep into the August vacation season; it's just very quiet," said
Brian Conroy, trader at J.P. Morgan. "Mondays and Tuesdays have been quiet
recently, but this week they'll be even more so in anticipation of the (consumer
price index)." The CPI--the last major economic report before the Fed meets Aug.
22--is due Wednesday. On the Dow, Hewlett-Packard (HWP), Home Depot (HD) and
Eastman Kodak (EK) led the gainers. Home Depot, which rose 3% to 57 3/4, will
release earnings Tuesday; H-P, which added 1% to 111 7/8, will report on
Wednesday. A total of 25 S&P; 500 companies will release earnings this week,
including 14 retailers. 3M (MMM), J.P. Morgan (JPM) and IBM (IBM) led on the
downside. "The break through the 10,850 level last week gives the DJIA a minimum
projected target of 11,400 and will likely even be higher to the all-time high
level of 11,750," said Robert Dickey , chief technical manager at Dain Rauscher.
But Dickey said the Nasdaq needs to rally beyond 4100 to trigger the same
bullish signal. Volume on the NYSE hit 381 million shares with advances beating
declines by 1,438 to 1,214. Despite the thin volume and general lethargy in the
market, shares of Chris-Craft Industries Inc. (CCN) rose 27% to 78 13/16 after
News Corp. (NWS) said it would acquire the company and its two main units, BHC
Communications Inc. and United Television Inc., in a $5.35 billion deal. News
Corp. fell 1% to 49. Broadcom Corp. (BRCM) rose 3% to 233 3/8 after agreeing to
buy optical communications chip maker NewPort Communications Inc. in a stock
deal worth $1.24 billion. PathoGenesis Corp. (PGNS) rose 16% to 37 31/32 after
Chiron Corp. (CHIR) said it would acquire the company for $38.50 per share in
cash, or about $700 million. Chiron fell 8% to 44 3/4. In addition,
semiconductor stocks were mostly higher Monday, with shares of Micron Technology
(MU) up 5% to 79 7/8 after Salomon Smith Barney reiterated its buy rating on the
stock. Still, the major averages
were unable to make any serious headway, and weakness in computer hardware
stocks weighed on the Nasdaq Composite index for a second straight session. Dell
Computer (DELL) fell another 2% to 36 13/16 after a 10% drop Friday. "The stock
market is currently bugged about a 'profit air pocket,' but we think the concern
is overdone," said Jeffrey Applegate, market analyst at Lehman Brothers.
"Double-digit earnings growth this year and next seems likely; we think the Fed
will help foster this by letting the economy grow at potential." Volume on the
Nasdaq hit 591 million shares, with declines beating advances by 1,928 to 1,769.
In the bond market, the 30-year Treasury fell 7/32, pushing its yield up to
CORPORATE NEWS Peco Energy Co. (PE) and Sithe Energies Inc. formed a definitive
pact under which Peco Energy Co. will acquire 49.9% of Sithe North America. Peco
rose 2% to 48 3/4. Toys R Us (TOY) posted a second-quarter profit of 1 cent per
share, beating First Call's breakeven view. Shares rose 5% to 18 1/4. Lowe's
(LOW) reported a second quarter profit of 73 cents per share, meeting First Call
estimates. Shares added 4% to 45 3/4. Thousands of technicians and operators for
Verizon Communications (VZ) entered their second week on strike, leaving
consumers in the Northeast and Mid-Atlantic U.S. states saddled with more delays
in telephone repairs and installations. Verizon rose 1/8 to 41 5/8.
ECONOMIC NEWS U.S. business inventories rose for the 18th consecutive month in
June, climbing 0.9%. The rise in inventories at factories, wholesalers and
retailers was above the consensus estimate for a 0.6% gain. Inventories at auto
dealers surged 2.7%. Business sales also
rose 0.9%, leaving the inventory-to-sales ratio at 1.32 in June. End
ADD1: US EQUITIES REVIEW: BROADLY HIGHER; FINCLS, TECHS LEAD RALLY
After an indecisive start, U.S.
stocks ended higher Monday as optimism over the interest rate outlook fueled
US CREDIT REVIEW: BONDS UP 5/32 AFTER RETRACING EARLY LOSSES
Treasury prices managed to close slightly higher Monday after the bond market
spent most of the session erasing the losses posted overseas and in early U.S.
trading. In spite of the comeback, traders were generally somewhat bearish.
UK STOCKS REVIEW: UP AS TECH, TELECOMS, INSURANCE ISSUES FIRM
U.K. blue chip equities had a
steady but unspectacular start to the week, as a strong performance by
insurance, retail and most telecoms stocks left the benchmark index with modest
gains at the end of the day. The FTSE-100 index closed up 35.4 points, or 0.5%,
GERMAN STOCKS PM: DAX AT INTRADAY LOWS, FOLLOWING NASDAQ DOWN
German's DAX moved sideways near intraday lows
toward the end of trade on bearish impetus from U.S. stock markets, which saw
the Nasdaq Composite and the Dow showing signs of weakness. In overall thin
turnover, Deutsche Telekom AG was near the top of daily percentage gainers as
WHOLESALE INVENTORIES ROSE 0.9 PERCENT
The Commerce Department said Monday that wholesale
inventories rose 0.9 percent in June after rising a revised 0.9 percent in May,
which was originally reported as rising 0.8 percent. Most economists on Wall
Street were expecting inventories to rise 0.5 percent during the month.
US DEBT FUTURES ALERT: SEP BONDS STEADY BUT RANGE-BOUND