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by 7/28/2000 10:32 AM
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This morning, Nortel Networks (NT - 72-3/8) announced that it is buying Alteon WebSystems (ATON - 126-3/4), which provides next-generation Internet infrastructure solutions. The deal is valued at $7.8 billion and would involve NT issuing 1.83148 shares for each ATON share. The conversion values each ATON share at $144 (very little premium over yesterday's close of 142-5/8 and off of ATON's peak price of 160-9/16). Normally on such an agreement, the acquirer (NT) would see its shares drop in price while the acquired (ATON) enjoys a rally. However, it appears that both companies are suffering this morning. ATON is now down by more than 16 points, while NT is in the red by over six points. In a Market Observation from July 21, we noted a relatively large bullish credit spread on ATON, as it broke above prior resistance around the 138 level on positive brokerage comments. All is relatively quiet in ATON's options pit today, while 992 contracts have crossed the tape on the NT out-of-the-money August 70 put.<
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by 7/28/2000 9:26 AM
Stocks quoted in this article:
Yesterday, light-emitting diodes maker Cree (CREE - 112-1/2) announced that its fourth-quarter net income came in at 30 cents per share, topping Street expectations by three cents per share. In Thursday's trading, the stock closed at its lowest level since May 26. Since logging a short-term intraday high two weeks ago, the shares have lost nearly 29 percent of their value. The equity's 10-day and 20-day moving averages appear on the verge of a bearish crossover, which can be an indication of near-term weakness. CREE is trading lower by more than one percent, or nearly two points, in pre-market activity. Information from Multex shows that the security remains relatively unknown on Wall Street, as there are only seven analysts currently covering this laggard, all of which rate it as a "buy." Any downgrades or new negative coverage could further limit CREE.
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by 7/28/2000 8:50 AM
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Today's gross domestic product report was not as tepid as investors had hoped. In fact, the red-hot economy notched another strong 5.2-percent growth rate for the second quarter. The positive note is that recent interest-rate increases did serve to put a damper on consumer spending, which rose by three percent compared to the 7.6-percent advance in the first quarter. This was the smallest increase in consumer spending in the last year. Wringing the enthusiasm out of ebullient buyers has been an implicit focus of the Fed during its series of interest-rate hikes. Aside from a brief plunge right after the report was released, futures markets are reacting surprisingly well and are pointing to a positive open.
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by 7/28/2000 8:38 AM
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Global stock markets fared relatively well after a dismal perfmormance for technology stocks in the U.S. Seven of 18 world markets are higher thus far. On average, the overseas markets are 0.19 percent lower. The top four major markets and their respective returns are Finland (HEXND - 14010), up 3.87 percent; Sweden (AFFND - 5743), up 0.60 percent; United Kingdom (FTIND - 6383), up 0.49 percent; and Switzerland (SMIND - 8018), up 0.31 percent. The bottom four major markets and their respective returns include Japan (NIKKEI - 15838.6), down 2.12 percent; Japan (TOPIX - 1452.9), down 1.68 percent; Hong Kong (HKIND - 17184), down 1.52 percent; and South Africa (JIIND - 8633.6), down 1.04 percent.<
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by 7/27/2000 4:03 PM
Stocks quoted in this article:
Applebee's International (APPB - 22-3/4) owns and operates more than 1,200 casual restaurants across the United States and in eight other countries. Today, shares of the eatery plunged nearly 22 percent on extremely heavy volume. This decline was spurred by the firm's report of lower same-store sales for the second quarter. Additionally, APPB officials said that year-end earnings per share would likely fall just shy of Wall Street estimates. In response, the stock faced brokerage downgrades at both Merrill Lynch (MER - 127-1/16) and Morgan Stanley Dean Witter (MWD - 92-1/2). The stock closed at a level not seen since January 1999. Over 4.6 million APPB shares were traded today. Average daily volume for the equity is around 500,000 shares.
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