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Street eyes 10,000 - again
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March 15, 1999: 7:29 a.m. ET
Mergers could boost Dow but will bellwether index hold the milestone?
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NEW YORK (CNNfn) - Wall Street will be eyeing a string of merger deals Monday that could give the market the strength to mount a final assault on Dow 10,000.
The blue-chip index flirted with the 10,000 milestone Friday but fell short as earnings worries and weakness in tech stocks pulled the market lower. The Dow Jones industrial average fell 21 points to 9,876 but still rose 1.4 percent for the week. The Nasdaq composite, weighted with tech issues, fell 31 points to 2,381 Friday but managed a gain of 1.9 percent for the week.
Two big mergers will be on investors' screens as trading resumes - Fleet Financial said Sunday it would buy BankBoston for stock valuing BankBoston at about $53 a share, or $16 billion.
Separately, DuPont has agreed to buy the 80 percent of seed company Pioneer Hi-Bred that it does not already own for $40 a share, or about $7.7 billion.
BankBoston (BKB) rose 1-1/6 to 46-15/16 Friday while Pioneer Hi-Bred (PHB) soared 9-13/16 to 34-5/16 as speculation about a deal spread. DuPont (DD) fell 3/8 to 57-3/4 while Fleet (FLT) added 1/8 to 44-3/4.
The deals could boost stock prices as investors reason corporate chieftains are still willing to pay up for some undervalued companies.
S&P futures on the Globex exchange system were little changed Monday, indicating a mixed open on Wall Street. Typically one point on the futures index equals eight points on the Dow as trading begins.
(Click here for the latest S&P futures quote)
Overseas, stocks fell in Europe and were mostly higher in Asia, boosted by a 1.9 percent rise Tokyo's Nikkei stock index. The dollar fell to 117.81 Japanese yen from 118.78 in New York late Friday and was little changed at $1.0950 to the euro.
Oil prices rose in Europe after ministers from producing countries agreed on output cuts. North Sea Brent crude rose 16 cents to $12.72 a barrel.
In the bond market, the yield on the 30-year Treasury was unchanged at 5.52 percent.
In other merger deals, El Paso Energy agreed to buy Sonat for $3.9 billion plus the assumption of $1.9 billion in debt, a deal that would create the biggest gas pipeline company, and Ciena, a maker of gear for fiber-optic networks, said it would buy two closely held telecom equipment makers for almost $1 billion in stock.
El Paso (EPG) fell 2-15/16 to 35-3/4 while Sonat rose 2-15/16 to 30-1/16. Ciena fell 1-3/16 to 26-13/16.
Other stocks to watch include CMGI, whose CEO has resigned from Lycos' board, saying he'd prefer Lycos (LCOS) to find a merger partner other than USA Networks (USAI). CMGI, a big Lycos shareholder, is to become a component of the Nasdaq-100 index, replacing Netscape, which is being acquired by America Online. CMGI (CMGI) tumbled 18-1/8 to 164 after reporting disappointing earnings last week.
Citigroup could also be active after famed investor Warren Buffett did not mention it as one of the biggest holdings of Berkshire Hathaway holding company - indicating Buffett either sold his stake in Travelers Group before it merged with Citicorp last year or sold the Citigroup stock he received in the merger. Citigroup (C) ended last week unchanged at 65-15/16.
UAL said it expects first-quarter earnings of about $1.35 a share, above Wall Street forecasts of $1.12 a share, according to First Call, which tracks analysts' estimates. UAL (UAL), owner of United Airlines, the nation's biggest carrier, rose 2-1/16 Friday to 67-1/16.
In the new offering market, Internet company iVillage Inc., plans to sell about 3.6 million shares in an initial public offering worth about $47 million. The company, a group of Internet sites for women, has been accused of accounting misdeeds, which it denies.
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