Closing Market Numbers
DJIA 11,079.81 +33.33 (+0.30%) S&P 500 1,499.48 +7.76 (+0.52%) Nasdaq 3,953.15 +22.81 (+0.58%) Russell 2000 516.45 +0.94 (+0.18%) 30-Year Bond 107 23/32 -8/32 5.71 Yield NOW 50 2055.77 9.63 (+0.47%)
RULE MAKER PORTFOLIO A QuickNews Extra
New optical technologies are making the Internet faster, more robust, and more reliable -- which means there will be more and more data that must be stored. Data storage leaders EMC and Network Appliance stand to benefit from this trend. While both companies have their core markets -- EMC on the high end and NetApp on the low end -- the two will increasingly battle one another in the middle market of storage solutions. A better value proposition appears to give NetApp the upper hand.
Can NBC Stage a Leak-Proof Olympics?
Competition at this summer's games will not only be between athletes on the field, but between the old and new media for control of the sights and sounds of this feverishly watched global production. It seems the Web -- and the immediacy and enhanced control it gives users over when and how they receive information -- was more than the International Olympic Committee wanted to deal with this time around.
FOOL ON THE HILL An Investment Opinion
The Republican economic plan seems to be centered around large tax cuts, which could turn out to be bad for the economy. A tax cut would probably force the Federal Reserve to raise interest rates to avoid inflation, which would slow down the rate at which the national debt is repaid. This is a bad thing, and also unnecessary while the economy's going so well.
Washington Mutual Ups Texas Position With Acquisition
Washington Mutual picks up Bank United and its 155 branches in a $1.5 billion all-stock deal. With the transaction, Washington Mutual gets a higher profile in the Texas market, an economy that is growing faster than the national average. Bank United gets access to WaMu's spectacular credit rating.
BORING PORTFOLIO A QuickNews Extra
A top-notch value investor recently said computer maker Gateway is earning more than Dell, and the market isn't seeing it. My calculations, however, put Dell far in the lead in terms of returns on equity, invested capital, and free cash flow.
Sweet Buyout Music for R&B Falcon
Transocean Sedco Forex and R&B Falcon stir up the oil patch with an $8.8 billion merger agreement. The new company will be an industry giant, but it will need to realize its future growth prospects quickly if it is to support its large market valuation.
RULE BREAKER PORTFOLIO A QuickNews Extra
We need rules in our lives, but we also need to question rules. Companies find opportunity in questioning assumptions, but it is a dangerous business -- you have to be careful to break the right rules. Ballard Power breaks rules by making fuel cells for automobiles, which may make the internal combustion engine obsolete. A best-selling author on the subject has offered a report about Ballard Power on Soapbox.com.
AT&T Says "Brand Your Own Access"
With its new co-branding program and pricing plan, AT&T WorldNet becomes the first of the leading ISPs to meet the free ISP challenge head-on. It also puts Ma Bell's ISP in competition with itself, and highlights questions about how to value companies for whom increased product demand competes with product commoditization.
FOOL PLATE SPECIAL An Investment Opinion
Most investors would be surprised to know that the best-performing stock sector this year has been utilities, up by 27%. The electric utility industry was sent kicking and screaming into a competitive environment in the mid-'90s as state after state removed the decades-old local monopoly status many held. Low inflation has helped them control costs, the booming economy has raised the top line, and the more open environment has led to some real innovation.
BREAKFAST WITH THE FOOL
Fifty-thousand striking Verizon Communications (NYSE: VZ) employees are back on the job today, ending a 15-day walkout. A tentative three-year pact covers those strikers, while Verizon stated that it expects a pact with the other 37,000 employees "shortly."
Ups
In-the-spotlight data mining software company MicroStrategy (Nasdaq: MSTR) jumped $8 9/16 to $29 9/16 today on news that the company would extend its agreement with NOW 50 component IBM (NYSE: IBM) to the effect that the latter would assemble "a large team" to sell MicroStrategy's software to IBM's enterprise customers. Financial terms of the deal weren't disclosed.
Downs
Marketing services company Valassis Communications (NYSE: VCI) lost $3 3/8 to $29 3/4 as Wasserstein Perella Securities analyst Edward Atorino downgraded the shares to "buy" from "strong buy." He also cut his share price target to $48 from $51, according to a Bloomberg story.
Inside Today's QuickNews
EMC vs. Network Appliance
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George W. Bush vs. Alan Greenspan
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Gateway Still a Notch Below Dell
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Ballard Power's Revolution
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Utilities Are Hot, But Does Anybody Notice?
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Verizon's Strikers End Walkout
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Canadian wireless network operator Clearnet Communications (Nasdaq: CLNT) dialed up gains of $13 to $44 today on news that north-of-the-border telephone company Telus Corp. agreed to buy the company for $70 Canadian per share in cash, giving it a huge boost in that nation's wireless market. The deal marks a more than 50% premium on Friday's close for Clearnet shares and includes the assumption of $2 billion Canadian in debt.
Microelectronics production equipment and integrated circuit maker JMAR Technologies (Nasdaq: JMAR) shot up $2 1/16 to $8 13/16 today as the company said in a weekend press release that it expects new products to deliver "a significant increase in overall sales beginning in 2001." New telecommunications memory devices "could add" up to $35 million in 2001 revenues next year and twice that the year after. He also said sales at the company's precision systems division are expected to grow 30% to 40% annually over the next several years. JMAR's 1999 revenues were about $25 million.
Web conferencing systems developer Evoke Communications (Nasdaq: EVOK) jumped $2 1/16 to $7 3/32 today after Robertson Stephens analyst Richard Juarez started coverage of the company with a "buy" rating. "We believe that Evoke's early offering of a scalable, feature-rich integrated solution gives the company a strong competitive position," said a prepared statement. The brokerage has done underwriting work for Evoke.
Casual restaurant operator Luby's (NYSE: LUB) gave away $1 3/4 to $6 1/4 on news that the company expects to take a pretax charge of between $12 million and $15 million, mostly related to store closings, for its fiscal Q4 ending August 31. Luby's plans to close 15 restaurants over the next year. Quarterly and full-year results are slated for release in early October.
El Paso Energy (NYSE: EPG) lost $15/16 to $57 today. The company said yesterday that a natural gas pipeline belonging to one of its subsidiaries ruptured early Saturday morning, resulting in a fire that reportedly killed 10 people in southern New Mexico. Natural gas flow in the affected pipeline, which serves the California market, hadn't been restored as of late yesterday.
Real estate investment trust (REIT) LTC Properties (NYSE: LTC) slipped $1 9/16 to $4 1/4, touching a 52-week low following reports that the company may have to file for Chapter 11 bankruptcy protection because it can't pay off its approximately $170 million in debt. Sutro & Co. real estate analyst Craig Silvers downgraded the shares to the humorous "source of funds" today from "hold."
