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Roundup: Markets on 14th October 1998

Dow stable, but it looks like the latest Japanese rescue plan won't work

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The Dow was marginally up, and Nasdaq was up 2 per cent because of a dearth of bad news, although the rally looked a little fragile. The Nikkei was down 1.3 per cent yesterday in thin trading, and was down again this morning. The Japanese government's plan to recapitalise the banks with Y60 trillion looked as though it would not work as the banks look as though they will not ask for funds for fear of provoking a run on their shares - and losing some face of course. Goldman Sachs did a volte face on its forecast for the dollar, and downgraded it sharply to Y109 in a three to six month view, and Y120 in October 1999, having forecast Y135 for January 1999 just ten days ago. Cisco, eyeing rivals Lucent and Northern Telecom, announced yesterday it was buying the closely-held telecom equipment manufacturer Selsius Systems for $145 million in stock and cash. Selsius specialises in voice over networks and has developed special telephones and Call Manager software. Selsius is a wholly-owned subsidiary of Intecom, which is in turn owned by Lagardere, the French media and technology company. Cisco's objective is to develop single networks for voice, data and video. This acquisition follows Cisco's announced policy of acquiring around a dozen companies over the next year. Microchip Technology delivered Q3 eps up one cent over the year-earlier quarter and its CFO said that its business will be up this year to give it a market share of 9 to 10 per cent, compared with a 10 per cent decline in the market for microcontrollers. Motorola's share is declining to around 19 to 20 per cent. Compaq put on 4 per cent at the end of its first day of trading following its results. Intuit put on 7.5 per cent, 3COM and Netscape gained 5 per cent, Oracle, Electronic Arts, Microsoft, Rational and National Semiconductor 4 per cent. SCO lost 5 per cent, and Symantec dropped 3.5 per cent How grateful the Italians are for an Italian version of Excite, which put on 5 per cent, while its partner Telecom Italia's American depositary shares added 11 per cent. The Street's neurotics pushed Apple down 4 per cent after it reported fiscal Q4 eps of 68 cents, beating the estimates by 19 cents, and up 87 cents (before charges) over last year's Q4. Cambridge Technology Partners, a computer services company, surrendered 22 percent despite on-target earnings of 25 cents/share. The revenue growth was lower than was expected, which the company blamed on RAD customers deferring or cancelling application development projects for Y2K reasons. Seagate fell 13 per cent after delivering eps of 19 cents, 2 cents above expectations. After $84 million in special charges, the net loss was $30 million, which was better than the year-ago loss of $240 million. Revenue was $1.55 billion. It is generally thought that the disk drive business is picking up again following Asian manufacturers coming online. USWeb has acquired 33 Web service companies over the last two years, and yesterday delivered $34 million in Q3 sales, beating analysts' estimates of $31.5 million - but recording a loss of $38.5 million, which included acquisition charges. It was rewarded by having its shares marked up 29 per cent. E*Trade had a fiscal Q4 loss of 33 cents/share or $16 million, but revenue rose 32 per cent to $69 million, up from $52 million in the year-ago quarter. Losses are expected to continue as part of its investments in technology and marketing, including $150 million on its web site. The company now has 544,000 accounts (share traders), up from 225,000 a year ago. ® Click for more stories

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