Wall Street took a beating Monday as traders weighed the prospect of President Clinton's impeachment this week. How such an outcome will play itself out on the market remains unclear, but most investors, like most Americans, would be infinitely happier if the whole damn thing would just go away.
Major corporations, meanwhile, kept themselves busy by throwing money at one another.
The Wired Index fell 23.46 points to close at 451.80, and the Dow Jones Industrial Average was 126.16 lower at 8695.60. The Nasdaq Composite Index shed 62.59 to 1966.72, and the S&P 500 was down 25.28 at 1141.18.
Among the day's more notable deals was Microsoft (MSFT) saying it will invest US$200 million in fast-growing Qwest Communications International (QWST) -- a move that effectively allows Redmond to foist its Windows NT platform on big-ticket enterprise clients buying into Qwest's high-speed network. It also gives Microsoft a presence in the lucrative data- and voice-transmissions game or, seen another way, back-door access to the nuts and bolts of the Net.
"Microsoft has a lot of money to spend in a number of areas adjacent to its main business," said Chris Galvin, an analyst with Hambrecht & Quist. "They just want to make sure their footprint is felt in a lot of areas."
Traders, however, weren't sure if the tie-up is in the best interests of each partner. Microsoft fell $6.06 to $127.94, and Qwest was $2.38 lower at $41.
Meanwhile, the anti-Microsoft contingent was circling its wagons. Oracle (ORCL) slipped 13 cents to $37.13 on word that it would be strengthening its relationship with Sun Microsystems (SUNW) to promote computer servers that (surprise, surprise) don't need an operating system. Sun was down $1.13 at $76.25.
Some sky-high consolidation is taking place overhead as Hughes Electronics shells out about $1.3 billion to acquire United States Satellite Broadcasting (USSB). Hughes, a subsidiary of General Motors, said it will combine US Satellite's resources with its own DirecTV unit, solidifying DirecTV's position as the nation's leading direct-broadcast service. US Satellite rocketed $2.81, or 29 percent, to $12.44.
Back on terra firma, MCI WorldCom (WCOM) was Down Under making a $323 million play for OzEmail, Australia's top Internet service provider. MCI, which already owns almost 15 percent of the company, shed $2.19 to $62.19 on the news -- perhaps because rival bids for OzEmail are expected, driving its price tag higher.
Investors were even more disenchanted with Mattel's (MAT) decision to pay nearly $4 billion to acquire The Learning Co. (TLC) in a deal representing a 17-percent premium over the latter's Friday close. Of course, Mattel also said its sales have been slammed by a "substantial decline" in reorders from toy retailers, so that probably has something to do as well with the company's stock tumbling $8.13, or 27 percent, to $22.
For its part, The Learning Co. sank $3.31, or 12 percent, to $25.
One more merger? OK, fine. Here's Charles Schwab (SCH) climbing $2.06 to $41.44 as it agrees to buy a pair of Canadian brokerages, expanding its online trading services to the Great White North.
Schwab's ascent was also propelled by rumors that the company may itself be purchased by Merrill Lynch. But talk of the leading discount broker being snapped up by a well-heeled rival seems to circulate at regular intervals, so make of this what you will.
A pre-existing partnership attracted attention among Net stocks. Disney (DIS) and Infoseek (SEEK) took the wraps off a "preview edition" of their new portal, the Go Network, which looks a whole lot like others of its ilk. Despite all the cross-marketing muscle Disney will bring to the venture, investors were unimpressed by what they saw. Team Mickey fell $1.44 to $30.56, and Infoseek was $2.69 lower at $41.19.
Among other Net notables, Amazon.com shed 75 cents to $222.25 even as it was announced that the company will be added next week to the Nasdaq 100 Index, while Yahoo was down $4.44 at $191.25. In tech, IBM (IBM) dropped $5.13 to $162.88, and Dell Computer (DELL) was $2.56 lower at $64.63.
As further proof that cigarettes kill, RJR Nabisco Holdings (RN), America's second-biggest cigarette maker, said it will ax more than 4,200 workers to cope with an expected decline in sales resulting from higher prices. Investors, typically, applauded the cost-cutting move, driving Joe Camel's daddy up 50 cents to $28.81.
In finance, Citigroup (C) slid $1.69 to $46.06 amid reports that the company will take a $1 billion restructuring charge as part of its merger with Travelers Group. More than 8,000 Citigroup employees may get the sack as the two institutional giants feather their combined nest.
Although the Republicans' Dance of Death set the tone for the day's sell-off, another factor contributing to investors' unease was a report out of Tokyo that the closely watched "tankan" survey of Japanese business confidence had spiraled to a record low. The results show that most Japanese business leaders don't expect their economy to crawl out of the muck any time soon.
Fittingly, the country's Toho movie studio announced at the same time that it will resurrect everyone's favorite rubber-suited radioactive reptile to stomp all over whatever's left of Japan's economic well-being. "Godzilla Millennium" is slated for release a year from now.
