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THE DAY AHEAD: Stocks to Watch

Expect the following technology stocks to be among Tuesday's most actively traded issues: Amazon.com, Applied Materials, E*Trade, Hewlett-Packard, MCI WorldCom, Microsoft, Pegasystems, SkyTel and World Access.

  • Amazon.com Inc. (Nasdaq: AMZN)

    With more businesses going online to sell directly to consumers Amazon.com shares are overvalued, Barron's reported. This is no news flash to any one, or shouldn't be.

    Yet, to play Devil's Advocate, Amazon.com is far from doomed. While it's true that more businesses are bringing their businesses online, many aren't doing a good job. Secondly, it's difficult to get consumers to migrate to a new Web site and Amazon.com already has a significant brand identity.

    So, yes, Amazon has a difficult road ahead, but it isn't likely that it will go the way of the dinosaur. And to belabor a well-worn point, with greater competition, Amazon will have to spend more money on marketing and advertising to keep its prominence among the hearts and minds of the e-consumer. Profitability? Don't hold your breath.

    Amazon gained 4 3/16 to 118 3/4.

  • Applied Materials Inc. (Nasdaq: AMAT)

    The world's largest chip equipment maker got a bit bigger, buying closely held Obsidian Inc. for $137.5 million in stock. Applied Materials dipped 1/4 to 55.

  • E*Trade Group Inc. (Nasdaq: EGRP)

    According to The Wall Street Journal, the online brokerage agreed to buy Telebanc Financial Corp. (Nasdaq: TBFC) for $1.8 billion in stock, or $93.45 a share - a 40 percent premium from Friday's close. Telebanc provides loans and takes deposits via the Internet, phones and automated teller machines.

    E*Trade rose 2 1/2 to 44 1/2.

  • Hewlett-Packard Co. (NYSE: HWP)

    H-P will get a ton of action Tuesday after published reports said the PC maker will begin selling computers and printers online. The big announcement will come this week during H-P's semi-annual analysts' meeting on Wednesday.

    The new site will be called HP Business Store and it will open for orders on June 8.

    H-P shares closed up 1 11/16 to 94 5/16 Friday.

  • MCI WorldCom Inc. (Nasdaq: WCOM)

    MCI WorldCom, the second-largest U.S. long-distance carrier, said late Friday it would buy paging provider SkyTel Communications Inc. (Nasdaq: SKYT) for $1.28 billion. Earlier last week, MCI officials denied they were interested in the company.

    Based on MCI WorldCom's closing stock price Friday, the agreement values SkyTel common stock at $21.59, a 6 percent premium over SkyTel's closing stock price.

    Shares of SkyTel have risen sharply in recent weeks on expectations it may be acquired by MCI WorldCom. SkyTel, which has 1.6 million paging customers, recently hired Warburg Dillon Read to help it explore its strategic options.

  • Microsoft Corp. (Nasdaq: MSFT)

    Nothing major here, but the software giant's antitrust trial resumes Tuesday after a three-month hiatus. So far, Microsoft's shares haven't felt any real impact from the investigation.

    The stock closed up 2 5/16 to 80 11/16 Friday. After falling to a low of 41 9/16 last June, Microsoft shares moved up to a 52-week high of 95 5/8 in April.

    Some analysts thought Microsoft might try to offer a settlement much like Intel Corp. (Nasdaq: INTC) did. But that hasn't happened yet.

  • Pegasystems Inc. (Nasdaq: PEGA)

    The customer data software company said that the Securities and Exchange Commission had begun an investigation for its accounting and its disclosure on several items. Shares dipped 1/8 to 8 3/8.

  • SkyTel Communications Inc. (Nasdaq: SKYT)

    As mentioned above, SkyTel's going to be acquired by MCIWorldCom for $1.28 billion in stock. Tuesday should be another banner day for the paging services provider.

    Its shares closed up 1 to 20 5/16 Friday.

  • World Access Inc. (Nasdaq: WAXS)

    The long-distance time seller said that its chairman, Steven Odom, resigned for "personal reasons." Odom will stay on as a consultant for the next two years. John Phillips, already president and chief executive, will add the chairmain hat to his collection. Shares rose 7/8 to 11 3/8.

    -Eric C. Fleming contributed to this report.

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