Reverse spin / The week in Review

As the Dow Jones Industrial Average moped around 10,000 and the Nasdaq composite headed for Chile with three straight triple-digit-loss days, a poll of Wall Street’s primary traders showed that they think the Federal Reserve will boost interest rates by a quarter point tomorrow.

Then came reports that inflation was barely noticeable. The Dow imitated a well-made souffl‚, rising 499.19 points. The Nasdaq zipped up 3%, too.

Why? Fahnestock Viner Holdings Inc. market strategist Alan Ackerman knows: “Essentially, the market continues to suffer from behavior disorder.”

Limited action, too

Limit orders are executed only a limited amount of the time, Securities and Exchange Commission Chairman Arthur Levitt said at Northwestern Law School, and he’s “deeply troubled,” he said. “In far too many cases limit orders [those placed for trades at a specific price] are being mishandled by market intermediaries.” Good bureaucratic leader that he is, Mr. Levitt asked his staff to prepare a report.

The SEC also proposed legislation to give investors dope about the effect of taxes on their mutual fund portfolios. A House committee also ordered the SEC to develop such rules within 18 months. By then the market may have tanked.

Darn Teuton

Talk around the street has the about-to-merge Deutsche Bank AG and Dresdner Bank AG eying major U.S. securities houses the way a lion eyes a gazelle. All the top four are candidates to be guest of honor on a dinner platter: Merrill Lynch & Co. Inc., Goldman Sachs Group Inc., Morgan Stanley Dean Witter & Co. and Paine Webber Group Inc. A Dresdner director was quoted on the transatlantic leap: “It’s obvious they’ll do that.”

Aetna erupting

Analysts didn’t see the point of Aetna Inc.’s plan to cold-shoulder a $10 billion takeover bid and split into two companies, one for health insurance and one for financial services. Aetna alpha male William Donaldson, disagreed, saying the plan would increase links to doctors and hospitals and sharpen the focus on money management.

School pays

In September, Mike McCaffery, 46, chairman of FleetBoston Financial Group’s Robertson Stephens investment bank, is going back where he earned his MBA to manage Stanford University’s $7.9 billion endowment.

What’s the beef?

The Commodity Futures Trading Commission is allowing cattle-trading to enter the Internet age, with its approval of FutureCom Ltd. as the first web-based futures exchange. It’s owned by Texas Beef Co. in Amarillo.

Elsewhere on the virtual superhighway, the Pacific Stock Exchange and Archipelago, an electronic trading system, blueprinted the nation’s first purely electronic national exchange that they hope will shut up open outcry trading once and for all. The plan needs SEC approval.

Cryin’ in Zion

You’d think that in Utah, where plural marriages were once the norm, tying the knot would be as easy as tying your shoes. Not this time. The state’s biggest bank, First Security Corp., is accusing Zions Bancorp. of acting like an exceedingly nervous groom after Goldman Sachs said the deal wasn’t so hot for Z-stockholders. Of course, First Security recently told stockholders that first quarter earnings were expected to be off by 27%, which is akin to announcing that the bride had done a striptease at the bachelor party. The all-stock deal was once worth $5.9 billion; now it’s down to $3.4 billion. Is that the marriage penalty?