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Trading Slows to a Halt as Holiday Get Away Commences

Kristen French

Major Indices INDEX CHANGE % VALUE Dow 27.41 +0.27% 10,351.33 S&P 500 1.43 +0.10% 1382.95 Nasdaq 21.0 -0.69% 3183.10 Russell 2000 0.75 -0.16% 455.40 TSC Internet 1.0 -0.13% 745.50 NOTE CHANGE PRICE YIELD 10-Year Treasury 17/32 101 8/32 6.324%

By midsession, the major indices were mixed, with the Dow Jones Industrial Average up 27 at 10,351, while the Nasdaq Composite Index was down 21 to 3184 and the S&P 500 was up 1 to 1383.

The flip-flopping is due to several things. First, a lack of conviction after a harrowing week of 100- and 200-point swings has knocked the wind out of many Wall Streeters.

Bill Meehan, chief market analyst at Cantor Fitzgerald said that the market's reaction to yesterday's Goldman Sachs(GS Quote) news, which put a serious dent in some unrelated sectors and basically took out the entire market, is a sign that "this is a very sickly market."

Yesterday, Merrill Lynch analyst Judah Kraushaar lowered his estimate for Goldman's earnings and said that Goldman, itself, was uncomfortable with the Street's earnings estimates.

For more on Goldman's woes, see TheStreet.com's recent story.

Two: not many investors are even around today as many have ducked out ahead of this Memorial Day weekend.

"We should see less and less volume as the day goes on. Volume will just sort of dry up as participants take off and do the beach thing," said Doug Myers, vice president of equity trading IJL Wachovia.

And three, this morning's data didn't really abate economic and interest-rate uncertainty. The durable goods orders came in surprisingly cool, with orders declining at the fastest rate in more than eight years. But the numbers are a very volatile series, so it's hard to get a good read on one month's numbers. And these were countered by personal income and spending figures, up 0.7% and 0.4% in April. For more on today's durable goods orders, see this story.

The market probably won't get a solid indication of whether the economy has really slowed until next week's jobs numbers come in. Fears the Fed may still tack on another 100 basis points before the year's end are alive and kicking.

In NYSE trading, brokerage and financial stocks were rebounding after spinning lower early yesterday on the Goldman news.

Goldman Sachs was off 2 3/4, or 3.8%, to 70 1/4, after losing 7, or 8.8%, yesterday.

The American Stock Exchange Broker/Dealer Index was off 3.8% and the Nasdaq Financial-100 Index was off 20 to 3079.

Meanwhile, Office Depot(ODP Quote) was taking a beating after announcing that it expects its second-quarter earnings to fall 4 cents to 6 cents below analysts' estimates. The company's shares were recently down 3, or 28%, to 7 9/16.

In tech and telecom land, some bellwethers were showing strength. Cisco(CSCO Quote) and Intel(INTC Quote) were heading higher, while Nokia(NOK Quote) and Lucent(LU Quote) were countering those gains.

Other major indices were mixed, with the TheStreet.com Internet Sector Index off 1 to 745 and the small-cap Russell 2000 down 1 to 455.

Market Internals

Breadth was negative, and volume weak on both the NYSE and the Nasdaq.

New York Stock Exchange: 1,363 advancers, 1,333 decliners, 432 million shares. 30 new 52-week highs, 67 new lows.

Nasdaq Stock Market: 1,475 advancers, 2,171 decliners, 622 million shares. 15 new highs, 174 new lows.