Stocks Mixed in Early Action

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Almost all major indices were slipping into the red this morning after the Nasdaq Composite Index lost its footing, recently down 8 to 3838. The Dow Jones Industrial Average and the S&P 500 were also lower, off 67 to 10, 648 and 8 to 1470 respectively.

"It's relatively quiet this morning," said Jim Benning, a trader at

BT Brokerage


Friendly housing starts and consumer sentiment numbers earlier this morning weren't giving any fuel to this market.

"After recent data, these numbers weren't so surprising, that's why they didn't have a lot of impact," said Benning.

With some pretty cool numbers in recent weeks, the market continued to weigh the likelihood that interest rates will stay put at the


June 28 meeting against fears that an economic slowdown will bite into earnings.

So watch out for earnings warnings, which tend to surface as the quarter nears its end (right about now).

Meanwhile, investors may be spooked by today's "triple-witching," the simultaneous expiration of index futures, index options, and selected stock options, but Benning said any sharp swings caused by the expirations would be short-lived.

"The effects of triple-witching always reverse themselves the next morning anyway, so anything weird that happens today will turn around on Monday," he said.

Futures and options expirations, which expire in the morning and afternoon respectively, tend to boost market volatility as institutions roll over their quarterly contracts. The September contract started trading last Thursday, but the market can pop quickly in either direction on the last day of expiration.

There are a number of hot little stocks this morning, including


(QCOM) - Get Report



(XRX) - Get Report

, brokerage

Lehman Brothers




(RMBS) - Get Report


Red Hat



Qualcomm was rebounding this morning after tumbling yesterday and the stock was recently up 3 15/16 to 65 3/8. Yesterday,

Chase Hambrecht & Quist

downgraded the company's earnings estimates.

took a look at what happened to this

former highflier in a story yesterday. We also looked at the

analyst who thought the stock was going to the moon just six months ago. And another of our reports checked out how heavily

mutual funds are invested in the stock.

Rambus was soaring after

Morgan Stanley Dean Witter

raised it to strong buy from outperform. The stock was up 21 to 78.

Xerox was down 4 3/16 to 21 1/8 after it announced early this morning that it expects to miss earnings forecasts.

Lehman Brothers edged down 1/4 to 89 1/4 after it rolled out second-quarter earnings far above forecasts of $2.78 per share, versus the


consensus estimate of $2.49 per share and the previous quarter's $2.09 per share.

Circuit City

(CC) - Get Report

, meanwhile, was unchanged after announcing it met first-quarter earnings estimates this morning.

recently wrote about the quarter's

corporate earnings and the Fed's

interest rate plans.


Treasuries leapt higher after the 8:30 a.m. EDT release of the May

housing starts

report, which was significantly weaker than expected.

The bond market is hungry for indications of slowing economic activity because of the possibility that continued above-trend growth will lead to higher inflation, which hurts bond prices.

In addition to the lower-than-expected number of housing starts (1.592 million, the lowest since June 1999, vs. a consensus forecast of 1.624 million), building-permit issuance, a predictor of future housing starts, also fell sharply. The May permit-issuance pace of 1.492 million was the lowest since December 1997.

The benchmark 10-year Treasury note was lately up 12/32 at 103 22/32, dropping its yield to 5.990.

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European markets were sluggish and mixed at

midsession, with only London gaining ground.

The Paris


was 16.19 lower, or 0.25%, to 6496.79, while Frankfurt's

Xetra Dax

was down 34.66, or 0.47%, to 7293.96.

Across the channel, London's


was up 22.8, or 0.35%, to 6513.6.

The euro was lately trading back up at $0.9562.

Asian markets were mixed overnight.

Hong Kong's

Hang Seng

index continued to rise on optimism about a comeback in real estate prices and closed up 354.04, or 2.20%, to 16,434.38.

In Tokyo trading, the

Nikkei 225

index continued to slide, off 20.39, or 0.12%, to 16,318.31.

The greenback was trading slightly higher, recently fetching 106.42 yen.

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