The stock market continues to wallow in the muck of the bond market's festering wounds and a general malaise among buyers (and would-be buyers). Major indices again struggled to find equilibrium but enjoyed a bit of a bounce toward the close, with broader averages faring best.

Yesterday's postclose profit warning by

3Com

(COMS)

and its subsequent statement that its problems are

not

3Com-specific kept pressure on tech averages for much of the session. But some positive analyst commentary regarding

Intel

(INTC) - Get Report

and strength among fellow tech bellwethers

Dell

(DELL) - Get Report

and

Sun Microsystems

(SUNW) - Get Report

reinvigorated the sector (for one afternoon, at least).

The

Nasdaq Composite Index

rose as high as 2280.79 early on but soon reverted to its recent slumping form. The tech-bedraggled index fell as low as 2239.03 before pushing higher toward the close to finish up 6.17, or 0.3%, to 2265.20.

3Com led big-cap decliners again, falling 9%. But Intel rose 4.5%, Dell gained 3.7% and Sun rose 3.5% to offset the damage; the

Nasdaq 100

rose 0.6%.

With Intel and

Texas Instruments

(TXN) - Get Report

leading the way, the

Philadelphia Stock Exchange Semiconductor Index

rose 1.8%.

Morgan Stanley Dean Witter

reiterated its strong buy rating on Intel while

Prudential Securities

and

BancBoston Robertson Stephens

made positive comments about the chip giant. Morgan also upped ratings on three analog chip makers --

Maxim Integrated Products

(MXIM) - Get Report

,

Linear Technology

(LLTC)

and

Burr-Brown

(BBRC)

.

The sector was further enlivened by

The Wall Street Journal's

report that

Philips Electronics

(PHG) - Get Report

is preparing a full-blown proxy fight if

VLSI

(VLSI)

won't enter friendly negotiations.

The chip and equipment group's rebound was offset by a modest reversal for Internet stocks.

TheStreet.com Internet Sector

index fell 6.63, or 1.3%, to 521.13 while

TheStreet.com E-Commerce Index

slid 0.91, or 0.9%, to 95.99.

The

Dow Jones Industrial Average

, meanwhile, was stymied by renewed bond market weakness and the equity market's general malaise. The Dow rose as high as 9337 in its initial move but slipped as low as 9221.82, around 3 p.m. EST. The blue-chip proxy then slowly began climbing back toward break-even, finishing down 21.73, or 0.2%, to 9275.88.

American Express

(AXP) - Get Report

was the Dow's biggest negative influence while

Chevron

(CHV)

led gainers.

The

S&P 500

closed up 2.20, or 0.2%, to 1227.70, after trading as high as 1231.69 and as low as 1218.57. Small-caps could not stretch their recent run of outperformance; the

Russell 2000

closed down 2.48, or 0.6%, to 391.95.

"I don't know what the reversal was, but I think there was some buy programs at the close," said Jim Volk, co-director of institutional trading at

D.A. Davidson

in Portland, Ore. "There was no real news. But big players are on the sidelines. You can see that by the very light volume."

Volk said the news items trades were focused on -- "spooked by," actually -- were Japan's comments about reflating itself, plus

Federal Reserve

Chairman

Alan Greenspan's

testimony that bond yields would go higher if Social Security funds were invested in the equity market, because funds would be siphoned away from fixed-income.

Regardless of the modest comeback, major averages are "precariously holding above short-term resistance levels," the trader observed. "People are waiting to see if there's any conviction or if they break down from here."

Volk's desk had "constant order flow," but "it's been considerably quiet over the last week-and-a-half," he said. "And it's not just here. I'm talking to major research houses and other regional firms that are pretty quiet, too."

In NYSE trading, 751.7 million shares traded while declining stocks led advancers 1,635 to 1,303. In

Nasdaq Stock Market

activity, 869.1 million shares were exchanged while losers led 2,332 to 1,557. New 52-week lows led new highs 95 to 25 on the Big Board and by 104 to 31 in over-the-counter trading.

Every Day ... Churn, Churn, Churn

The recent activity in major averages may not phase the average investor, but many market players say tension is building.

"Very simply, it looks like interest rates are going higher based on the fact the utility average broke down in January, and that is the greatest forecaster of higher interest rates," said Gary Kaltbaum, chief technical analyst at

J.W. Genesis Securities

in Boca Raton, Fla. "The market has to deal with the fact interest rates are going to stay up. People are saying we're going to come right back down, but you don't go from 5% to 5.6% without knowing there's a significant change."

Today, the price of the 30-year Treasury bond fell 1 2/32 to 93 20/32, its yield rising to 5.69%, its highest level since July 31.

A long-bond yield of 6% "looks like a lock," Kaltbaum continued. "Without a doubt that can affect the market. I'm surprised the market has held up as well as it had. It's amazing, given what's happening" with both tech stocks and bonds.

The fact market sentiment is turning more negative could prove a saving grace, he said, "but we're on the cusp. If these levels don't hold, it could be very nasty and the odds favor you don't hold."

Specifically, 1210, 9085 and 388 represent key support levels for the S&P, the Dow and the Russell 2000, respectively, the technician said. Because of its "parabolic move up" off the October lows, there is no comparative figure for the Nasdaq, he said.

"The next few days are going to be very important. This looks just like July again except interest rates are going up, not down, and that could put the nail in the coffin," Kaltbaum said, citing a litany of technical woes, including market breadth returning to lows of last August/September. "We're getting all the same activity as then, the average stock was going down while the big indices held up. Then one day, they went 'boom.'"

Do you hear something ticking?

Among other indices, the

Dow Jones Transportation Average

fell 30.37, or 0.9%, to 3248.69; the

Dow Jones Utility Average

rose 2.25, or 0.8%, to 292.97; and the

American Stock Exchange Composite Index

shed 4.76, or 0.7%, to 694.45.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

fell 44.85, or 0.7%, to 6180.34 and the

Mexican Stock Exchange IPC Index

slumped 59.27, or 1.4%, to 4127.38.

Wednesday's Company Report

By Heather Moore
Staff Reporter

(

Earnings estimates from First Call; new highs and lows on a closing basis unless otherwise specified. Earnings reported on a diluted basis unless otherwise specified.

)

As noted above, 3Com, maker of the

Palm Pilot

handheld computer, stumbled down 2 7/16, or 9.1%, to 24 9/16, off its session low of 22 3/4, after

late yesterday warning it sees third-quarter operating earnings of 23 cents a share because of seasonal weakness and a slowdown in U.S. and Latin American markets. The 26-analyst outlook called for the network equipment maker to earn 36 cents.

Credit Suisse First Boston

downgraded the stock to buy from strong buy, Morgan Stanley Dean Witter lowered it to neutral from outperform and

BT Alex. Brown

cut it to market perform from buy. Electronics contract manufacturer

Jabil Circuit

(JBL) - Get Report

, of whom 3Com is a customer, lowered 1 to 30 3/4 in sympathy.

Mergers, acquisitions and joint ventures

Alcatel

(ALA)

hopped 2 1/4, or 10.3%, to 24 1/8 after agreeing with

Dialogic

(DLGC)

to develop telephony and Internet server technologies. Dialogic rose 1 7/8, or 5.6%, to 35 13/16.

Architel Systems

(ASYCF)

shot up 4 1/16, or 26.2%, to an all-time high of 19 11/16 after agreeing to be acquired by Canada's

Amdocs

(DOX) - Get Report

in a stock deal valued at $400 million. Amdocs skidded 3 5/8, or 14%, to 22 3/16.

Concentra Managed Care

(CCMC)

soared 3 3/16, or 27.7%, to 14 11/16 after agreeing to a merge with privately owned

Yankee Acquisition

. The roughly $1.1 billion deal includes $328 million of debt assumption and the right of all but 7% of Concentra's shareholders to receive $16.50 cash a share.

Jones Apparel

(JNY)

slipped 3 3/16, or 12.3%, to 22 3/4 after confirming it is buying

Nine West Group

(NIN)

for $885 million in cash and stock, plus $515 million in debt assumption. Morgan Stanley Dean Witter cut its recommendation on Jones Apparel to outperform from strong buy. Nine West kicked up 1/16 to 22 7/8.

Monsanto

(MTC) - Get Report

expanded 2 5/8, or 5.9%, to 47 after

The New York Times

reported it is in merger negotiations with Dow member

DuPont

(DD) - Get Report

. DuPont lost 1 1/16 to an annual low of 50 1/4.

VLSI grew 3/4 to 17 3/8 after

The Wall Street Journal

reported Philips Electronics is preparing a full-blown proxy fight if the chipmaker won't enter friendly negotiations. Philips, which added 3/16 to 68 1/2, made a $17 a share offer for VLSI Friday.

Earnings/revenue reports and previews

Cyberian Outpost

(COOL)

vaulted 6 3/8, or 39.5%, to 22 1/2 after forecasting fourth-quarter revenue of $33 million, up 307% from the year-ago period and up 40% vs. the third quarter.

Kmart

(KM)

slipped 3/16 to 17 1/2 even after recording fourth-quarter earnings of 65 cents a share, 4 cents ahead of the 16-analyst view and above the year-ago 50 cents.

Maxxim Medical

(MAM)

tumbled 3 11/16, or 17.9%, to 16 15/16 after posting first-quarter earnings of 40 cents, up from the year-ago 37 cents but shy of the three-analyst view of 42 cents.

Microtest

(MTST)

declined 5/8, or 21.7%, to 2 3/8 after recording a fourth-quarter loss of 12 cents a share, including one-time items. The three-analyst estimate called for earnings of 6 cents vs. the year-ago profit of a dime. The company also said it will restate downward earnings for the first three quarters of 1998 to correct errors identified during the year-end audit process.

Modtech Holdings

(MODTD)

plunged 5, or 35.1%, to an annual low of 9 5/16 after last night posting fourth-quarter earnings 12 cents a share below year-ago levels. Also contributing to investors' concerns was Modtech's lack of information about the financial terms of its recent merger with

SPI Manufacturing

.

Pacific Gateway Exchange

(PGEX)

lifted 2 11/16, or 12.1%, to 24 15/16 after reporting fourth-quarter earnings of 25 cents a share, a penny ahead of the 11-analyst consensus and up from 19 cents a year ago.

Pacific Sunwear

(PSUN)

advanced 2 1/16, or 6.9%, to 32 1/16 after posting fourth-quarter profits of 36 cents a share, 2 cents ahead of the 13-analyst view and up from 31 cents a year ago. BT Alex. Brown upped its recommendation to strong buy from buy.

Pall

(PLL) - Get Report

sliced off 4 13/16, or 22.6%, to an annual low of 16 1/2 after it reported second-quarter earnings of 15 cents a share, 4 cents short of the eight-analyst outlook and below the year-ago 18 cents. The company said it sees full-year earnings about 10% to 15% below last year's 92 cents a share and that it will take an unspecified third-quarter restructuring charge. Analysts called for 1999 earnings of $1.02.

Payless ShoeSource

(PSS)

gave up 4 3/4, or 8.6%, to 50 5/8 after reporting its February same-store sales fell 4.5%. Most retailers will post sales figures tomorrow.

StaffMark

(STAF) - Get Report

plummeted 4 5/16, or 34.9%, to an all-time low of 8 1/8 after warning its first-quarter and full-year earnings will not meet expectations. The 10-analyst views are currently for earnings of 35 a share in the first quarter and $1.89 a share for all of 1999.

Lehman Brothers

cut its recommendation to neutral from buy.

Symons International

(SIGC)

dwindled 1 5/16, or 24.7%, to an all-time low of 4 1/8 after reporting a fourth-quarter loss of $1.08 a share, well in excess of the lone-analyst prediction of a 28 cent shortfall and reversing a profit of 7 cents a share a year prior.

TMP Worldwide

(TMPW)

slid 3 7/8, or 6.8%, to 53 1/2 after reporting fourth-quarter earnings of 14 cents a share. The results beat the eight-analyst consensus of 12 cents but fell well short of year-ago results of 38 cents.

Veritas

(VTS)

lost 1 1/4, or 12.3%, to 8 15/16 despite reporting second-quarter profits of 24 cents a share, 4 cents ahead of the 11-analyst view but down from 76 cents a year earlier. The company said fiscal second-half earnings will be "nominal."

Wall Data

(WALL)

tanked 4 13/16, or 25%, to 14 1/2 after restating its third-quarter revenue figure, lowering it by $1.2 million. The company said the translation of a $1.2 million purchase order from its German unit was misinterpreted.

In other earnings news:

Analyst actions

Adaptec

(ADPT) - Get Report

jumped 1 1/8, or 5.7%, to 21 after BancBoston Robertson Stephens raised its fourth-quarter earnings estimate for the company to 30 cents a share from 28 cents.

Intel popped up 4 15/16 to 114 11/16 after Morgan Stanley Dean Witter reiterated a strong buy on the chip maker, saying the stock is attractively priced because it's down around 23% from its Jan. 20 all-time high.

Manhattan Associates

(MANH) - Get Report

sank 6 15/16, or 43.7%, to 9 after

J.C. Bradford

dropped it to neutral from buy, citing concerns about the software maker's performance in the current quarter.

Maxim excelled 2 1/8, or 5.2%, to 43 after Morgan Stanley Dean Witter upped it to strong buy from outperform.

Smith-Gardner

(SGAI)

climbed 1, or 8.3%, to 13 1/8 after BT Alex. Brown upped it to strong buy from buy.

Miscellany

Oil drilling and services firms jumped higher after the

American Petroleum Institute

reported an unexpected decline in inventories. Gainers included

BJ Services

(BJS)

, which rose 1 1/4, or 9.3%, to 14 3/4;

Diamond Offshore

(DO) - Get Report

, which rose 1 1/2, or 7.3%, to 22;

Halliburton

(HAL) - Get Report

, which rose 1 47/64, or 6.1%, to 30 27/64; and

Smith International

(SII)

, which rose 1 11/16, or 6.7%, to 26 3/4.

CheckFree Holdings

(CKFR)

fell 3 3/8, or 8.7%, to 35 1/2 on word

Intuit

(INTU) - Get Report

filed a breach of contract suit against the company, alleging CheckFree isn't following the terms of an agreement for bill presentment. Intuit dropped 2 9/16 to 88.