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A Hearty Breakfast Fails Stocks as Energy Flags Around Midday

The CPI looked to be tasty and high in fiber, but blue-chips reverted to their Fritos-eating ways at lunchtime.

Stocks happily feasted on an inflation-friendly

Consumer Price Index

report for breakfast, but by lunch the good news was but a memory and proxies were hungrily demanding more. The rally was quickly overtaken by a recent market mainstay: fear of a potential

Fed

interest-rate increase.

The

Dow Jones Industrial Average

jumped more than 100 points at the open, quickly passing 11,000 after core CPI numbers came in weaker than expected. The headline CPI gained 0.3% overall, in line with the consensus estimate in the

Reuters

poll, while the core rate, which excludes food and energy prices, gained 0.1%.

But the optimism was short-lived as investors quickly came back to Earth and refocused their attention on the bigger picture, including a recently skittish market. After a dive into negative territory, the Dow was lately edging up 9.82 to 10,920. "The rally was more an emotional one," said Jim Herrick, managing director of equity trading at

Robert W. Baird

in Milwaukee. "Now that this number is out of the way, we're already on to the next number. It just indicates the market is still skittish and in a trading range."

The

Nasdaq Composite Index

was taking its lumps, down 22.72, or 0.8%, to 2845, about even with yesterday's closing gain. "People are taking a little bit off the table on some of these pretty strong stocks," said Brian Belski, chief investment strategist at

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George K. Baum

in Kansas City, Mo. "The weakness in Nasdaq has been increasing and there has been some early profit-taking over the last few days," Belski said, as people realize the

Nasdaq Stock Market's

internal readings are weak or ambiguous.

Financials, which theoretically should have been enjoying a pretty good day, were largely unmoved with the exception of

J.P. Morgan

(JPM) - Get JPMorgan Chase & Co. Report

, up 2 1/2, or 2.1%, to 124 1/2. Meanwhile,

Citigroup

(C) - Get Citigroup Inc. Report

and

American Express

(AXP) - Get American Express Company Report

barely budged. Citigroup was down 1/4 to 42 13/16, while American Express climbed 3/4 to 140 1/8.

Oil stocks were trending down again as a result of profit-taking, with the

American Stock Exchange Oil & Gas Index

down 5.38, or 1%, to 528.02 and the

Philadelphia Stock Exchange Oil Service Index

up fractionally to 86.84.

Atlantic Richfield

(ARC) - Get ARC Document Solutions, Inc. Report

was off 1 13/16, or 2%, to 88.

Investors can expect more volatile fun and games this week, ahead of Friday's triple-witching, the quarterly expiration of stock options, stock index options and stock index futures, which usually throws a few curveballs at major proxies. "Riding out this week is going to be interesting. The action has gotten more rampant toward the middle of the week" instead of just at the end, said Belski.

On the

New York Stock Exchange

, decliners were leading advancers 1,379 to 1,337 on 417 million shares, while Nasdaq laggards were beating leaders 1,802 to 1,624 on 564 million shares. New lows were leading new highs 96 to 37 on the Big Board, and Nasdaq's new highs led new lows 84 to 43.

The

S&P 500

was down 2.86 to 1333, and the

Russell 2000

was down 0.14 to 438.1

The benchmark 30-year Treasury was up 8/32 to 100 10/32, its yield at 6.1%.

Wednesday's Midday Watchlist

By Tara Murphy
Staff Reporter

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified

.)

Mergers, Acquisitions and Joint Ventures

Autocam

(ACAM) - Get Acamar Partners Acquisition Corp. Class A Report

was hopping 2 3/4, or 18.3%, to 17 3/4 after it said it is negotiating a possible $21-per-share sale of the company.

Bestfoods

(BFO) - Get BlackRock Florida Municipal 2020 Term Trust Report

was up 3 11/16, or 7.5%, to 52 5/8 after denying a report in today's editions of

The Wall Street Journal

that it was in merger talks with

Heinz

(HNZ)

. For its part, the Pittsburgh-based ketchup-and-pickles concern was up 1 3/8 to 44 9/16.

Dime Bancorp

(DME)

was up 1/8 to 17 7/8 after it agreed to merge with

Hudson United Bancorp

(HU)

. Hudson United shares were up 1/2 to 30 5/8.

Microsoft

(MSFT) - Get Microsoft Corporation Report

was slipping 1 3/4 to 933/8 after it said it plans to buy diagramming and technical drawing software maker

Visio

(VSIO)

in a stock swap valued at $1.3 billion. The deal calls for each Visio common share to be swapped for 0.45 Microsoft share. Visio was soaring 6 13/16, or 20.3%, 40 5/16.

Motorola

(MOT)

was plummeting 5 1/2, or 5.9%, to 87 5/8 after it confirmed that it will acquire

General Instrument

(GIC)

for about $11 billion in stock. The transaction calls for each General Instrument common share to be swapped for 0.575 Motorola share. Motorola expects the acquisition to "modestly dilute earnings" through 2000 but to strengthen earnings thereafter. Shares of General Instrument were sliding 2 7/16 to 48 1/16.

Friede Goldman

undefined

and

Halter Marine

(HLX) - Get Helix Energy Solutions Group, Inc. Report

disclosed late Tuesday they have amended the terms of their pending merger. Under the new terms, each Halter share will be converted to 0.57 Friede share. The original terms of the merger, announced in June, called for each Halter share to be exchanged for 0.4614 Friede share. Friede Goldman shares were off 9/16 to 11 9/16, while Halter Marine was up 1/2, or 9.3%, to 5 7/8.

Earnings/Revenue Reports and Previews

AAR

(AIR) - Get AAR CORP. Report

was up 7/8 to 21 15/16 after it reported first-quarter earnings of 39 cents, in line with the eight-analyst estimate and up from 34 cents a year ago.

Dress Barn

(DBRN)

was up 3/4 to 16 1/4 after it posted fourth-quarter earnings of 56 cents a share, beating both the three-analyst estimate of 45 cents and the year-ago 48 cents.

Fairchild

(FA)

was unchanged at 9 1/8 after it said it expects to report a first-quarter 11-cent-a-share gain on the sale of assets included in its England-based

Camloc Gas Springs

unit to

Arvin's

(ARV)

Arvin Motion Controls

division.

Latitude Communications

(LATD)

was advancing 2 13/16, or 9.9%, to 31 7/16 after it posted second-quarter earnings of 4 cents a share, beating both the three-analyst estimate of 3 cents and the year-ago 1 cent-profit.

Oracle

(ORCL) - Get Oracle Corporation Report

was declining 3 7/16, or 7.5%, to 42 after it posted first-quarter earnings of 16 cents a share, in line with the 30-analyst expectation and up from 13 cents a year ago.

Polycom

(PLCM)

was climbing 2 1/2, or 5.7%, to 46 1/2 after it posted second-quarter earnings of 20 cents a share, beating both the six-analyst estimate of 19 cents and the year-ago 10 cents.

Progress Software

(PRGS) - Get Progress Software Corporation Report

was up 5/8 to 33 3/4 after it reported third-quarter earnings of 43 cents a share, above the three-analyst estimate of 39 cents and 31 cents a year ago.

Offerings and Stock Actions

NETsilicon

(NSIL)

was leaping 6 1/16, or 86%, to 13 1/16 after making its trading debut.

CIBC Oppenheimer

priced the shares below its $8-to-$10 range at $7.

Staples

(SPLS)

was up 3/4 to 22 1/4 after it said it will issue a tracking stock for its e-commerce unit. The company also expanded its share-repurchase plan to $300 million from $200 million.

Analyst Actions

Advanced Fibre

(AFCI)

was up 1 1/2, or 7.7%, to 21 after

SG Cowen

upped its rating on the stock to a strong buy from a buy.

Aurora Biosciences

(ABSC)

was up 3 11/16, or 30.7%, to 15 7/8 after BancBoston Robertson Stephens upgraded the stock to a strong buy from a buy and set a price target of 31.

Barr Laboratories

(BRL)

was off 1 1/2 to 30 15/16 after

Banc of America Securities

sliced its fiscal 2000 earnings estimate to $2.14 a share from $2.42.

Boston Scientific

(BSX) - Get Boston Scientific Corporation Report

was sliding 6 9/16, or 18.5%, to 28 3/4 after

PaineWebber

cut the shares rating to attractive from buy and

Morgan Stanley

lowered its rating to neutral from outperform. In addition,

Lehman Brothers

sliced its rating to neutral from buy, while Banc of America Securities downgraded it to a buy from a strong buy. Yesterday, Boston Scientific said it would report third-quarter revenue of about $690 million, missing its initial estimate.

Cambridge Technologies

(CATP)

was down 1 1/2, or 10%, to 13 1/2 after Lehman Brothers cut its fiscal 2000 earnings estimate to 70 cents a share from 87 cents and lowered its price target to 22 from 25.

Crestline Capital

(CLJ)

was up 9/16 to 21 7/8 after Deutsche Bank Alex. Brown rolled out coverage of the stock with a buy rating.

Hartford Life

(HLI) - Get Houlihan Lokey, Inc. Class A Report

was up 1 1/2 to 43 7/8 after

Merrill Lynch

upped its rating to near-term accumulate from neutral.

Nationwide Financial

(NFS)

was up 7/8 to 35 3/4 after Merrill Lynch analyst Ed Spehar raised his rating to near-term accumulate from neutral.

Verity

(VRTY)

was jumping 4 1/16, or 7.1%, to 61 3/8 after Banc of America raised its fiscal 2000 earnings estimate to $1.48 from $1.24 and set a price target of 74.

Miscellany

AT&T

(T) - Get AT&T Inc. Report

was off 5/16 to 44 3/16 after it announced plans to extend broadband services to businesses.

DaimlerChrysler

(DCX)

was down 1 to 73 9/16 after it said it was hopeful it can reach a deal on a new employment pact with the

United Auto Workers

without further work stoppages in the wake of unauthorized strikes at key plants yesterday, according to a

Reuters

report.

DuPont

(DD) - Get DuPont de Nemours, Inc. Report

was off 1 7/16 to 64 3/4 after it announced plans to abandon or halt $600 million worth of ventures in the Asia-Pacific region, in an attempt to realign its nylon business. The company said it would take a third-quarter charge of 35 cents a share for its departure from the projects.

Maytag

(MYG)

was up 1 3/8 to 39 5/16 after it said it will realign its business into four operating groups: home appliances, commercial appliances, worldwide and emerging business. The company said the move would allow it to streamline decisionmaking and brand focus.

As originally published, this article contained an error. See Corrections and Clarifications.