"El foldo" is how one trader described the action in the bond market today. The latest tumble in fixed-income sent techs stocks reeling, but blue-chip averages acted like

Weebles

: They wobbled but didn't fall down.

Amid reports of heavy program buying, the

Dow Jones Industrial Average

pushed into positive territory in the final hour of session before reversing again to close with a very modest loss.

But selling was the watchword today and there was little solace for bond market bulls as inflation worries were fanned by

Federal Reserve

Chairman

Alan Greenspan's

speech this morning. As he is wont to do, the chairman straddled both sides of the inflation-vs.-none debate. But an already nervous and jerky bond market focused mainly on his statements to the former. Paramount among them:

The performance of the American economy over the past seven years has been truly phenomenal. The breadth of technological advance and its application has engendered a major upward revaluation of business assets, both real and intangible. That revaluation has induced a spectacular rise in equity prices that to many has reached well beyond the justifiable. Of most concern is how long this remarkable period of prosperity can be extended. As I have said on previous occasions, there are imbalances in our expansion that, unless redressed, will bring this long run of strong growth and low inflation to a close.

In reaction, the price of the 30-year Treasury bond fell 1 5/32 to 92 11/32, its yield rising to 5.79%. That's its highest level since early June.

With bonds reeling, stocks went on the defensive. Tech stocks sporting (still) high price-to-earnings ratios were particularly vulnerable to the selloff in bonds.

The

Nasdaq Composite Index

fell as low as 2464.57 before closing off 62.17, or 2.4%, to 2472.28.

The index was pressured by bellwethers such as

MCI WorldCom

(WCOM)

,

Cisco

(CSCO) - Get Report

and

Intel

(INTC) - Get Report

; the

Nasdaq 100

shed 3.5%. The

Philadelphia Stock Exchange Semiconductor Index

shed 3.9% while the

Morgan Stanley High-Tech 35

lost 3.1%.

Meawhile, Internet stocks -- they of the extraordinarily high or incalculable P/Es -- stumbled as well.

TheStreet.com Internet Sector

index fell 25.69, or 4%, to 611.80.

Among Net leadership,

Amazon.com

(AMZN) - Get Report

fell a further 6.4% and

America Online

(AOL)

slid 7.5%, while online brokerages

E*Trade

(EGRP)

and

Ameritrade

(AMTD) - Get Report

fell 6.5% and 9.2%, respectively.

Online brokers mirrored the activity in most financial stocks today, which reacted to the aforementioned bond market rout. The

Philadelphia Stock Exchange/KBW Bank Index

fell 2% while the

American Stock Exchange Broker/Dealer Index

lost 2.5%.

Weakness in financial components --

J.P. Morgan

(JPM) - Get Report

, and

Citigroup

(C) - Get Report

-- helped send the Dow industrials down as low as 10,852.32 intraday. But the index rallied dramatically to finish down 8.59, or 0.1%, to 10,946.82.

Helping avert a wider loss were

Alcoa

(AA) - Get Report

, up 5.9%, and

Johnson & Johnson

(JNJ) - Get Report

, up 3.8%. Moreover,

AT&T

(T) - Get Report

climbed 8.8% amid the continuing fallout from its victory in the

MediaOne

(UMG)

takeover saga.

In addition to the financials, the Dow was weighed down by weakness in tech components

IBM

(IBM) - Get Report

and

Hewlett-Packard

(HWP)

, as well as

Chevron

(CHV)

,

Exxon

(XON) - Get Report

and

Wal-Mart

(WMT) - Get Report

.

Both energy and retailing stocks were weak overall, the former due to a 71-cent decline in crude prices; the latter amid weaker-than-expected sale-store sales figures. The

American Stock Exchange Oil & Gas Index

lost 1.2% and

Philadelphia Stock Exchange Oil Service Index

shed 3.4%, while the

American Stock Exchange Retailing Index

lost 2.5%. In the retailing segment,

Gap

(GPS) - Get Report

was a big disappointment, falling 7.4%.

Sabotaged by all of the above, the

S&P 500

fell as low as 1322.56 before closing down 15.26, or 1.1%, to 1332.05. The

Russell 2000

slid 0.89, or 0.2%, to 433.38.

"The market acts pretty rational, all things being equal," said Robert Harrington, co-head of block trading at

PaineWebber

. "Money is coming out of higher-P/E stocks and going into cyclicals. Today was a continuation of that theme. On a valuation basis, that's smart if the economy is going to continue to be strong."

Harrington acknowledged the Dow's rally -- much like yesterday's comeback -- occurred after the bond futures market closed at 3 p.m. EDT. In addition to program buying, it could have been fostered by "people closing out some positions before the employment numbers," he said. "The market is anticipating a bad number, so people might have been buying at the end of the day" to cover in the event the data proves weaker-than-expected.

Like most, the trader said the employment data is key to the market's short-term outlook. "If we get another strong employment report, even if the Fed doesn't raise rates, the bonds will do it themselves."

In

New York Stock Exchange

trading, 879.1 million shares were exchanged while losers edged gainers 1,482 to 1,476. In

Nasdaq Stock Market

activity, 915.2 million shares were exchanged while declining issues led 2,062 to 1,920. New 52-week highs led new lows 86 to 26 on the Big Board and by 68 to 36 in over-the-counter trading.

No Chutzpah for Tech

"The macro trend is still in place as the market continues to rather swiftly move away from growth into value," said Brian Belski, chief investment strategist at

George K. Baum

in Kansas City, Mo. "It's evidenced today with the Nasdaq and S&P leading the downside in terms of relative performance vs. the Dow and vs. small-caps."

Belski noted the

S&P Growth Index

fell 1.7% today vs. a 0.5% decline for the

S&P Value Index

.

The strategist foresees the trend continuing in the next four to eight weeks, with the Nasdaq potentially retesting 2200 and the S&P 500 sliding back into the 1225 to 1250 area, or approximately 17% and 10%, respectively, from all-time highs. Meanwhile, he sees the Dow and Russell each sliding 7% to 8% from recent bests.

Belski expects "some bounces

in growth stocks, but you're seeing a pattern of bounces becoming fewer and far between and lacking chutzpah, as you say in New York, compared to more recent and glorified rallies."

Among other indices, the

Dow Jones Transportation Average

rose 0.52, or 0.01%, to 3735.78 after trading as low as 3682.84; the

Dow Jones Utility Average

dipped 0.09, or 0.03%, to 314.78; and the

American Stock Exchange Composite Index

rose 2.32, or 0.3%, to 787.81.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

slid 34.32, or 0.5%, to 6989.30 and the

Mexican Stock Exchange IPC Index

soared 241.84, or 4.4% to an all-time high of 5802.47.

Thursday'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.

)

Following its rally yesterday, AT&T rung up 5, or 8.8%, to 61 15/16 -- off an earlier session high of 63 -- on news of a $5 billion investment from

Microsoft

(MSFT) - Get Report

. Mister Softee, which lost 1 1/8 to 77 15/16, will buy preferred convertible AT&T stock in exchange for which Telephone has pledged to increase its use of the Windows operating system in its TV set-top cable boxes. Microsoft also will buy MediaOne's 29.9% stake in U.K. cable firm

Telewest Communications

(TWSTY)

, which climbed 6 1/4, or 15.1%, to 47 7/8. (

TheStreet.com

took a detailed look at the developments in a

story today.)

Yesterday, AT&T struck a deal with

Comcast

(CMCSA) - Get Report

, paving the way for Telephone to acquire MediaOne. Today, AT&T and MediaOne signed a definitive agreement. MediaOne ended the day up 2 1/4 at 79 1/8 after

Salomon Smith Barney

cut it to neutral from buy.

Several retailing stocks were punished after posting somewhat lackluster April same-store sales; companies blamed the early Easter holiday, which was included in March sales. Among those that posted monthly same-store reports:

  • AnnTaylor (ANN) lost 3/4 to 49 despite sales up 10.3%.
  • Bon-Ton Stores (BONT) lost 1/8 to 6 5/16 on sales down 2.7%.
  • Bradlees (BRAD) lost 19/32, or 6%, to 9 9/32 despite sales up 7.8%.
  • Braun's Fashions (BFCI) rose 15/16, or 9.7%, to 10 9/16 on sales up 11%.
  • Children's Place (PLCE) - Get Report rose 4 5/8, or 11.8%, to an all-time high of 44 on sales up 32% for the entire first quarter.
  • Claire's Stores (CLE) rose 5/8 to 32 on sales up 5%.
  • Dayton Hudson (DH) lost 1 7/16 to 63 11/16 on sales down 1.3%.
  • Gap lost 5 1/8, or 7.4%, to 64 1/4 on sales up only 1%.
  • Kmart (KM) rose 1 1/4, or 7.8%, to 17 5/16 on sales up 5.7%.
  • Men's Wearhouse (SUIT) closed unchanged at 27 1/2 on sales up 2%.
  • Michaels Stores (MIKE) rose 7/16 to 23 1/8 on sales up 2%.
  • Neiman-Marcus (NMG) rose 1 7/16, or 5.9%, to 25 5/8 on sales up 13.6%.
  • Pacific Sunwear (PSUN) lost 1 11/16 to 35 5/16 despite sales up 5.9%.
  • Ross Stores (ROST) - Get Report lost 3/4 to 46 3/8 despite sales up 3%. Ross also said it expects to report first-quarter earnings of 71 cents to 73 cents a share, topping the 11-analyst estimate of 68 cents and the year-ago 57 cents.
  • United Retail Group (URGI) rose 1/16 to 11 1/16 on sales up 3%.
  • Value City (VCD) closed flat at 8 15/16 on sales down 4.2%.
  • Wal-Mart lost 2 3/16 to 42 7/8 despite sales up 4.6%.
  • West Marine (WMAR) rose 1 7/16, or 13.5%, to 12 1/8 on sales up 2.2%.

Mergers, acquisitions and joint ventures

Engineering and consulting company

Dames & Moore

(DM)

jumped 3 1/8, or 25.4%, to an annual high of 15 7/16 after construction and planning firm

URS

(URS)

last night announced plans to buy the company for $300 million in cash, or $16 a share. URS rose 1/8 to 23 5/8.

Lockheed Martin

(LMT) - Get Report

added 1/4 to 44 3/8 after agreeing to join

TRW

(TRW)

and

Telecom Italia

(TI)

to create a $3.6 billion global, satellite-based broadband service provider.

Shelby Williams

(SY) - Get Report

shot up 2 1/4, or 16.4%, to an annual high of 16 after

Falcon Products

(FCP)

agreed to buy the company for $148 million. Falcon swelled 1 13/16, or 22.7%, to 9 13/16.

State Street

(STT) - Get Report

grew 3 1/16 to 86 9/16 after

Royal Bank Of Scotland

said its Citizens Financial Group subsidiary agreed to acquire a major part State Street's commercial banking business.

Earnings/revenue reports and previews

Equitable

(EQ) - Get Report

slid 1 3/8 to 62 3/16 after reporting first-quarter earnings of $1 a share, 5 cents ahead of the 10-analyst estimate and up from the year-ago 92 cents.

HCR Manor Care

(HCR) - Get Report

tumbled 3 1/16, or 11.3%, to 24 after posting first-quarter earnings of 43 cents a share, 2 cents below the 13-analyst estimate but up from the year-ago 38 cents.

Macromedia

(MACR)

leapt 1 5/8 to 38 3/4 after the design software firm last night announced fourth-quarter earnings of 16 cents a share, beating analysts' expectations by 3 cents.

Newmont Mining

(NEM) - Get Report

excelled 3/8 to 26 1/16 after posting first-quarter earnings of 8 cents a share, 2 cents higher than the 14-analyst outlook but behind the year-ago 20 cents.

Restoration Hardware

(RSTO)

plunged 1 1/4, or 8.9%, to 12 7/8 after warning it expects to report a first-quarter loss of 14 cents to 18 cents a share. The nine-analyst estimate called for a loss of 6 cents vs. the year-earlier loss of 5 cents. The company said it is unable to immediately meet all of its customer demand for the first quarter and that it expects second-quarter gross margins to suffer as a result.

Royal Dutch Petroleum

(RD)

surged 1 11/16 to an all-time high of 60 15/16 after saying its first-quarter net income fell to $1.61 billion from $1.95 billion, blaming lower crude oil prices and reduced margins from the company's chemical and refining operations. Still, the figure beat analysts' forecasts for $975 million to $1.2 billion.

Seagram

(VO) - Get Report

lifted 13/16 to 59 3/4 after reporting a third-quarter loss of 50 cents a share, 4 cents better than the eight-analyst forecast but wider than the year-ago loss of 6 cents.

Morgan Stanley Dean Witter

resumed coverage of the stock with an outperform rating.

United HealthCare

(UNH) - Get Report

shaved off 2 1/8 to 58 3/8 after it posted first-quarter earnings of 72 cents a share, 3 cents above the 16-analyst consensus and up from the year-ago 63 cents.

Waste Management

(WMI)

gave up 2 11/16 to 54 11/16 after disappointing investors with first-quarter earnings of 61 cents a share, a penny down from the 13-analyst call but up from last year's 34 cents.

Watson Pharmaceuticals

(WPI)

dropped 1 3/4 to 38 5/8 after reporting first-quarter earnings of 41 cents a share, in line with the eight-analyst forecast and up from the previous year's 33 cents.

Offerings and stock actions

Gemcast International

(GMST)

climbed 6 3/16, or 5.6%, to 116 3/8 as it approaches its 2-for-1 split distribution May 14.

Maryland-based broadcaster

Radio One

(ROIA:Nasdaq) soared 10 5/8, or 44.3%, to 34 5/8 in its first day of trading.

Qwest Communications

(QWST)

advanced 4 15/16, or 5.9%, to 88 11/16 after shareholders approved a 2-for-1 stock split.

Viacom

(VIA) - Get Report

slipped 1/8 to 41 3/4 after saying its

Blockbuster

unit filed for an IPO.

Analyst actions

CIT Group

(CIT) - Get Report

sank 3, or 9.4%, to 29 after

BT Alex. Brown

dropped it to market perform from buy.

Gentex

(GNTX) - Get Report

sliced off 1 7/16, or 5%, to 27 15/16 after

Prudential Securities

upped its price target for the stock to 35 a share from 30.

Mills

(MLS)

picked up 13/16 to 21 3/16 after

Merrill Lynch

lifted it to near-term buy from neutral and to long-term buy from accumulate.

St. Paul

(SPC)

flew 1 5/8, or 5.4%, to 31 5/8 after Merrill Lynch pushed it up to near-term accumulate from neutral.

Stone & Webster

(SW)

surged 1 3/4, or 7.7%, to 24 5/8 after

Credit Suisse First Boston

initiated coverage with a buy and set a 12-month price target of 35 a share.

Miscellany

Cabletron Systems

(CS) - Get Report

spiked up 2 1/16, or 22.8%, to 11 1/8 on word it's considering selling or spinning off some parts of its business.

General Motors

(GM) - Get Report

shed 1 9/16 to 85 3/8 after saying its

Cadillac

division sold 4,773 fewer cars in December than it had reported, meaning

Ford's

(F) - Get Report

Lincoln

division was indeed the top seller among U.S. luxury marquees in 1998. Lincoln topped Cadillac for the first time since 1939. Ford gave up 1 7/8 to 62 1/2.

Grupo Televisa

(TV) - Get Report

vaulted 5, or 11.7%, to 47 3/4 after Grupo Televicentro, its controlling shareholder, completed a capital stock restructuring.

Heinz

(HNZ)

tacked on 1/2 to 49 3/16 after saying it expects the first phase of its previously announced restructuring plan to result in savings of $50 million in fiscal 2000, $100 million in 2001 and $150 million in 2002.

National Semiconductor

(NSM)

gained 2 3/16, or 12.4%, to 19 7/8 following yesterday's news it will leave the PC microprocessor business and focus instead on its core analog chip business and on chips for smart appliances. Today, the following firms upgraded the stock, each to buy:

BancBoston Robertson Stephens

promoted it from long-term attractive,

Donaldson Lufkin & Jenrette

boosted it from market perform and

Gruntal

lifted it from hold.