More evidence (as if any more was needed) of economic strength in the U.S. sent the bond market tumbling, as stocks slumped, with the heaviest percentage loss suffered so far by the

S&P 500


The 30-year Treasury bond was down 1 9/32 to 93 29/32, yielding 5.68%.


National Association of Purchasing Management

said its

Purchasing Managers Index

jumped to 52.4 in February, stronger than the 50 reading projected by economists according to a


poll, as economic activity in the manufacturing sector jumped following eight months of decline. In January, the index came in at 49.5. A reading above 50 indicates that the manufacturing economy is generally expanding, while a reading below 50 indicates that it is generally contracting.

The S&P 500 was down 16 to 1223.


Dow Jones Industrial Average

was down 71 to 9235. The

Russell 2000

was down 1 to 391. Internet Sector

was down 6 to 505. E-Commerce Index

was down 2 to 95.


Nasdaq Composite Index

was down 20 to 2268. Chip titan


(INTC) - Get Report

was down 4 9/16 to 115 7/16 after a downgrade from

Donaldson Lufkin & Jenrette

, which cut its rating on Intel to market perform from buy. Intel was most active on the

Nasdaq Stock Market

with 11 million shares traded.

Brokerage stocks gained on positive comments on the industry coming out of DLJ. However, some of the sector's gains have eroded. DLJ also upgraded

Lehman Brothers


to buy from market perform.

Speaking of Lehman, the firm's chief investment strategist, Jeffrey Applegate, boosted his S&P 500 index target to 1350 from 1325. He also raised his earnings per share estimate for the S&P 500 to $47.50 from $47.

On the

New York Stock Exchange

, decliners were beating advancers 1,489 to 1,005 on 194 million shares. On the Nasdaq, losers were beating winners 1,809 to 1,315 on 218 million shares.

On the NYSE, 45 issues had set new 52-week lows while 6 had touched new highs. On the Nasdaq, 28 issues had set new lows while new highs totaled 25.

Elsewhere on the economic front, construction spending rose 1.6% in January, up from a revised reading of 1.4% in December, the

Commerce Department

reported. The data was much stronger than the 0.4% gain economists expected.

On the Big Board,



was most active with 16 million shares changing hands. It was down 2 1/8, or 6%, to 33 1/4, continuing its recent decline.

Online trading at

Charles Schwab


was down Monday morning for the second time is less than a week. Customers were unable to trade through the Web from about 10 a.m. EST to about 10:20, according to a Schwab spokeswoman. The No. 1 online broker by online transactions also suffered an hour-long breach in Web trading

last Wednesday. While Schwab is still investigating the source of the problem, a spokeswoman says it could be related to the system enhancements Schwab is making. The Wednesday outage was related to the installation of a new mainframe computer. In the industry, it is not uncommon for

glitches to affect brokers as they try to make changes to their systems on the fly. Schwab was down 2 1/2 to 72 1/16.


Amy Olmstead

9:56 a.m.: Stocks Mostly Lower as Treasuries Tumble

Stocks were mostly lower early on as bonds tumbled after rallying



Donaldson Lufkin & Jenrette

downgraded chip titan


(INTC) - Get Report

to market perform from buy.


Dow Jones Industrial Average

was up 7 to 9313. The

S&P 500

was down 4 to 1235.


Nasdaq Composite Index

was down 10 to 2279. The

Russell 2000

was up fractionally at 393. Internet Sector

was down 2 to 508. E-Commerce Index

was down fractionally at 97.

The 30-year Treasury bond was down 26/32 to 94 15/32, yielding 5.65%.

On the economic front, the

National Association of Purchasing Management

will release its

Purchasing Managers Index

at 10 a.m. EST.

Most Up at Open -- NYSE

Hertz (HRZ) , up 1 15/16 to 41 3/4


Most Up at Open -- Nasdaq

North Face (TNFI) , up 3 1/8 to 16

: The company said its board of directors approved an agreement covering a recapitalization, resulting in CEO James Fifield and

Leonard Green & Partners

acquiring North Face for $17 cash per share.

Most Down at Open -- NYSE

STMicroelectronics (STM) - Get Report, down 3 3/8 to 84


Most Down at Open -- Nasdaq

eBay (EBAY) - Get Report, down 7 1/4 to 326 3/4

: The government Jan. 29 asked the online auctioneer for information relating to an investigation of possible illegal transactions in connection with eBay's Web site. eBay said it is fully cooperating with the inquiry.