Dow, Powered by 3M, Remains Well in Record Territory

3M

(MMM) - Get Report

was powering the

Dow Jones Industrial Average

into record territory heading into the final hour of trading, while Internet stocks tumbled.

The Dow was up 123 to 10,912. 3M was up 3 7/8 to 92 7/8.

Meanwhile,

TheStreet.com Internet Sector

index was down 23 to 633.

Jay Suskind, head of institutional equity trading at

Ryan Beck

, said for the Internet stocks, the "bloom might be off the rose" for the high-flying sector. "People aren't coming in as they used to in order to buy on the dips," he said, noting that when buyers do come in there's "a lot less intensity."

The

S&P 500

was up 5 to 1341. The

Nasdaq Composite Index

was down 25 to 2517. The

Russell 2000

was up 1 to 433.

The 30-year Treasury bond was down 3/32 to 94 1/32, yielding 5.67%.

Suskind said there's still talk in the market that the bond market is a "screaming buy" because of the fact that the economy's growth can't keep up with the steamy pace set in the first quarter. However "we'll have to wait and see."

On the

New York Stock Exchange

, advancers were beating decliners 1,857 to 1,082 on 610 million shares. On the

Nasdaq Composite Index

, winners were beating losers 1,979 to 1,909 on 669 million shares.

On the NYSE, 62 issues had set new highs 52-week while 18 had touched new lows. On the Nasdaq, 70 stocks had set new highs while 33 touched new lows.

On the Big Board,

America Online

(AOL)

was most active, with 18 million shares changing hands. It was down 8 5/16 to 134 9/16.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 26 million shares changing hands. It was down 2 7/16 to 78 13/16.

2:02 p.m.: Cyclicals Power Dow Deep Into Record Territory

Cyclicals were shining this afternoon and providing the fuel for the

Dow Jones Industrial Average

to soar into record territory, while Internet stocks were taking a beating.

Powering the Dow this afternoon was

3M

(MMM) - Get Report

, which was up 4 5/8 to 43 5/8, accounting for 22 points of the Dow's advance.

The Dow was up 149 to 10,938, far above its closing record level of 10,878.38.

For the venerable blue-chip gauge, it took some economic data this morning for it to shake off some early weakness.

Stocks opened on the soft side today, but reversed course after the release of the

National Association of Purchasing Management's Purchasing Managers' Index

at 10 a.m. EDT. The index slipped to 52.8 in April from 54.3 in March. The slip in the index helped ease market participants' fears that the economy may be getting too hot and that the

Federal Reserve

might have to raise interest rates to cool it off down the road.

On Friday, strong economic data sparked fears of inflation. The

Commerce Department

reported that

gross domestic product

advanced at a 4.5% annual rate in the first quarter, well above economists' forecasts of 3.3% growth. The

National Association of Purchasing Management-Chicago

said its index rose to 63.3 in April from 57.0 in March.

The 30-year Treasury bond was down 2/32 to 94 2/32, yielding 5.67%.

The

Nasdaq Composite Index

was down 15 to 2528. The biggest losing stocks on the

Nasdaq Stock Market

today are Internet stocks, led on the downside by

Amazon.com

(AMZN) - Get Report

. Amazon.com was down 18 5/8, or 11%, to 153 1/2.

TheStreet.com Internet Sector

index was down 18 to 638.

The

S&P 500

was up 7 to 1342. The

Russell 2000

was up 1 to 434.

The

Morgan Stanley Cyclical Index

was up 2%.

Basic materials and energy stocks rallied. The

Morgan Stanley Commodity Related Equity Index

was up 2%, the

Chicago Board Options Exchange Oil Index

was up 2%, while the

Philadelphia Stock Exchange Oil Service Index

was up 4%.

On the

New York Stock Exchange

, advancers were beating decliners 1,862 to 1,028 on 512 million shares. On the Nasdaq, winners were beating losers 1,965 to 1,819 on 567 million shares.

On the NYSE, 53 issues had set new 52-week highs while 17 had touched new lows. On the Nasdaq, 67 issues had set new highs while new lows totaled 29.

On the Big Board,

America Online

(AOL)

was most active, with 16 million shares changing hands. It was down 7 5/16 to 135 7/16.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 21 million shares changing hands. It was down 1 15/16 to 79 5/16.

Sector Focus: Natural Gas

Natural gas stocks were higher this afternoon, adding on to the outsized gains they've enjoyed over the last couple of months.

The

American Stock Exchange Natural Gas Index

was up 1%, led by

Apache

(APA) - Get Report

, which has surged 1 13/16, or 6%, to 146.27.

From the close on March 1 to this afternoon, the index is up nearly 45%.

Apache's surge today came compliments of

Merrill Lynch

, which upgraded the stock to near-term buy from near-term accumulate. On Feb. 1, it closed at 18 1/8.

Enron

(ENE)

, which is a component of the index, was up 3/4 to 76. Earlier, it hit a 52-week intraday high, peaking at 76 3/8.

1:10 p.m.: Midday Musings: Dow Cruises Higher but Techs Still Can't Get Going

11:59 a.m.: Stocks Mostly Higher as Dow Jumps

Stocks were higher late this morning, led by the

Dow Jones Industrial Average

, while Internet stocks slumped.

The Dow was up 94 to 10,883, with

Chevron

(CHV)

and

DuPont

(DD) - Get Report

powering the venerable blue-chip average.

After opening lower, both stocks and bonds reversed course after the

National Association of Purchasing Management

said its

Purchasing Managers' Index

slipped to 52.8 in April from 54.3 in March. The drop in the index soothed fears in the wake of recent economic data that the economy was getting too hot and that the

Federal Reserve

would have to intervene and raise interest rates to cool things off.

However, the long bond has fallen back into negative territory, down 3/32 to 94 2/32, yielding 5.67%.

On Friday, two economic reports showed the economy was barreling along at a steamy clip. The

Commerce Department

reported that

gross domestic product

advanced at a 4.5% annual rate in the first quarter, well above economists' forecasts of 3.3% growth. The

National Association of Purchasing Management-Chicago

said its index jumped to 63.3 in April from 57.0 in March.

The

S&P 500

was up 7 to 1342. The technology chunky

Nasdaq Composite Index

was down 3 to 2540. The

Russell 2000

was up 1 to 434.

TheStreet.com Internet Sector

index was down 15 to 642.

Basic materials and energy stocks were rallying. The

Morgan Stanley Commodity Related Equity Index

was up 1%, the

Chicago Board Options Exchange Oil Index

was up 2%, while the

Philadelphia Stock Exchange Oil Service Index

was up 3%.

The

Philadelphia Stock Exchange Forest & Paper Products Index

was up 2%.

On the

New York Stock Exchange

, advancers were beating decliners 1,752 to 966 on 333 million shares. On the

Nasdaq Stock Market

, winners were beating losers 1,907 to 1,527 on 372 million shares.

On the NYSE, 40 issues had set new 52-week highs while 12 had touched new lows. On the Nasdaq, 58 issues had set new highs while new lows totaled 18.

On the Big Board,

America Online

(AOL)

was most active, with 9 million shares changing hands. It was down 5 13/16 to 136 15/16.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 11 million shares changing hands. It was down 1 1/16 to 80 3/16.

Tech Focus

Tech sector barometers were mixed. The

Nasdaq 100

was up fractionally, while the

Morgan Stanley High-Tech 35

was down 1%. The

Philadelphia Stock Exchange Semiconductor Index

was up 1%. The

Philadelphia Stock Exchange Computer Box Maker Index

was also up 1%.

News that

Philips Electronics

(PHG) - Get Report

reached a friendly pact to buy chipmaker

VLSI Technology

(VLSI)

sent both VLSI's and Philips' stocks higher. VLSI was up 1 15/16, or 10.3%, to 20 13/16, while Philips advanced 3 3/8 to 88 1/2.

The deal brings to an end Philips' nearly two-month hostile takeover attempt. Philips said it will pay $21 a share for VLSI, a chunky premium above its hostile bid that valued the chipmaker at $17 a share, or $777 million.

Market participants don't seem to think too much of

RealNetworks'

(RNWK) - Get Report

release of its new software

RealJukebox

, which allows consumers to record CD collections to PC hard drives and find and download music from the Internet.

TheStreet.com

wrote about the software in a

story this morning. RealNetworks was down 9 3/8 to 212 1/8.

In other news,

RSL Communications

(RSLC)

is planning an IPO of its wholly owned Internet telephony subsidiary,

Delta Three

. The offering is expected to take place during the third quarter. RSL was down 1 1/2 to 31 5/8.

Some

Datek Online

customers were blocked from entering orders or checking their portfolios early Monday due to a configuration problem that caused a slowdown in processing the 57,000 orders that had piled up over the weekend, Datek marketing director Robert Bethge said. Customers were unable to place orders during and immediately follow the opening, he said, and until 11 a.m. EDT the system continued to reject some orders.

Bethge said that trading and the portfolios have been up and running since then.

11:17 a.m.: NAPM Report Pushes Stocks Off Session Lows

Soothing economic news helped drive the 30-year Treasury bond off its session lows and lift most major market barometers into positive territory.

The

National Association of Purchasing Management

said its

Purchasing Managers' Index

slipped to 52.8 in April from 54.3 in March. The long bond erased its early loss, up 5/32 to 94 9/32, yielding 5.65%. On Friday, two economic reports, which showed vigorous economic growth, sparked fears of an overheating economy and worries that the

Federal Reserve

might have to raise interest rates to cool it down.

The

Dow Jones Industrial Average

was up 61 to 10,850. The

S&P 500

was up 3 to 1338.

The

Nasdaq Composite Index

was down 5 to 2538. The

Russell 2000

was up 2 to 435.

TheStreet.com Internet Sector

index was up 11 to 645.

Meanwhile, in the news,

MediaOne Group's

(UMG)

board has accepted

AT&T's

(T) - Get Report

$85 cash-and-stock offer for the company, which the board said was a "superior proposal" to the previous merger deal MediaOne reached with

Comcast

(CMCSA) - Get Report

. Under terms of the Comcast deal, Comcast has until Thursday to respond to the AT&T proposal.

AT&T and Comcast rose, while MediaOne slipped.

On the

New York Stock Exchange

, advancers were beating decliners 1,565 to 958 on 215 million shares. On the Nasdaq, winners were beating losers 1,749 to 1,421 on 255 million shares.

On the NYSE, 26 issues had set new 52-week highs while 11 had touched new lows. On the Nasdaq, 48 issues had set new highs while new lows totaled 16.

Meanwhile, one of the contributors to the market's recent surge has been attributed to strong first-quarter earnings. Some market analysts lately have wondered where the market might get its inspiration for more upside, now that the earnings season is drawing to a close.

A handful of earnings reports were released this morning.

Arco

(ARC) - Get Report

posted first-quarter operating earnings of 53 cents a share, vastly outstripping the First Call 21-analyst estimate of 29 cents, but down from the year-ago 65 cents.

theglobe.com

(TGLO)

reported a first-quarter pro forma loss of 47 cents a share, narrower than the First Call two-analyst estimate of a loss of 55 cents. Its stock jumped on the news, up 6 3/4, or 11%, to 67 3/8.

On the Big Board,

America Online

(AOL)

was most active, with 6 million shares changing hands. It was down 5 3/4 to 137.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 8 million shares changing hands. It was down 1 1/16, or 1%, to 80 1/4.

9:58 a.m.: Stocks Open Mostly Lower

Stocks were mostly lower in the early going while the 30-year Treasury bond was tumbling again after falling precipitously on

Friday.

The

Dow Jones Industrial Average

was up 2 to 10,791. The

S&P 500

was down 4 to 1331. The

Nasdaq Composite Index

was down 17 to 2526. The

Russell 2000

was down fractionally at 433.

TheStreet.com Internet Sector

index was down 11 to 646.

The 30-year Treasury bond was down 15/32 to 93 21/32, yielding 5.70%.

Most Up at Open -- NYSE

Consolidated Stores (CNS) - Get Report, up 1 15/16 to 36 5/16

.

Most Up at Open -- Nasdaq

Qualcomm (QCOM) - Get Report, up 8 3/8 to 208 3/8

.

Most Down at Open -- NYSE

Bristol-Myers Squibb (BMY) - Get Report, down 1 15/16 to 61 5/8

.

Most Down at Open -- Nasdaq

Western Wireless (WWCA) , down 15 11/16 to 25 3/8

.