Dow Remains in Negative Territory While Nasdaq Rises on Tech Gains

The Treasury market is down modestly after the 10-year note auction.
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The

Dow Jones Industrial Average

is continuing to struggle as the afternoon matures, following its morning plunge on the news that

Treasury

Secretary

Robert Rubin

will step down on July 4. And the broader market has lately gone slightly negative. But paced by technology shares, the

Nasdaq Stock Market

is still solidly in the black.

The Dow was lately down 56, after suffering a dizzying 213-point drop in the first hour. Weighing most heavily on the blue-chip index was

Du Pont

(DD) - Get Report

, lately down 2 13/16 at 71 1/4, subtracting 13 points from the Dow.

But the

Nasdaq Composite Index

was lately up 20, led by names including

Portal Software

(PRSF)

, which

Cisco

(CSCO) - Get Report

this morning said it bought 3 million shares of. Cisco, the most active issue on the Nasdaq, was lately up 4 15/16 at 116 13/16 after reporting better-than-expected third-quarter earnings

last night.

Other tech indices were also solidly higher. The large-cap

Nasdaq 100 Index

was lately up 20, or 1%, and the

Morgan Stanley High-Tech 35

was up 13, or 1%.

Internet names have turned lower, however. With bellwethers

AOL

(AOL)

, the most active issue on the NYSE, lately down 3 7/16 at 138 and

Yahoo!

(YHOO)

down 4 15/16 at 169,

TheStreet.com Internet Sector Index

was lately down 4.

The small-cap

Russell 2000

was lately up fractionally.

Representing the broader market, the

S&P 500

was lately down fractionally.

The bond market may deter any recovery by the Dow today. In the wake of the Treasury's 10-year note auction, which concludes the quarterly refunding, the benchmark 30-year bond was down 3/32 at 91 24/32, lifting its yield to 5.84%. The auction was poorly received, producing a bid-to-cover ratio of 1.62. It's normal for the Treasury to receive bids for at least twice the amount of notes or bonds it's offering.

Market breadth is negative on the

New York Stock Exchange

but positive on the Nasdaq. On the NYSE, 1,719 decliners were beating 1,177 advancers on volumne of 547 million shares. There were 52 new highs and 17 new lows. On the Nasdaq, advancers outnumbered decliners 1,914 to 1,846 on volume of 662 million, with 99 new highs and 21 new lows.

1:09 p.m.: Midday Musings: Market Mainly Shrugs Off Its Rubin Concernst

12:03 p.m.: Tech Sector Rally Puts Damper on Rubin Selloff

So much for the Rubin selloff.

The

Dow Jones Industrial Average

remained under pressure from the surprise announcement of

Treasury

Secretary

Robert Rubin's

resignation, but the tech sector was trading solidly higher.

The

Nasdaq Composite Index

was up 26 to 2592 and the large-cap

Nasdaq 100

was up 26 to 2202, with

Cisco

(CSCO) - Get Report

captaining the advance. The company, which late yesterday reported strong third-quarter earnings and revenue, was up 5 5/17 to 117 1/8 on a Nasdaq-leading 16 million shares.

TheStreet.com Internet Sector

index was up a more modest 4 to 658, continuing to suffer from losses in

Yahoo!

(YHOO)

,

America Online

(AOL)

and

Amazon.com

(AMZN) - Get Report

.

The Dow remained off 49 to 10,977, but that's a far cry from the loss of 213.34 to 10,812.81 it sustained on the first reports of Rubin's pending departure. The

S&P 500

was up 1 to 1356, having recovered from a low of 1332.95. The

Russell 2000

kept up its recent sterling performance with a gain of 1 to 448.

"I think that it really underscores the actual resiliency of this market," said Paul Rich, a trader at

BT Brokerage

. "It's really an amazing thing. It's just strong, you know?"

The benchmark 30-year Treasury bond was showing that resiliency as well, off its best levels of the day but up 5/32 to 91 31/32. The yield stood at 5.82%.

Equity market internals were mixed.

New York Stock Exchange

decliners were leading advancers 1,630 to 1,130 on 379 million shares. On the

Nasdaq Stock Market

, 1,746 advancers were ahead of 1,684 decliners on 434 million shares. New 52-week highs were outpacing new lows 46 to 14 on the Big Board and 74 to 13 on the Nasdaq.

AOL was the most active issue on the NYSE, down 2 5/8 to 138 13/16 on 12 million shares.

Tech Focus

Among tech-focused indices, the

Morgan Stanley High-Tech 35

was up 1%, the

Philadelphia Stock Exchange Semiconductor Index

was up 2% and the

Philadelphia Stock Exchange Box Maker Index

was up 2%.

The aforementioned Cisco was having a mixed -- at best -- effect on the rest of the networking sector.

Ascend

(ASND) - Get Report

was up 1 15/16 to 98 1/16

Newbridge Networks

(NN)

was up 1/8 to 31 15/16 and

3Com

(COMS)

was down 1/16 to 27 1/2 but

Nortel Networks

(NT)

was off 1/2 to 72 7/8 and

Fore Systems

(FORE)

was down 1/16 to 34.

--

John J. Edwards III

10:39 a.m.: Stocks Recover From Session Lows Hit on Rubin Resignation

Wall Street continued trying to assimilate and analyze the surprising news of

Treasury

Secretary

Robert Rubin's

resignation, with major indices recovering from their initial downdraft as traders seize a sudden buying opportunity.

The announcement that the popular Rubin will leave, to be replaced by Deputy Secretary

Lawrence Summers

, sent the

Dow Jones Industrial Average

plunging instantly around 9:45 a.m. EDT. It lost as much as 213.34 to 10,812.81 but lately was down 56 to 10,970. The

S&P 500

was down 4 to 1352, off its low of 1332.95.

The

Nasdaq Composite Index

was up 10 to 2576, after falling to a session low of 2548.24.

Cisco

(CSCO) - Get Report

, which late

yesterday reported strong earnings and revenue, was almost entirely unscathed by the selling and was continuing to provide the Comp's best support. The networker was up 5 7/8 to 117 11/16.

TheStreet.com Internet Sector

index was up 3 to 657 and the small-cap

Russell 2000

was off fractionally at 446.

The benchmark 30-year Treasury bond was up 5/32 to 91 31/32, its yield edging down to 5.82%.

"He's thrown up enough trial balloons, we knew he'd do this at some point," said one market analyst. "Now that

Clinton

is out of danger and world economies have come back, he can go be with his family now. Remember the

New York Times

article about the 'team that saved the world'? The article goes out of its way to talk about how incredibly smart Lawrence Summers is according to everybody from

Fed

Chairman

Alan Greenspan

down. This has been set up since before the crisis."

The source, who requested anonymity, said he'd be buying on any Rubin-resignation-inspired downturn.

"I don't think it changes things a whole helluva lot," he said. "But Rubin is a smart guy and he's been extremely successful at using the system to his ends. It remains to be seen if Summers is as smart as everybody says he is. The world is in somewhat a stronger place than nine months ago, but we're not out of the woods yet. Let's see what happens."

Market internals were weak, especially on the

New York Stock Exchange

. NYSE decliners were leading advancers 1,575 to 912 on 215 million shares. On the

Nasdaq Composite Index

, 1,546 decliners were ahead of 1,489 advancers on 239 million shares. New 52-week highs were outpacing new lows 33 to 8 on the Big Board and 50 to 8 on the Nasdaq.

Rubin reportedly will leave his post in early July. The White House has confirmed the resignation; an official announcement is expected this afternoon.

--

John J. Edwards III

Senior Writer Aaron L. Task contributed to this update

.