Mr. Biggs

, if only the great

Stanley Kubrick

were still around to explain the closing scene of this week's trading for us

befuddled folks. What happened, he would no doubt explain, is that the stock market stopped worrying about the bomb and caught its breath.

But then again, what would a film director -- a deceased one, no less -- know about the stock market, you might ask. Maybe the market -- riding news that


forces shot down two Serbian MiGs into an only slightly negative close -- never cared about Kosovo in the first place. That's certainly what most strategists and traders are arguing.

Whichever the case may be, this seems to be increasingly clear: The correlation between the latest war details and the behavior of the major indices is weak. What did seem to matter this week were any inkling of an indication about inflation, that the quarter is ending and that another earnings season is approaching. And what did seem to matter most today was this: It's Friday, dab nabbit.

"Traders and investors are exhausted after this week," said Ned Riley, chief investment officer at the

Private Bank of BankBoston

. "Today was the calm after the storm."

Riley said Barton Biggs, the

Morgan Stanley Dean Witter

strategist who this morning on TV expressed confusion at recent stock turbulence, isn't alone. Confused by the week's activity, Riley said, investors opted for doing nothing during today's session.

"Investors are extremely confused, especially about the second half of the year," Riley said. "There are two camps. There are those who think the short-term growth will sustain and we'll see interest rates go up. And then there are those of us who believe these seasonal manic behaviors will wear out and that clearly these one-time factors -- early refunds, '98 bonus successes, the lowest unemployment since the '60s -- will reverse in the second half. And that this torrid consumer spending subsides."

Riley, who expects a 50-to-60-basis-point cut in the fed funds rate by the end of the year, said

Tuesday's big fall was a mistake. Traders got more worried than they needed to after


agreed to make oil production cuts, he said. "If you're long the energy sector it was good news, but if you're bullish on the stock market and you have hopes for low interest rates, then it was not-so-good news." Tuesday's 2.2% decline in the Dow and 3.1% decline in the Nasdaq, he argued, had nothing to do with the then-breaking news out of Kosovo.


Dow Jones Industrial Average

marked its session low of 9747.31 this morning only to cling to the flat line from noon EST until the closing bell. The blue-chip measure ended the day down 14.15 at 9822.24.

Weighing the heaviest on the gilded 30 were


(AA) - Get Report


American Express

(AXP) - Get Report



(GT) - Get Report



(MRK) - Get Report


Procter & Gamble

(PG) - Get Report

. Positive standouts were




Union Carbide


. The


S&P 500

tumbled 7.19 to 1282.80.

The tech-dripping

Nasdaq Composite Index

also clocked in its intraday low before lunch but it never managed to break into positive territory. After dropping as low as 2414.01, the Comp closed down 15.6 at 2419.21. The index got no support from bellwethers


(INTC) - Get Report



(MSFT) - Get Report



(CSCO) - Get Report

. Elsewhere in tech, the

Nasdaq 100

slid 0.7%, the

Morgan Stanley High-Tech 35

shed 0.7% and the

Philadelphia Stock Exchange Semiconductor Index

skidded 1.6%.

The oddest of couples -- Internet stocks and the

Russell 2000

-- were lone (albeit dimly lit) bright spots. The small-cap Russell picked up 0.93 to 393.92, while

TheStreet.com Internet Sector

index grew 1.68 to 629.58.

TheStreet.com E-Commerce Index

lost 0.60 to 111.53.


(AMZN) - Get Report

, reaching as high as 147 3/4, fizzled down 11/16 to 139 1/16.


New York Stock Exchange

trading, 695.5 million shares were exchanged while decliners led 1,599 to 1,356. In

Nasdaq Stock Market

activity 834.9 million shares were exchanged while the downs just inched out the ups 1,982 to 1,907. New 52-week lows bested new highs 82 to 24 on the Big Board and by 106 to 48 in over-the-counter trading.

The price of the 30-year Treasury bond fell 4/32 to 95, yielding 5.60%. (For more on the fixed-income market, see today's late

Bond Focus.)

Crane Sees Lower Interest Rates Ahead

Charles Crane, chief market strategist at

Key Asset Management

, said he expects the bond market to lend stocks a helping hand in the second half of the year. "One possible scenario is that we'll have some Y2K anxiety and a flight to quality into bonds, which will push down interest rates and trigger enthusiasm for stocks," he said, adding he expects the Fed to cut short-term interest rates once before the end of the year. "We've gotten a whiff of that with gasoline prices heading higher. The forces of deflation around the world are pretty powerful."

Around 1 p.m. EST, the long-term-minded Crane said: "I don't care one bit where we end today. It doesn't make any difference whatsoever. Flip a coin. What I see today is a lot of green in tech, still. So there's a leadership group doing well today. And I see a lot of red in financials and communications. So there's a leader, communications, not doing well, and a laggard, financials, not doing well. And then you have energy, a laggard, doing well. So we have a hodge-podge market, which makes it especially tough to read much from these tea leaves."

The strategist noted that while brokerage stocks have performed well of late, their financial colleagues in banking and insurance have not and are primed to stand among those accepting the next torch of leadership. Today, the

American Stock Exchange Broker/Dealer Index

rose 0.5% while the

Philadelphia Stock Exchange/KBW Bank Index

shed 0.9%.

Throughout the next quarter, Crane expects a continued slowdown in the large-cap tech stocks that have seen "a spectacular run not only from the October lows but over the last couple years," such as


(CSCO) - Get Report




and PC names.

"Now this doesn't mean we need to consolidate 20%, 30%, 40%," he added. "It just means the growth in these stocks is slowing. You could still be terrifically well-positioned in these stocks. If you own them should you keep them? Sure. Do I want to buy these with new money? No. If I only want double-digit returns -- if I'm satisfied with that instead of triple-digit returns from these Internet stocks -- then I can stay in tech."

Communications, Health Names Look Good

Along with banking and insurance securities, Crane predicted new leadership in communications stocks -- including

MCI WorldCom




(AT) - Get Report



(CMCSA) - Get Report

-- along with health-care and biotech names.

"This week has told us that it's still a volatile environment, and there's a sweet side when we push toward

Dow 10,000 and higher, and there's a flip side when we all feel pretty rotten and head for the bunkers," said Crane, who sees the Dow trading slightly south of 9000 to slightly north of 10,000 until the end of the year. "This market requires care and caution but there are some opportunities, there are some cheap stocks in an expensive market. And I don't see a lot of panic and fear -- it's just not in this market. There's a fair amount of complacency out there.

"But I've found every time I get conservative, I get this thrown in my face: 'Yes, but the economy is in such good shape; yes, but there's so much cash in the market; yes, but isn't Asia doing great?' So there are great reasons to be excited about the prospects but with a jaundiced eye. As long as you don't get wrapped up in 'what's the market going to do the next few days, the next few weeks?' -- don't get too giddy at the highs or too depressed at the lows. In general, the world is OK. Stocks reflect that."

As for next week, Crane expects to see major indices advance (possibly taking the Dow to 10,000) until at least Wednesday, the last day of the first quarter, while recent "winners act better and recent losers act worse" due to position-squaring action from money managers.

Among other indices, the

Dow Jones Transportation Average

fell 25.70 to 3264.00; the

Dow Jones Utility Average

fell 4.62 to 299.77; and the

American Stock Exchange Composite Index

lifted 6.34 to 718.74.

For the week, the Dow industrials lost 81.31, or 0.8%; the S&P 500 shed 16.49, or 1.3%; the Nasdaq Comp slipped 2.13, or 0.1%; the Russell 2000 fell 2.66, or 0.67%; TheStreet.com Internet index shaved off 0.98, or 0.2%; TheStreet.com E-Commerce Index lowered 3.07, or 2.7%; the Dow transports lost 74.48, or 2.2%; the Dow utilities shed 4.17, or 1.3%; and the Amex Composite gained 6.87, or 1%.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

climbed 41.68, or 0.6%, to 6635.20 and the

Mexican Stock Exchange IPC Index

tumbled 92.62, or 1.9%, to 4736.58. For the week, the TSE 300 rose 36.40, or 0.6%; and the IPC declined 47.75, or 1%.

Friday's Company Report

By John J. Edwards III
Markets Editor



slid 1 21/32 to 67 11/16, off an earlier low of 65 15/16, after the

Food and Drug Administration

said 28 people have died after taking the company's diabetes drug


. The federal agency is considering tighter restrictions on the drug, made by the company's






extensively about Rezulin and related matters.

Mergers, acquisitions and joint ventures

General Cigar


added 1,or 10.5%, to 10 1/2 after agreeing to sell its mass-market cigar business to

Swedish Match


for $200 million in cash. Swedish Match moved up 1/8 to 33.

King World Productions


advanced 1 to 29 15/16 amid takeover speculation.


(CBS) - Get Report

, whose name has come up in the scuttlebutt, tacked on 3/16 to a multiyear high of 39 15/16.

Speaking of takeover chatter,

Nextel Communications


soared 4 7/16, or 13.3%, to a five-year high of 37 7/8 on just that.


said the talk featured MCI WorldCom, which slipped 1 1/8 to 89 7/8.



added 1/16 to 7 5/8 after

The Wall Street Journal

reported that the struggling Japanese carmaker and France's


are expected to announce tomorrow a deal in which Renault will pay $5.5 billion for about 35% of Nissan.

PC Quote


ramped up 1 5/16, or 15.1%, to a nearly three-year high of 10 after


late yesterday

reported that the company is said to be in discussions to form a joint venture with



Time Warner


, parent of


, dimmed 7/16 to 68 13/16.


(QCOM) - Get Report

remained, with apologies to

Dan Patrick


en fuego

today on yesterday's news of a deal with rival



. Qualcomm sizzled up 13 1/8, or 13.3%, to an all-time high of 111 9/16, while Ericsson rose 3/16 to 23 1/2. In an apparent spillover from the Qualcomm news,

Leap Wireless International


surged 3 1/8, or 30.3%, to an all-time high of 13 7/16. Even though Qualcomm entirely spun off Leap last year, some investors still perceive a link, according to

Dow Jones Newswires


Earnings/revenue reports and previews



roared up 11/16, or 26.8%, to 3 15/32 after backing the three-analyst first-quarter estimate of 6 cents a share. That would match the year-ago figure.



dropped 1 1/2, or 21.4%, to 5 1/2 after last night warning it sees second-half earnings falling below estimates due to weaker revenue. The three-analyst forecast called for third-quarter earnings of 12 cents a share, a repeat of the year-ago figure, and fourth-quarter earnings of 16 cents, vs. the year-ago 15 cents.



sledded 4, or 35.8%, to 7 3/16 after last night saying it sees a first-quarter loss of 10 cents to 20 cents a share. The six-analyst prediction called for earnings of 37 cents vs. the year-ago profit of 54 cents. The company blamed a revenue slowdown.

International Microcomputer Software


lost 13/16, or 7.4%, to 10 1/4 after last night warning of a wider-than-expected third-quarter loss, around 70 cents to 75 cents a share. The company cited continuing investments in its online operations. The two-analyst view called for a loss 11 cents vs. the year-ago profit of 18 cents.



gave up 3/8, or 13%, to 2 19/32 after last night saying it will record a $3.2 million charge in the third quarter, when it expects to report an operating loss. The charge is related to severance costs for a 13% cut in the company's workforce. The two-analyst forecast called for a quarter loss of 13 cents a share vs. the year-ago loss of 3 cents. Verilink also named Graham Pattison president and chief executive, succeeding Leigh Belden, who is retiring.

Analyst actions

Prudential Securities

got jiggy with the oil drilling sector, upgrading a slew of companies:

Raised to accumulate from hold were

Baker Hughes


, up 15/16 to 23 13/16;

Cooper Cameron


, up 2 3/16, or 6.9%, to 34;

Marine Drilling


, up 1 5/16, or 14.6%, to 10 5/16;

R&B Falcon

(FLC) - Get Report

, up 1 1/8, or 16.1%, to 8 1/8;



, up 9/16 to 13 1/16; and


(SLB) - Get Report

, up 1 1/4 to 59 1/2.

Raised to strong buy from accumulate were



, up 2 1/8, or 17.9%, to 14;


(HAL) - Get Report

, up 5/8 to 38 1/8; and



, up 1 1/4, or 9.8%, to 14.

Transocean Offshore

(RIG) - Get Report

, boosted to strong buy from hold, rose 2, or 7.4%, to 28 7/8.

Applied Analytical


tumbled 4 1/2, or 26.5%, to 12 5/8 after

Morgan Keegan

downgraded it to market perform from outperform.

Eagle USA Airfreight

(EUSA) - Get Report

rose 13/16 to 28 11/16 after

BT Alex. Brown

upgraded it to strong buy from buy.

Exodus Communications


declined 3 11/16 to 146 even as

Lehman Brothers

initiated coverage at outperform. The stock shot up yesterday on positive analyst actions.

Kansas City Southern Industries

(KSU) - Get Report

advanced 3 9/16, or 7.1%, to 53 11/16 after Morgan Stanley Dean Witter started coverage with a strong buy and a price target of 61 a share.



improved 9 3/16, or 9.7%, to 103 13/16 after Morgan Stanley Dean Witter upgraded the stock to strong buy from outperform.


(MCD) - Get Report

moved up 3/16 to 44 3/8 after

Merrill Lynch

raised its price target on the stock to 55 from 50.



pogoed 8 5/8, or 15.1%, to an all-time high of 65 1/2 after

Raymond James

initiated coverage at buy.



fell 1 to 37 11/16 despite an upgrade to strong buy from accumulate at

U.S. Bancorp Piper Jaffray

. The firm reportedly sees increasing potential for upside earnings surprises at Nordstrom, based on an analyst meeting.



surrendered 1 1/16, or 7.9%, to 12 3/8 after Prudential cut it to hold from accumulate.

Interim Services


, which yesterday agreed to acquire Norrell for $553 million in stock and cash, fell 1 3/4, or 10.9%, to 14 1/4.

Pharmacia & Upjohn


increased 2 5/16 to an all-time high of 61 13/16 and

Salomon Smith Barney

upgraded it to buy from outperform.


looked at the positive buzz on some new Pharmacia & Upjohn drugs in a

story today.

Sun Microsystems

(SUNW) - Get Report

dipped 1 3/4 to 116 1/2 after trading earlier at an all-time intraday high of 121 1/4. Merrill Lynch upped its price target for the stock to 140 from 120.



decreased 2 3/16 to 64 1/2 after Morgan Stanley Dean Witter lowered it on price to neutral from outperform.

Offerings and stock actions

Abington Bancorp


ran up 1 1/4, or 9.6%, to 14 3/8 after last night saying it will buy back up to 10% of its outstanding shares.



bounded 17 1/4, or 75%, to 40 1/4 in its first day of trading. Lead underwriter BT Alex. Brown last night priced the offering's 4.25 million shares at $23 each.

Deltek Systems


jumped 1 11/16, or 18.4%, to 11 after last night setting a 1 million-share repurchase plan.



powered up 6 1/2, or 19.6%, to a postoffering high of 39 7/8 after the company sold 1.6 million shares and an unidentified shareholder sold 400,000 shares at $33 apiece in a 2 million-share offering.


Comfort Systems USA

(FIX) - Get Report

hopped 1 3/4, or 13.2%, to 15 after

Business Week's

Inside Wall Street column said the company may be a takeover target.



rocketed 2 7/16, or 40.2%, to 8 19/32 after the column quoted Ryan Rauch of

CIBC Oppenheimer

saying the stock has a compelling valuation and that the company is a "prime acquisition target for companies looking to enhance their direct-to-consumer marketing efforts." Finally,



ascended 3 3/16, or 19.5%, to 19 9/16 after a bullish mention in the column.

Cort Business Services

(CBZ) - Get Report

, a rental furniture provider, climbed 6, or 35.8%, to 22 3/4 after agreeing to be acquired by members of its management and an investment firm in a deal valued at $453 million, including the assumption of debt. The buyout group will pay $24 in cash and $2.50 in liquidation value of new preferred stock for each share of Cort.



leapt 2 1/8, or 19.5%, to 13 1/8 after launching a new auction Web site.

Dow component Goodyear deflated 2 3/8 to 49 1/2 after announcing it will invest $57 million, or C$87 million, to expand the radial tire operations at its Canadian passenger tire plant in Valleyfield, Quebec. The company said the expansion will increase production capacity by about 40% and add about 400 new jobs.

Hutchinson Technology


slumped 2 11/16, or 11.7%, to 20 7/16 after last night saying it will temporarily cut 550 production jobs from its 8,500-person workforce. The company said it had been adding to its production crew, expecting significant order increases for delivery. But in the last week, the company said, customers significantly reduced their expected demand.



stumbled 2 1/16, or 5.1%, to 38 1/2 after an international arbitrator ordered the Internet service provider to pay $49 million in damages to privately held

Chatterjee Management

. The ruling is related to a failed joint venture between the two to develop the European Internet market.



gave up early strength to close down 6 9/16, or 5.6%, to 111 9/16, despite receiving FDA approval for a new version of its asthma drug



TeleBanc Financial


levitated 9 7/8, or 17%, to an all-time high of 68 9/16 on no apparent news. It traded at an intraday peak of 77.



gained 2 1/8, or 8.8%, to 26 3/16 in


-spiced trading after a fire shut down a



refinery. Chevron was down 1/8 to 86 13/16. Also improving on Chevron's bad news were


(VLO) - Get Report

, up 2, or 9.1%, to 24, and

Amerada Hess

(AHC) - Get Report

, up 1 1/16 to 49 1/16.

Valley Media


zoomed up 4 1/8, or 25.8%, to 20 1/8 after

J.P. Morgan

priced its 3.5 million-share IPO top range at $16 a share. The price range for the offering was raised to $15 to $16 from $12 to $14. Valley Media distributes music and video entertainment recordings.