Indices Pause for Breath While Volume Gallops Breathlessly

There was no record for the Nasdaq Comp, but the DOT set a new standard and Nasdaq volume did the same.
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SAN FRANCISCO -- In the days before the

Federal Open Market Committee

meeting, the common thinking was that almost any decision would be a "win-win" for stocks. Indeed, those long were able to secure a definitive "win" (with flavor)

yesterday after the Fed's rate hike, overcoming a downturn by bonds.

But a repeat "victory" was not in the offing today. Bonds continued to fade amid renewed signs inflationary forces may not be dead, dragging stocks modestly lower in the process.

TheStreet.com Internet Sector

index sidestepped the selling, however, rising 4.80, or 0.5%, to an all-time high of 902.37, largely behind strength in

CMGI

(CMGI)

. The Internet incubator rose 21.1% after

Prudential Securities

reiterated its strong buy recommendation and upped its price target to 186.

TheStreet.com

Red Hots index fell 9.8 to 305.60. The 20-stock index tracks action in particularly volatile stocks and is meant to measure so-called hot money.

The price of the 30-year Treasury bond fell 23/32 to 99 29/32, its yield rising to 6.13%. The

Consumer Price Index

report for October was in line with expectations and thus not believed to be responsible for the fixed-income market's setback. The culprit was an old nemesis of inflation-averse bond traders -- oil, which rose 3.4% to $26.58, its first climb above $26 since January 1997. The

American Petroleum Institute's

report late yesterday showing declining inventories was cited as the catalyst for today's move.

The market: Join the discussion on

TSC

Message Boards.

In reaction, the

American Stock Exchange Oil & Gas Index

rose 1.8% while the

Philadelphia Stock Exchange Oil Service Index

jumped 4.4%. But while energy stocks rallied, most other groups seized on the bond market's retreat as an excuse to take a respite from recent gains.

Not surprisingly, the

Dow Jones Transportation Average

fell hardest on the spike in crude prices, down 95.54, or 3.1%, to 3004.13.

"I don't think it's really a big deal on the inflation front," but oil's rise "doesn't help," said Jim Benning, a trader at

BT Brokerage

, noting the market was due for a setback after its "real strong run in the last week or so."

Benning described the Fed's decision to raise rates yesterday as "the most bullish scenario anyone could have expected," evoking the kind of optimism that has become widespread on Wall Street. "The market is going to do well through the end of the year," he forecast. "We're just taking a little break here."

Among blue-chip averages, the

Dow Jones Industrial Average

fell 49.24, or 0.5%, to 10,883.09 while the

S&P 500

dipped 9.36, or 0.7%, to 1410.71 after trading as high as 1423.55, a new intraday high for the index.

Offsetting the rising oil names were losses for financials such as

American Express

(AXP) - Get Report

and

J.P. Morgan

(JP) - Get Report

; the

Philadelphia Stock Exchange/KBW Bank Index

fell 2.8%.

The

Nasdaq Composite Index

, which has been producing outsized gains of late, led major indices lower on this day. The tech-imbued index slid 26.13, or 0.8%, to 3269.39 as the majority of bellwether tech names declined; the

Nasdaq 100

shed 1% while the

Philadelphia Stock Exchange Semiconductor Index

declined 1.9%.

Recent favorites rescinded some gains, including

Qualcomm

(QCOM) - Get Report

, down 5.6% after announcing it may pursue acquisitions to expand its product mix.

Oracle

(ORCL) - Get Report

was a notable exception to the downdraft, rising 10.2% after several brokerages issued positive comments. As

reported, Oracle executives were optimistic in a meeting with analysts yesterday.

Also,

Applied Materials

(AMAT) - Get Report

rose 4.3% thanks to positive comments from

Lehman Brothers

. After the close, the chip-equipment giant posted fourth-quarter profits of 77 cents a share vs. the 29-analyst consensus of 64 cents.

Notable Net gainers included

priceline.com

(PCLN)

, up 12% on news the operating units of

UAL

(UAL) - Get Report

,

AMR

(AMR)

, and

US Airways

(U)

will each offer seats on priceline.com's site. Elsewhere, Net IPOs had another stellar session as

Terra Networks

(TRRA:Nasdaq) gained 183% and

iManage

(IMAN:Nasdaq) rose 124% from their respective offering prices.

Manageable, Warranted and Not a Problem

"Psychology equals momentum on the Nasdaq and it gets absurd once in a while and becomes problematic short-term -- that's what's happened," said Barry Hyman, chief market strategist at

Ehrenkrantz King Nussbaum

. "Any correction is certainly manageable and will be contained to 3% to 5%. I don't look at it as a problem."

Hyman's blase view of today's setback is due first to a belief that "tech leads the way in terms of growth," and will continue to do so. Second, the Nasdaq's recent string of new highs came without much assistance (if any) from three "top-weighted" stocks,

Microsoft

(MSFT) - Get Report

,

Dell

(DELL) - Get Report

and

Intel

(INTC) - Get Report

, which all fell today by at least 2.5%.

"Take that into consideration the only answer is the market is much broader than in previous rallies," the strategist said. "That bodes well. Certainly, parts of technology moves beyond reasonable levels and

today's setback is certainly warranted."

Also reflecting that broadening, the

Russell 2000

outperformed blue-chip averages, eking out a gain of 0.19 to 457.07.

In

New York Stock Exchange

trading, 960.1 million shares were exchanged while declining stocks led advancers 1,855 to 1,205. In

Nasdaq Stock Market

action, 1.634 billion shares traded -- yet another all-time high -- while losers led 2,141 to 1,911. New 52-week lows outpaced new highs 131 to 100 on the Big Board while new highs led 238 to 81 in over-the-counter trading.

Among other indices, the

Dow Jones Utility Average

slid 1.73, or 0.6%, to 296.24 and the

American Stock Exchange Composite Index

shed 3.61, or 0.4%, to 823.40.

Elsewhere in North American equities, the

Toronto Stock Exchange 300

gained 11.57 to 7591.30 and the

Mexican Stock Exchange IPC Index

added 1.76 to 6103.62.

Wednesday's Company Report

By Tara Murphy

and

Eileen Kinsella
Staff Reporters

Though most of the net sector ended the day on a down note, CMGI was a big winner, jumping 21 3/4, or 21.1%, to 124 5/8, heaving TheStreet.com Internet Sector index into positive territory despite a slump in other net heavyweights. Prudential Securities upped its price target on CMGI to 186 and reiterated a strong buy rating.

(

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.

)

Mergers, acquisitions and joint ventures

BB&T

(BBT) - Get Report

fell 1 1/8 to 35 9/16 after saying it is buying

Hardwick Holding

in a stock swap valued at $138.7 million.

Dime Bancorp

(DME)

rose 5/16 to 18 9/16 after saying its stockholders would get a larger share in a new mid-Atlantic regional bank that would be created under its planned $3.6 billion merger with

Hudson United Bancorp

(HU)

. Shares of Hudson United rose 1/2 to 32 9/16. The banks said the change was necessary due to a 3% stock dividend that was set by Hudson yesterday. According to the new terms, Dime shareholders will now receive 0.60255 shares in Dime United Bancorp for each share held, up from the initial 0.585 shares.

Disney

(DIS) - Get Report

lost 3/16 to 25 15/16 after shareholders approved the company's spinoff of its Internet assets to form a separately traded company

Go.com

. Disney also said that

Infoseek

(SEEK)

shareholders, who voted at a different meeting, favored Disney's planned purchase of the company, giving the green light to form Go.com. In July, Disney and Infoseek forged a deal regarding Disney's purchase of the remaining 58% interest in Infoseek that it did not already own. Infoseek gained 3 1/16, or 8.8%, to 37 7/8.

Equifax

(EFX) - Get Report

slipped and

Lycos

(LCOS)

lost 1 15/16 to 56 after the companies launched a co-branded Web site that allows consumers to review their credit history and ratings. The

site lets consumers know if credit rating agencies have added new information to their files each quarter.

IBM

(IBM) - Get Report

fell 1 1/2 to 93 1/8 and

SBC Communications

(SBC)

added 15/16 to 51 5/8 after the companies forged a pact to offer DSL Internet Consumer Service.

ImageX.com

(IMGX)

climbed 13/16 to 17 5/8 after it agreed to acquire Internet auction sites

PrintBid.com

and

PaperDeals.com

for about $18.5 million in stock.

Network Solutions

(NSOL)

shot up 9 1/2, or 6.1%, to 145 9/16 after it forged a pact for

Yahoo!

(YHOO)

to advertise Network Solutions' services internationally.

Pegasus

(PEGS)

fell 13/16 to 46 3/4 after saying it is buying hotel-reservation technology designer

REZsolutions

in a deal valued at $250 million. The transaction calls for Pegasus to issue 2.66 million shares in common stock and pay $115 million in cash and a $20 million note payable to

Reed Elsevier

division

Utell International

.

priceline.com jumped 8 1/4, or 12%, to 76 7/8 after announcing it will sell tickets for the three major airlines it does not already serve, United Airlines, American Airlines and US Airways, and will take a one-time $1.1 billion charge related to the move. United is a unit of UAL which fell 1 5/8 to 66 3/16, while American is a unit of AMR which lost 2 7/16. US Airways fell 1 7/8, or 6.3%, to 28 1/16.

SatCon Technology

(SATC)

rose 1/2, or 6%, to 8 27/ 32 after it purchased

Northrop Grumman's

(NOC) - Get Report

power electronics products division, in a stock-warrant deal valued at $4.9 million. Northrop gained 1 7/8 to 55 3/8.

Bank of Scotland

talked to investment banks about how it can raise an extra $4.1 billion so it can increase its hostile takeover bid for

National Westminster Bank

to 15 pounds a share.

Southern Cal Edison

(EIX) - Get Report

lost 1/4 to 27 11/16 after it started auctioning a 56% stake in its Mohave power plant.

Ticketmaster Online-CitySearch

(TMCS)

tacked on 5 5/8, or 19.2%, to 35 1/8 after saying it has taken a "significant minority stake" in

ActiveUSA.com

, an online sports ticketing company.

Volt Information Sciences

(VOL)

added 13/16 to 23 5/8 and

Lucent Technologies

(LU)

lost 3/4 to 76 3/4 after saying jointly that Volt would acquire two divisions from Lucent, for an undisclosed amount of cash. According to the deal's terms, Volt will buy the

Technologies Technical Services

and

Technologies Services

divisions from Lucent.

Vodafone AirTouch

(VOD) - Get Report

was unchanged at 44 after

The Wall Street Journal

reported it would increase its bid for Germany's

Mannesmann

(MNNSY)

in what could be the biggest takeover ever. The newspaper, citing people familiar with the situation, reported that Vodafone is pondering a bid valued at between 220 euros and 230 euros a share, which would value Mannesmann at as much as 116.7 billion euros, or $120.59 billion. Earlier this week, Vodafone offered to buy Mannesmann; however, Mannesmann said no thanks.

Earnings/revenue reports and previews

Commerce One

(CMRC)

dropped 12 1/8 to 310 after it kicked off the

U.S. Bancorp Piper Jaffray

Internet Conference with a word of caution.

"We expect a modest increase in revenues in the fourth quarter (from the third quarter)," Peter Pervere, the company CFO, told a packed group of investors this morning. "We are a relatively young company. We have a significant pipeline right now, but we want to set expectations conservatively."

By comparison, sequential revenue from the second quarter to the third quarter ended Sept. 30 grew 147% to $10.4 million. Commerce One is a provider of business-to-business software and services.

--

Suzanne Galante

Brookstone

(BKST)

gained 1/8 to 16 7/8 after it posted a third-quarter loss of 55 cents a share, narrower than the three-analyst estimate of a 57-cent loss and the year-ago 56-cent loss.

CBRL Group

(CBRL) - Get Report

fell 5/8 to 12 7/8 after it posted first-quarter earnings of 25 cents a share, in line with the 12-analyst estimate but down from the year-ago 42 cents.

Consolidated Stores

(CNS) - Get Report

gained 1/8 to 20 1/4 after it posted a third-quarter loss of 14 cents a share, narrower than the 14-analyst estimate of a 17-cent loss and the year-ago 15-cent loss.

Dillard's

(DDS) - Get Report

climbed 9/16 to 19 5/16 after it posted third-quarter earnings of 33 cents a share, missing the 13-analyst estimate of 38 cents, but up from the year-ago 47-cent loss.

Ericsson

(ERICY)

lost 5/16 to 47 after President Kurt Hellstrom warned that problems in increasing handset output made it difficult for the company to meet its forecasted operating margins for 1999. According to

Reuters

, Hellstrom said during a briefing in London that the output is probably in the low end of its projected range but "within what we consider normal."

Goody's Family Clothing

(GDYS)

was unchanged at 6 25/32 after it reported third-quarter earnings of 5 cents a share, in line with the four-analyst estimate but down from the year-ago 10 cents.

Talbots

(TLB)

lost 1 3/16 to 46 9/16 after it posted third-quarter earnings of 63 cents a share, beating the 13-analyst estimate by a penny and the year-ago 40 cents.

TheStreet.com/nytimes.com

joint newsroom wrote about Talbots in a separate

story.

Offerings and stock actions

Gemstar

(GMST)

fell 3 1/16 to 102 7/8 after it said it set a 2-for-1 stock split.

Hewlett-Packard's

(HWP)

planned spinoff of

Aglient Technologies

is now set for 65 million shares, up from the initial IPO figure of 57 million. The offering's expected price range has been adjusted to $26 to $28 from $19 to $22.

Morgan Stanley Dean Witter

is serving as the deal's lead underwriter. Shares of H-P popped 1 5/16 to 77 7/16.

Robertson Stephens priced a 3.6 million-share IPO for

iManage

(IMAN)

above its expected price range at $11. Shares of iManage leaped 13 5/8, or 123.8%, to 24 5/8.

Phone.com

(PHCM)

plummeted 8 1/4, or 5.7%, to 135 1/16 after it announced that it is selling 6.6 million shares at a price of $135 per share in a public offering.

Rainmaker Systems

(RMKR)

rose 10 1/2 , or 131.2%, to 18 1/2 on the first day of trading.

Suiza Foods

(SZA)

added 5/16 to 36 5/8 after it said it has added $100 million to its existing share buyback program.

Goldman Sachs

priced

Terra Networks'

(TRRA)

22.3 million-share IPO above-range at $13.41 a share. Shares of Terra jumped 24, or 182.5%, to 38 1/4.

Virata

(VRTA)

popped 12 1/2 , or 89.3%, to 26 9/16 after being priced at $14 a share by

Credit Suisse First Boston

.

Analysts actions

Donaldson Lufkin & Jenrette

upped its rating on

Anheuser-Busch

(BUD) - Get Report

to buy from market perform. Shares of Anheuser-Busch hopped 2 13/16 to 75 1/16.

Lehman Brothers upped its price target on

Applied Materials

(AMAT) - Get Report

to 125 from 100. Shares of Applied Materials leaped 4 1/2 to 110.

Credit Suisse First Boston

analyst Mark Wolfenberger resumed coverage of

AppNet

(APNT)

with a strong buy rating and a 12-month target price of 75. AppNet lost 5/8 to 50 5/8.

Lehman Brothers

raised its price target on

BEA Systems

(BEAS)

to 110 from 75. Shares of BEA bounced 9 1/4, or 12.75, to 81 3/4.

Merrill Lynch

raised its intermediate rating on

Fuji Photo

(FUJIY)

to an accumulate from neutral and its long-term rating to buy from accumulate. Shares of Fuji gained 1 1/2 to 40 5/8.

Credit Suisse First Boston raised its fiscal 2000 estimates on

Home Depot

(HD) - Get Report

to $1.48 from $1.45 a share and its fiscal 2001 estimates to $1.85 from $1.80 a share and upped its price target to 100 from 75. Home Depot shares declined 7/16 to 79 15/16.

Deutsche Banc Alex. Brown

initiated coverage of

Inhale

(INHL)

with a strong buy rating and a price target of 47. Shares of Inhale climbed 1/8 to 31 3/8.

Merrill upped its rating on

Lyondell Chemical

(LYO)

to near-term accumulate from neutral. Lyondell Chemical edged up 3/8 to 15 5/8.

DLJ raised its rating on

Oracle

(ORCL) - Get Report

to buy from market perform, while

Merrill Lynch

upped its price target to 80. Lehman Brothers raised the stock's price target to 82 from 53 and J.P. Morgan upgraded the stock to buy from market performer. Oracle shares advanced 6 9/16, or 10.1%, to 71.

PaineWebber

sliced its fourth-quarter estimates on

Pacific Gateway

(PGEX)

to 5 cents from 21 cents a share. Pacific Gateway added 15/16, or 5.5%, to 17 15/16.

Robertson Stephens

started coverage of

NaviSite

(NAVI) - Get Report

with a buy rating. Shares of NaviSite slid 3 3/4, or 6.5%, to 52 3/4.

PaineWebber raised its fiscal 2000 estimate on

Network Appliance

(NTAP) - Get Report

to 79 cents a share from 74 cents and its fiscal 2001 estimate to $1.10 from $1.05 a share. Shares of Network Appliance shares shot up 20 7/16, or 19.7%, to 124.

First Boston analyst Harry DeMott III, reinstated coverage of

Radio One

(ROIA)

with a buy rating and a 12-month target price of 77. Radio One shares were unchanged at 64 7/8.

Deutsche Banc Alex. Brown

rolled out coverage of

Sepracor

(SEPR)

with a buy rating and a price target of 114. Shares of Sepracor jumped 7 3/8, or 8.1%, to 97.

Wachovia Securities

upped its rating on

Tropical Sportswear

(TSIC)

to strong buy from neutral. Tropical Sportswear added 2 1/8, or 11%, to 21 1/2.

Banc of America

upgraded

Whole Foods

(WFMI)

to strong buy from buy. Shares of Whole Foods bounced 4, or 12.1%, to 37 1/16.

Miscellany

British Telecommunications

(BTY)

slipped 12 1/2, or 5.5%, to 197 1/2 after it announced that it has selected

N2H2

(NTWO)

as its preferred Internet filtering provider. Shares of N2H2 climbed 4 3/16, or 37.8%, to 15 1/4.

Ford

(F) - Get Report

and

DaimlerChrysler

(DCX)

are ratcheting up consumer rebates on some of their most profitable light trucks, the

Journal

reported. Shares of Ford fell 2 to 52 5/8, while DaimlerChrysler declined 1/16 to 73 1/16.

Kennametal

(KMT) - Get Report

said it has hired

Goldman Sachs

to explore "strategic alternatives" regarding its

JLK Direct Distribution

unit, including selling it. Also, the company said it will incur special charges of about $25 million to $30 million in the quarter ended Dec. 31. The company plans to close, consolidate or downsize several warehouses, offices and plants and cut 400 to 500 jobs. Kennametal skidded 5/8 to 28 9/16.

Kimberly-Clark

(KMB) - Get Report

said Thomas J. Falk has been named president and chief operating officer and will join the company's board of directors. Shares of Kimberly Clark hopped 1 to 68 1/16

Stewart Enterprises

(STEI)

said that it has tapped President and COO William Rowe to become its new CEO after vice chairman and CEO Joseph Henican III resigned. Shares of Stewart added 1/4, or 5.2%, to 5.

Zygo

(ZIGO)

lost 1/2 to 17 1/4 after it said it selected J. Bruce Robinson to replace Gary Willis as CEO.